Fine Gael has urged the Government to do all in its power to block the sale of the motor and liability division of Eagle Star to an existing player in the Irish financial services sector, warning market consolidation will inevitably result in higher prices for consumers.
Mr Phil Hogan, the party's enterprise spokesman, said lack of competition had given insurers free rein to "fleece" the public for years, a situation that the takeover of Eagle Star by an indigenous rival would only exacerbate.
He called on the Tánaiste, Ms Harney, to make it clear the Government opposes such a deal and to use her influence to ensure Eagle Star remains an independent player in the Irish market.
Fine Gael's intervention follows weekend speculation that Eagle Star's owner, Zurich Financial Services, is poised to offload the company, with AIB rumoured to be considering a bid.
Mr Hogan said: "The fact that there are so few \ companies... has been a major obstacle to competition. This new suggestion that yet another player may be leaving the market will be greeted with dismay by the Irish public."
For too long the Cabinet has been content to take a back seat on the issue of insurance reform, happy to let the Competition Authority to set the pace, Mr Hogan claimed. The Tánaiste was especially culpable, in her role as Minister for Enterprise, Trade and Employment, he insisted.
Mr Hogan added: "Mary Harney cannot simply claim that she has abdicated all responsibility for competition to the Competition Authority. As the Minister for Enterprise, Trade and Employment, Ms Harney has overall responsibility for competition in the economy and has a duty to Irish consumers and businesses to ensure that the marketplace is competitive and vibrant."
