Prohibiting insurance companies from paying brokers would diminish the quality of service to customers and potentially raise premiums as insurers were forced to take on many of the functions delegated to brokers, the Oireachtas Committee on Enterprise and Small Business has been told.

Dolmen Insurance said preventing insurers making payments to brokers, a possibility mooted by the committee, would not give the public a better deal.

"Many historic tasks undertaken by insurers are now delegated to the responsibility of the insurance brokers and paid for by the current levels of commissions...This is to bring the service as close to the customer as possible and maximise efficiencies," said Mr David Dillane, Dolmen managing director.

As a result there has been a "migration of skills" from insurance companies to brokers. This is good for consumers as they can now more easily avail of expertise, said Mr Dillane.

The level of commission paid to brokers by insurers does not erode their commitment to act in the best interest of customers, Mr Dillane told the committee.

"At no time is our company influenced by the commission levels paid by an insurer," he said.

Insurance premiums climbed drastically in recent years for one major reason - the rise of a "compensation culture" in the Republic, said Mr Dillane.

"Ireland had the highest level of claims with the highest award level in Europe, producing a loss making market," he said.

In a separate presentation, Mr Mike Murphy, founder of Mike Murphy Insurances, said the compensation awards in the proposed book of quantum of the Personal Injuries Assessment Board were too high, at two to three times the EU average.

The Construction Industry Federation earlier told the committee that the relationship between insurers and brokers - including bonuses and performance arrangements - must be made completely transparent.