The new financial regulator has pledged to improve the way insurers assess risk and to increase the number of visits to their offices to inspect their books.
Speaking at a seminar organised by Life Strategies yesterday, Mr Liam O'Reilly, chief executive of the Irish Financial Services Regulatory Authority (IFSRA), told members of the insurance industry that it would focus on improving the transparency of products for consumers.
"The public expects to understand the products they buy and what those products cost. Any other approach is indefensible," he said.
"We all need to be able to say that we have done everything practical to promote consumer understanding of the products being offered."
The IFSRA is responsible for regulating the insurance sector as well as supervising all financial institutions in the Republic.
Mr O'Reilly said it intended to work with the industry to see what improvements could be made concerning the relationship between insurance companies and brokers.
"Some of the practices that previously brought the industry into disrepute have disappeared. However, in the course of supervision of intermediaries, which the Central Bank took over in 2001, it has become clear that other less-transparent practices persist."
He said the IFSRA would like to work with the industry at the product-producer and intermediary levels to see how these problems could be addressed. It was particularly keen that the independence of brokers should not be compromised by inappropriate incentives.
Mr O'Reilly said he was anxious to ensure that the independence of the Insurance Ombudsman was retained, while providing a "one-stop shop" for consumers wishing to make a complaint.
The IFSRA also wants to review the rules and supervisory practices of the insurance sector at the International Financial Services Centre to ensure they continue to fulfil solvency and risk-management requirements.
With regard to its wider brief, the new regulatory authority said it needed to be happy that the boards and management had a clear grasp of the real financial position and risks facing their companies, and take responsibility for it.
It will also consult with the industry about a possible fee structure through which it would fund regulation. "Money spent on effective regulation is money well spent," Mr O'Reilly said.
