Anomalies in the tax treatment of insurance premiums and benefits, in the non-life as well as life sector, between EU member-states could hinder legislative reform of the insurance industry, the president of the European Parliament, Mr Pat Cox, said yesterday.

"I fully agree with tax competition in Europe myself as a European liberal but it could be useful to look at tax-based definitions for pension funds," said Mr Cox, speaking after the Irish Insurance Federation annual lunch.

"We have a brilliant pensions intermediaries market here. Ourselves, the Dutch and the British are way ahead of other continental Europeans who are progressively shifting to occupational pension schemes and the exploitable capacity for our asset base to grow is enormous. But the biggest fragmentation in that sector is different tax treatment and I'm not talking about the view, should we abandon our national preferences to do with tax in general, but we should be very sophisticated in sector specific terms, whether this monolithic approach is serving our national interests."

He said a significant market opportunity now existed for Irish companies in the pensions market. "We have a real understanding of funded occupational schemes of a sort that the Continent lacks."

Mr Cox urged Irish businesses and individuals to engage more fully with EU institutions."This is an open, democratic chain that is open and exploitable, but people have got to actually seize the opportunities," he said.

He said the new Government should give much higher priority to genuine involvement by the Houses of the Oireachtas in European affairs. The integration of the financial services markets in Europe was now among the top priorities on the European economic reform agenda, with the European Parliament aiming to have the necessary legislation fully implemented by 2005, said Mr Cox.

Research presented earlier this year by the European Financial Services Roundtable estimates that the completion of the single market in financial services would raise growth by at least an additional 0.5 per cent per year across Europe, equalling €43 billion per year, he added. At consumer level, householders in various countries could have saved between €800 and €2,500 per year through lower interest payments on a €100,000 mortgage loan between 1995 and 1999 if the legislation had been in place, said Mr Cox.