The Insurance Ombudsman, Ms Paulyn Marrinan Quinn, has said lack of funding and censorship, exacerbated by the decision to appoint a new member to her staff without her agreement, made her position untenable and led to her decision to resign earlier this year.

She has called on the insurance industry to implement international best practice in its relationship with the ombudsman and on the Government to support such a direction and has said she is prepared to continue in office to ensure these practices are put in place.

"If I were to depart, as planned, in August, the independence of the office would be grievously damaged and the position of an incoming successor greatly weakened. The least I can do is my utmost to ensure that what I pass on is not a poisoned chalice but a workable and viable scheme," she said.

Ms Marrinan Quinn's comments about the problems between her office and the Council of the Insurance Ombudsman, originally set up to act as a buffer between the ombudsman and the insurance industry representatives on the Ombudsman's Board, support allegations made by Mr Bill McLaughlin earlier this year.

An international mediator and a member of the council, Mr McLaughlin resigned his position after Ms Marrinan Quinn announced her decision to step down, alleging that she had been subjected to extreme pressure from the insurance industry.

In a statement released yesterday, Ms Marrinan Quinn said the council had failed to fully deliver on its buffer function of keeping the ombudsman at arms length from the industry while ensuring the office was adequately resourced.

"Although a budget for the first year was agreed before I was appointed to the post, these and subsequent funds have not been paid consistently and/or on time. I have been forced on more than one occasion to borrow money to pay staff, having failed to get a response from those responsible for funding the organisation," she said.

Ms Marrinan Quinn said the ombudsman's office was currently running a deficit of £39,000 and she had to meet with the bankers last week to discuss the issue.

She also said that some council interventions amounted to censorship of the ombudsman's capacity to inform consumers of their rights and how those rights could be vindicated.

"There is a clear dichotomy between the ombudsman's obligation to use the annual report of the office as a public interest document and the view intimated by the board/council that it is a `marketing tool'," she said.

However, the charges have been denied by both the council and the industry. The council said that budgets requested by the ombudsman were agreed and paid in full at all times. It also said that the role of the council was to receive, approve and publish the annual report in accordance with its remit.

"The council always operated in accordance with this remit," a spokesman said. He added that recruitment of a successor to the ombudsman was at an advanced stage.

Meanwhile, the Irish Insurance Federation (IIF), the industry's representative body, has denied the allegations that Ms Marrinan Quinn had been forced to resign or had been pressurised by the insurance industry during her time in office.

"The insurance industry has not starved the ombudsman of funds. There have never been difficulties in the funding of the scheme," IIF chief executive, Mr Michael Kemp said in a statement.

Once prepared by the ombudsman and adopted by the council, budgets had always been swiftly accepted by the board and funds had been collected from insurance companies on the basis of those budgets, Mr Kemp said.

There had never been any refusal by any company to contribute its share of funding of the ombudsman's office nor any undue delay in transferring funds to her account, he added.

The board twice increased the ombudsman's proposed budget because it felt that she would require greater resources than had initially been sought, he said.

However, Ms Marrinan Quinn said this related to the board's decision to appoint an administrator to the ombudsman's staff without her agreement.

"For the board/council to make such an appointment is in contravention of all accepted norms and principles," she said.

Mr Kemp also denied the charges that the board sought to influence the contents of the ombudsman's report. "The board has made comments and suggested factual corrections but the ombudsman is not obliged to change anything on foot of the board's comments. Submitting such comments on the draft report is hardly evidence of interference or `bullying'," he said. The IIF said its members were happy with the way the Insurance Ombudsman scheme had evolved over the first six years of its operation.

The Minister for Science, Technology and Commerce, Mr Noel Treacy, said he had met with the chairman and the vice-chairman of the Ombudsman's Council and he had been assured that the terms of reference of the scheme continue to be operated satisfactorily. He said he hoped to meet with the council again soon.