Dail inquiry planned into insurers

A Dβil investigation of the insurance industry similar to the DIRT tax inquiry is being planned.

Labour's Mr Pat Rabbitte said last week's report on the industry by the Motor Insurance Advisory Board should form the basis of an examination similar to that adopted by the Public Accounts Committee during the DIRT affair.

The report could be used as a "book of evidence" for a cross-party investigation, Mr Rabbitte told the Oireachtas Committee on Enterprise and Small Business yesterday. He said the recent Supreme Court judgment on the Abbeylara investigation was concerned with that alone. It was not as threatening to Oireachtas investigations as was thought.

The committee chairman, Fianna Fβil's Mr Ivor Callely, agreed to recommend the setting up of an inquiry to the equivalent committee in the next Dβil.

Mr Joe Higgins, Socialist Party, called on his colleagues to take on "vested interests" in insurance and the legal profession.

The legal profession was "a law unto itself" and was a key vested interest that had to be taken on. It was "a closed shop" which set its own fees, which were exorbitant, he said.

According to Senator Willy Farrell of Fianna Fβil, a large number of insurance claims were not justified. Why were false claims not being followed up? he asked.

Senator Farrell accused the insurance industry of "aiding and abetting this kind of dishonesty".

Mr Callely read a letter he received from Hibernian General Insurance in which the company criticised the "selective use of data" used in relation to the insurance industry.

The DIRT inquiry has so far yielded €446 million to the Exchequer in tax, interest and penalties, according to the Minister for Finance, Mr McCreevy.

The direct cost of the inquiry was just over €3 million, he said. The inquiry investigated bogus non-resident accounts set up between 1986 and 1998 and aimed at avoiding Deposit Interest Retention Tax.