All life companies should now "urgently review" their policies to uncover evidence of mis-selling, the Minister of State for Science, Technology and Commerce, Mr Noel Treacy, has said.

Publishing a report into allegations of mis-selling at Irish Life, Mr Treacy said companies should "urgently examine" any possible evidence of mis-selling or churning within their companies. "They should also review their procedures for dealing with customer complaints, including any compensatory measures," he said.

He warned the insurance industry and financial services would be subject to additional regulatory and compliance measures. "I will soon be introducing new regulation on transparency and disclosure, including information on commission payments and sales remuneration."

The report, which was prepared by a Department of Enterprise, Trade and Employment officer, Mr Martin Cosgrove, and which was instigated following revelations of widespread churning at Irish Life, found that a review by the company of the issue in 1994 was "inadequate". A new review ordered last year found an additional 50 "disadvantaged" customers.

The report found that churning - the cancelling of one policy in favour of another solely to earn the salesman extra commission - while declining, was still in evidence last year. In 1998, some 17 Irish Life policyholders, or about 0.5 per cent of all 1998 policy proposals and sales were "churned" by the life office's salespeople. One salesman is now the subject of disciplinary procedures as a result.

Following media reports last June, 269 of the company's policyholders who were concerned they may have been churned requested their policies be reviewed. Of these, 75 were found to have been victims of mis-selling and were paid compensation.

However, the report found no evidence that senior management or board members encouraged the practice. But it did find that churning was a problem at Irish Life in 1994. Mr Treacy recommended that Irish Life's systems for the prevention of churning should be improved on an ongoing basis.

"The company is continuing to examine and investigate other disadvantaged customers and has assured the Department that proper restitution measures will be undertaken where they are warranted," he said.

Irish Life has paid £109,910 to policyholders who were disadvantaged by churning between 1993 and 1998. In addition, two policyholders have had their policies reconstructed and 54 policyholders have been written to, to clarify their benefits position.

Five salespeople are still the subject of disciplinary proceedings while the circumstances of 18 others are being examined.

Mr Denis Casey, chief executive of Irish Life's retail division, said the report "clearly confirms Irish Life's abhorrence of the practice of churning and our extensive efforts to protect the interest of customers. This exercise - stretching over six months - has allowed us to identify an additional small number of dissatisfied customers and restore them to their correct position".

The report called on Irish Life to extend to all cases its policy of reporting to the Garda suspected fraudulent activity. A limit of £5,000 currently applies.

There are several proposals relating to general sales of life assurance policies. Mr Cosgrove stated that the very fact that churning was not illegal was a cause for concern and left more vulnerable policyholders open to potential manipulation.

He also recommended that the committee looking at the establishment of a single financial regulator be furnished with a copy of the report as a single unit ought to be set up to enforce the proposed life disclosure regulation.