Draft terms for a study of the insurance sector have been published with a view to inviting observations and comments. The study is to be conducted jointly by the Department of Enterprise, Trade and Employment and the Competition Authority and will focus on motor, employer's liability and public liability insurance.

It will examine whether there are any anti-competitive practices or constraints on competition.

"Reaction from interested parties is now being sought on the proposed scope of the study and the approach to be taken," said the Tánaiste, Ms Harney.

"Following the period of consultation, the terms of reference will be finalised."

Ms Harney said that, if consultations revealed particular synergies that could arise from the inclusion of other non-life insurance in the study, such as home, commercial property or travel insurance, consideration would be given to adding them to the study.

Ms Isolde Goggin, director of the regulated markets division at the Competition Authority, said the two main issues affecting competition were the extent of the rivalry between different insurance companies and how easy or difficult it was for new insurers to enter the Irish market.

The study will lead to recommendations on legislative and other changes that might increase competition, including, if thought necessary, recommendations concerning changes at EU level. Details in relation to the study can be read on the websites www.tca.ie and www.entemp.ie

The Government's moves come against a backdrop where falling equity markets have wiped billions of euros off insurance companies' balance sheets.

Background notes issued yesterday along with the confirmation of the coming study said the Irish insurance sector had been affected by poor investment returns, substantial increases in reinsurance costs, and reduced capacity in the global reinsurance market.

Submissions on the draft terms of reference will be accepted until November 1st.