CII chief executive Sandy Scott said that Irish insurers should be encouraged by the fact that their government had engaged in dialogue with the industry.

"At least you're having a debate about the role of society, the government and insurance," he said.

"That debate is going on at the Treasury in the UK, but is not being given much credence."

However, Scott pointed out that the nature of a risk-based approach to capital meant that insurers would withdraw from unprofitable markets, despite government demands that cover must be provided.