European Commission officials carried out unannounced inspections at a number of companies yesterday
The Taoiseach says yesterday's raids on insurance companies are a sign that action is being taken to ensure companies are not engaged in price fixing.
Leo Varadkar's comments come despite his admission that the Irish authorities did not initiate yesterday's raids.
Yesterday, the European Commission confirmed its officials had carried out unannounced inspections at the premises of a number of motor insurance companies operating here.
The European officials were accompanied by officers from the Irish Competition and Consumer Protection Commission (CCPC).
In a statement, the European Commission said it has "concerns that the companies involved may have engaged in anti-competitive practices in breach of EU antitrust rules that prohibit cartels and restrictive business practices and/or abuse of a dominant market position".
The commission stressed that the raids do not mean companies are guilty of anti-competitive behaviour.
The representative body Insurance Ireland, meanwhile, confirmed it was subject to an unannounced inspection.
The organisation said it understands the the inspection was in connection with "databases concerning claims history information and drivers’ penalty points".
Today, Leo Varadkar told the Dáil that yesterday's raids were not linked to an inquiry which the CCPC is already running.
The Taoiseach said the authority's work, combined with the EU raids, shows insurers are being watched.
He said: "I think the actions that occurred recently, and actions taken [...] by the Competition and Consumer Commission in recent times, show real evidence that action is being taken to enforce competition law".
He added that law is in place to make sure there is "no collusion or cartels among businesses seeking to fix prices".
On Newstalk Breakfast this morning, Fianna Fáil finance spokesperson Michael McGrath argued that the watchdogs would not engage in raids of this sort "for no reason".
He said that while it was known since last year that the CCPC was investigating the industry, the EU probe is new.
He observed: "We understand it has been underway for the last number of months. They seem to be examining this from a more fundamental perspective of whether or not there is a level playing field for new entries into the Irish market."
Deputy McGrath suggested that the motor insurance market is currently "dysfunctional", and stressed the importance of the recommendations laid out in a recent report on the industry.
He told Paul: "I think the key recommendations would be around having a national claims database, so that we can once and for all get a handle on the accurate data that's underpinning the Insurance Ireland claim that this is all about awards, award levels, and compensation.
"The second issue is the Personal Injuries Commission, which is now benchmarking the level of awards in Ireland compared to other jurisdictions - and that work will be completed by the end of this year."
He added: "The problems are system-wide, there's no doubt about that. It is systemic, and it is consumers who are ultimately being forced to pick up the tab."