The Government won't tell the gardaí to set up a dedicated insurance fraud unit, according to the Minister of State Michael D'Arcy.
It comes after the Justice Minister confirmed proposals for a dedicated unit have been shelved.
The Personal Injuries Commission had previously recommended the establishment of an Irish Garda Fraud Investigation Bureau, along the lines of a similar department in the UK.
However, Charlie Flanagan said the Garda National Economic Crime Bureau will instead guide Garda divisions and provide training in the investigation of insurance fraud.
He added: "While the [Garda] Commissioner has indicated that he does not support industry funding of Garda units, he is open to considering other industry-funded proposals to combat insurance fraud."
Michael D'Arcy - who has special responsibility for Financial Services and Insurance - said the Government doesn't dictate how Commissioner Drew Harris deploys his forces.
He argued: "We said we would consider the matter, and discuss it with the Commissioner - and the Commissioner has decided to go down the path of having an insurance fraud section in each division.
"If the Government starts telling the Garda Commissioner how to deploy his forces, we'd be in really big trouble. That's not the way it works.
"It works on the basis of the funding is provided to the Garda Commissioner... and with the best police practices and the best knowledge, that's a matter for the Commissioner."
He defended the Commissioner's decision, saying he believes a single dedicated unit would "only be after the larger insurance frauds".
He added: "What we need to do is, throughout the length and breadth of the country, people who are putting in fraudulent claims and who are exaggerating their claims... they need to be pursued."
He insisted there are a number of cases related to insurance claims ongoing, and that there will be additional expertise in the force under the plans being implemented by the Commissioner.
