In the face of fast rising car insurance premiums, the Government is now considering changes to arrangements that hold solvent insurance companies responsible for claims against individual insurers who go out of business.

Currently insurers says that one of the reason for price hikes is the fact that they have allow for a risk factor of competitors going bust and leaving them exposed. At present courts have ruled that solvent insurers can be held liable for claims when an insurer goes out of business, however the Motor Insurers' Bureau of Ireland is appealing the recent rulings.

Under the current legal framework Ireland’s insurers are liable for an estimated €90m in claims against drivers who were covered by Setanta Insurance following its 2014 collapse. It is estimated that motorists will pay for this with a €50 premium increase.

Insurers argue that the costs of claims against failed companies such as Setanta should be met by the Insurance Compensation Fund.