The Professional Insurance Brokers Association has called for Irish Life to be split from Permanent TSB.
It issued a statement reacting to the expected takeover of Irish Life & Permanent by the State as a result of the capital which the organisation will need on the back of the bank stress tests.
Tonight, the PIBA said it was 'essential' the life assurance and pensions business Irish Life 'returns to private ownership to ensure competition and vibrancy in the life insurance sector.'
It is understood that the amount of capital required for the group's bank PermanentTSB is likely to be in the region of €600m to €1bn.
Shares in Irish Life & Permanent closed down more than 45% in Dublin today, ending at 40.5c.
Earlier today, the company was valued at €200m so the scale of capital injection which would be required by the State is likely to force the organisation into State control.
The development will have no effect on customers. Depositors will continue to be covered by the State guarantee.
Finance Minister Michael Noonan is likely to make a statement which will include addressing the future structure of the banking system on Thursday.
The change in ownership of PermanentTSB would be likely to have significant ramifications for potential mergers in the banking sector.
