The Competition and Consumer Protection Commission has launched an investigation into anti-competitive practices in the motor insurance sector.
It has issued summonses to major motor insurance providers and industry groups representing insurers and brokers.
The CCPC is investigating suspected breaches of competition law.
In a statement this afternoon, the CCPC said "the investigation relates to industry participants openly signalling up-coming increases in motor insurance premiums in the State."
The CCPC said the evidence it collects will help in deciding if there has been any breach of competition law.
The Competition & Consumer Protection Commission has launched an investigation into motor insurance practices. https://t.co/xZ0t2AM1XX
— RTÉ News (@rtenews) September 13, 2016
It said it has been monitoring the motor insurance industry and how the sharp rise in premiums has had a significant impact on consumers.
The Commission said it is continuing to closely monitor developments and will, if necessary, "take action to stop specific anti-competitive practices in the motor insurance sector".
CCPC Chairperson Isolde Goggin said: "Statements by senior industry players have raised serious suspicion as to whether there is a link between these messages and subsequent price increases.
"The evidence collected through both the witness summonses and the information requests will assist us in establishing whether there has been a breach of competition law."
Anyone with evidence of such a breach is urged to contact the CCPC.
In a statement, FBD Insurance said it welcomed the investigation, adding that there are many factors that influence costs for the consumer.
These include the relatively high cost of bodily injury awards, it said, and called for increased powers for the Personal Injuries Assessment Board in the claims process.
MEP Brian Hayes welcomed the CCPC move but said "it has taken some time but the CCPC has slowly realised the serious nature of the rise in car insurance premiums and has finally decided to investigate the price hikes.
In a statement, Mr Hayes said: "While it is late, the action is welcome and follows the clear suggestion by the European Commission that the CCPC is the appropriate body to investigate the reasons for the increased cost of car insurance."
Sinn Féin Finance Spokesperson Pearse Doherty said the move has come as a result as Oireachtas Finance Committee hearings this week.
"It is concerning though, having given a warning to the industry for the same offence only recently, the CCPC has to act again. It seems the insurance industry is not too put out by the CCPC.
"We have heard this week and last from hauliers, taxi drivers, the legal profession and consumer representatives that the industry has been acting in a fashion akin to a cartel," he said.
"We have heard an incredible amount of spin from the insurance industry in recent times. It does not stand up to any scrutiny though. They have been fundamentally dishonest in not accepting any responsibility for their actions.
"Hopefully today's move by the CCPC will help them face the truth."
Finance Committee investigation into motor insurance industry
The Oireachtas Finance Committee has meanwhile been hearing from motor and haulage groups as part of their investigation into rising costs in the motor insurance industry.
Chairman and Fianna Fáil TD John McGuinness said many of the contributors have told the committee that the industry has been behaving in a "cartel-like fashion".
He said it was clear that there was a huge amount of information being withheld by the industry.
Representatives from the industry are due before the committee on Thursday.
Deputy McGuinness said his committee would continue with its deliberations and will report by the end of October.
"Something has to be done immediately in this sector," he added.
