The Data Protection Commissioner is to introduce a code of conduct for insurance companies.
The development follows concerns about a register held by the companies on people who have been turned down for insurance on health grounds.
The commissioner is to carry out an audit of companies later this year to ensure consumers rights are upheld.
The insurance companies ask consumers for a health check by a doctor or medical records.
If somebody is refused cover on medical grounds their details are put on a central register operated by the Irish Insurance Federation.
When an individual re-applies to another company it can see if that person was turned down before and get their medical records from the first insurance firm the consumer applied to.
The IIF says people sign a clause which allows companies exchange information when they apply for cover.
The federation says this protects it from people hiding serious ailments.
Talks on a new code of conduct have already begun.
The data protection commissioner says the federation handles sensitive medical information and as such he expects to receive complaints about it.
People are also able to raise issues with the Financial Services Ombudsman.
