The Competition and Consumer Protection Commission (CCPC) is to conduct a study of the public liability insurance market here.
It follows a request from the Minister for Business, Enterprise and Innovation, Heather Humphreys, who has asked that it be completed as soon as possible.
The probe will look at the mechanics of the operation of the market, as well as the functioning of competition within it and whether any practice or method of competition is having an impact on the pricing levels of public liability insurance.
The development has been welcomed by the Alliance for Insurance Reform, although it said employer liability should also be included.
"Our members have struggled to understand how their liability premiums have rocketed in the last 5 years while there has been no corresponding increase in either claims or awards," said Peter Boland, Director of the alliance.
"Research we carried out in May showed that on average, liability policyholders experienced an average increase of 204% in their premiums over the last 5 years, closing businesses, making many more unviable and threatening many organisations in the Irish voluntary and community sectors."
"We would welcome any additional transparency that might give an insight into why this happened. "
Under the Competition and Consumer Protection Act 2014, the Minister has the power to request the CCPC to carry out a study or analysis of issues relating to consumer protection and welfare, practices or methods of competition affecting supply and distribution of goods or provision of services, or any other competition matters.
The CCPC has a range of powers when carrying out such investigations, including the ability to interview people under invitation, request the production of documents or records and issue requests for information to individuals and bodies.
"The purpose of conducting this study is to bring greater transparency to the market by shining a light on the practices of insurance firms and intermediaries including brokers," said Minister Humphreys in a statement.
"In particular, the issue of increases in public liability premia for businesses is being raised with me as Minister as posing a potential systemic threat to the very existence of many businesses."
She also noted that concerns have been expressed directly to her on the roles of insurance firms and intermediaries (including brokers) in what, at times, appear to be very sharply increasing levels of public liability insurance premia.
The move is the latest by the Government as it tries to address the problem of insurance premiums and the high costs of claims.
However, the Alliance for Insurance Reform has urged the Government to move much quicker to publish other long-promised transparency measures on liability insurance, like the National Claims Information Database and the Key Information Report on Employer and Public Liability Insurance Claims due at the end of last year.
In a statement Brokers Ireland denied that its members were involved in anti-competitive practices or working with insurance firms to rip-off customers.
"Premia are set by insurers, not Brokers. Public liability and all other insurance premia are a matter for insurers," said Brokers Ireland's director of general insurance Cathie Shannon. "Our members are highly regulated by the Central Bank and it is the interests of the customer which are always to the forefront of our members' considerations."
The organisation also called for the reforms laid out by the Cost of Insurance Working Group were implemented as soon as possible.
Small business organisation, ISME, said it is delighted to see the intervention by Minister Humphreys.
But it also said commercial motor, public and employer liability insurance need to be included in the CCPC review.
It also urged the Government to implement the other measures required for reform of the insurance market.