The Central Bank is to begin a review of the use of telematics technology in the insurance industry and assess how the ongoing suitability of long-term life-assurance products is monitored.
The plans are among the regulator's main priorities for this year set out in a new report.
The report also claims that the absence of a consumer-focused culture in some organisations poses a key risk of potential harm to consumers and investors in financial services.
The Consumer Protection Outlook Report for 2021 also identifies the Covid-19 pandemic as another potential source of difficulty, along with ineffective disclosure about products and services.
Unfair practices, risks from technology and mis-selling are also highlighted by the research as possible causes of problems.
"Consumer protection begins with the financial services firms," said Director of Consumer Protection at the Central Bank, Gráinne McEvoy.
"We expect all firms to consider each risk we have identified, in the context of their own risk assessments, and to take all appropriate actions to protect their customers," Ms McEvoy said.
The bank says it expects firms to be proactive and meticulous in ensuring they do business in a way that protects consumers and investors.
It also said that such cultures are evident throughout the entire structure and that the firms engage immediately with it in relation to any decisions or plans on branch closures.
However, the Financial Services Union criticised the Central Bank's lack of action on branch closures.
"Pronouncements by the Central Bank on consumer protection ring hollow to those communities faced with the loss of their local Bank," said FSU General Secretary, John O'Connell.
"The revelation that the Central Bank Governor did not request a meeting with Bank of Ireland on the Banks plans to close 88 branches show a complete lack of customer focus and highlights the need for a cultural change in the Central Bank."
"The Central Bank undermines its own authority when it fails to deal with or comment on the scale and speed that our Banks are implementing change."
Regarding the impact of the pandemic, the regulator says it expects firms to adopt interim measures to support borrowers experiencing temporary income shocks.
Companies must also be clear about what cover is provided by insurance policies and where there is a doubt about the meaning of a term in an policy, interpret it in a way that is most favourable to the customer.
It also outlines the Central Bank's priorities for this year around consumer protection, including ensuring borrowers in financial distress are treated fairly, sympathetically and positively.
Today the Central Bank published the Consumer Protection Outlook Report 2021. Our Consumer Protection Priorities 2021 are outlined below. Find out more at https://t.co/FYvEwsmk0p pic.twitter.com/zuvPIr73gM
— Central Bank of Ireland (@centralbank_ie) March 29, 2021
The regulator pledges to carry out intrusive risk-based supervision and assessment of companies and sectors where there is the greatest risk of potential harm to consumers, the document states.
As part of this process, the regulator will conduct a review on the use of telematics - a black box or smartphone app that that tracks data on many aspects of your driving - in the insurance industry.
It will also assess how the ongoing suitability of long-term life-assurance products is monitored.
The bank will also seek to make firms take responsibility for embedding consumer focused cultures so they can deliver fair outcomes with consumers and investor interests at heart, it says.
It also aims to improve its gatekeeping function in relation to firms and individuals wanting to operate here, as well as strengthen the consumer protection framework and influence and shape policy development around regulation.
"We publish this report outlining our priority areas and risk assessment every year so firms are clear on the issues and areas that we expect them to pay close attention to, and to take action to avoid negative effects on consumers and investors," Ms McEvoy said.
"However, it is important that firms do not treat either the priorities or risks as exhaustive lists," she stated.
"We will remain responsive to issues that may arise and, most importantly, we expect we expect firms to look beyond the risks outlined to ensure that other risks that may be relevant to their customers or business area are properly managed," she added.
Regarding its expectations of firms in relation to stamping out unfair practices, the regulator says they should strengthen consumer-focused culture in relation to pricing decisions and practices.
They should also have strong internal governance arrangements and oversight of algorithms, it added.
