The law firm's head of insurance practice, James Grennan, said that instead of seeing consumer issues as a necessary evil, the Financial Regulator wants insurers to adopt a broad ethical standard of fairness that puts the subjective "best interests" of the consumer at the heart of their operations.

"This represents making a significant cultural change as, for centuries, the relationship between the insurer and its customers was founded on the contract between them and common law principles, such as the duty of full disclosure, which operated by and large, to the advantage of insurers, " said Grennan. Now an entirely new set of rules applying consumer protection principles must be taken into account, he said.

"There's no foolproof way of testing whether financial service providers are complying with the general principles, " he warned.

Margaret Stack, another partner at Goodbody's insurance unit, said the definition of fairness could be open to interpretation and much depended on how the regulator chose to enforce the code. "It could create a very significant culture shock in the industry. Insurance firms will have to take a step back and look at everything they do, " she said.

She also warned that it could stifle innovation in the sector, since firms may opt to narrow their offerings to cope with the increased costs of the so-called "compliance burden" . . . something brokers have long complained about.

However, the Irish Insurance Federation was far more sanguine.

"We are happy with the code. It was introduced after a long period of consultation, it sets out exactly what service providers are expected to do and our member firms have been working hard on ensuring compliance, " said the non-life insurance manager Michael Horan.