Fianna Fáil has said that at least 23 motor insurance companies are operating here, but are regulated elsewhere in Europe.
The party is moving a Dáil motion later today calling for action for customers left in limbo after the collapse of Setanta Insurance three years ago.
The party is also calling on the Central Bank to make consumers more aware of these foreign registered firms.
Finance spokesman Michael McGrath said that action is needed.
"There has to be an agreed motor insurance compensation framework to deal with any further incidents of a motor insurance collapse," he said.
"Consumers need to be made far more aware of the regulatory status of the insurance company that they're buying from, and the Central Bank and the Government need to raise these issues at a European level."