The Irish Insurance Federation say loading insurance policies of drivers with penalty points will cut the policies of other drivers with clean records by just 3.29 - the amount of benefit that could be passed on.
The federation point out that even a 10% reduction would mean pushing up the premiums of drivers with penalty points to around 8,000.
Also, studies have found that having penalty points on a licence usually makes a driver fearful of being put off the road, and therefore, more careful and a lesser risk than before.
Martin Long of the IIF said they would not be found wanting in encouraging members to pass on the benefits of the penalty points system.“But let’s be real about the figure, it’s not 15%” he said.
Minister Brennan was angered by the IIF’s response. He said the insurance industry could not calculate the benefit on the basis of loading those with penalty points.
He pointed out that the IIF had put forward a very narrow argument in their letter to him last week. No account was taken of the fact that road deaths had dropped significantly since the points system was introduced.
The reduction was not just deaths on the road, there had also been a serious drop in the number of serious injuries.
Mr Brennan said the Government shared his view that the insurance industry cannot remain on the fence on the issue any longer before deciding whether or not to pass on real benefits.