Plans for a dedicated Garda Insurance Fraud Unit have been abandoned.
A letter from the Justice Minister Charlie Flanagan to TD John Curran said a more general anti-fraud approach is being adopted instead.
Mr Flanagan said the Garda National Economic Crime Bureau will guide divisions and provide training in the investigation of insurance fraud.
Minister Flanagan said: "The Garda Commissioner is of the view, with regard to fraud investigations including insurance fraud, that a divisional focus is preferable rather than the establishment of a centralised investigation unit.
"This approach is aligned with a general divisional-focused Garda model. It is the intention of the Commissioner that the Garda National Economic Crime Bureau (GNECB) will guide divisions and provide training in the investigation of insurance fraud."
Peter Boland, director of the Alliance for Insurance Reform, said that the Government has "fudged" on their promise of a specialised insurance fraud unit but urge the Government to use personal injury funds to get the plan going.
He said: "After two years of delay, it now appears that a fudge is being developed by way of generalised divisional fraud units. If the highly-specialised and technical crime of insurance fraud is to be properly tackled, this structure must at very least have a properly-funded, specialised unit at headquarters level coordinating a specific response to insurance fraud.
"Not only would such a structure provide a dedicated channel for complaints and prosecutions regarding insurance fraud, but it would act as a clear deterrent to anyone considering lodging a fraudulent or exaggerated insurance claim.
"The key to successfully tackling insurance fraud is resources. If what has been announced is just part of a restructuring with no new resources then we can have little confidence that insurance fraud will get the priority it deserves.
The Personal Injuries Assessment Board has reserves of over €17,000,000 which consists primarily of fees paid by policyholders against whom claims have been lodged.
"So it would make absolute sense that the Government use these funds to establish a dedicated Garda unit that would be central to the fight against fraudulent claims."