The government will work with gardaí and the insurance industry to crack down on ghost brokers who have duped thousands of motorists and left up to 10,000 people uninsured on the roads.
Tánaiste Simon Coveney said the government will make policy changes if necessary and will maintain close contact with gardaí on the matter.
Hundreds of premiums have already been cancelled and insurance companies and gardaí are investigating the extent of the issue.
Addressing the matter in the Dáil, Mr Coveney said many victims of the scam are unaware they have been duped.
"Gardaí are liaising with the insurance industry as a whole to try and get a handle on the extent of this issue, which seems to involve significant numbers," he said.
"It is consumers here who are vulnerable, who think they are insured and in fact, they are not in some cases, so this is a criminal investigation that the Garda are resourced to pursue."
Mr Coveney said the government would stay in close contact with the gardaí, adding that additional legislation will be considered if needed to help the work.
Interim CEO of Insurance Ireland Gerry Hassett said it is a "disturbing development" that thousands of motorists have been left uninsured.
He told the Joint Oireachtas Committee on Finance, Public Expenditure and Reform that his sense is that some companies have been more affected than others.
Insurance Ireland warned customers to be vigilant when taking out their premium and to check the Central Bank for a list of authorised insurance firms.
Sinn Féin Finance spokesperson Pearse Doherty said the matter emphasises the need for a dedicated garda insurance fraud unit.
Mr Doherty said: "These criminals are offering unsuspecting consumers low premiums by providing false information to insurance companies, and taking commission from the sale.
"When companies then discover that these policies were bought on the basis of false information, sometimes using stolen credit cards, the policies are cancelled, leaving innocent consumers out-of-pocket and without any cover."
Brokers Ireland, which represents 1,250 brokers, warned customers to double-check the authenticity of any person or company selling or administering insurance policies.
Cathie Shannon, Director of General Insurance at Brokers Ireland, said the consequences for uninsured motorists can be "catastrophic".
"If you purchase car insurance from a fraudster you will be driving without insurance, which is a criminal offence. What makes matters worse is that they are often targeting young or vulnerable consumers, often foreign nationals who are not clear on how the insurance market works in Ireland," she said.
"Think twice before purchasing insurance from sources such as social media sites and carefully check any insurance documentation for accuracy."
A Garda Superintendent warned that ghost insurance brokers are preying on the naivety and inexperience of people unfamiliar with the insurance system in Ireland. He said the criminals involved are particularly targeting non-Irish people.
Supt Tom Murphy, who is leading investigations into the scheme, told RTÉ radio’s Morning Ireland: "A lot of the people we have found are pure innocent victims, new Irish people coming in who fall into a trap because they are targeted in their own language.
"These ghost brokers are preying on the naivety and inexperience of these people to fully understand the Irish system, they prey on victims."