The Financial Services Authority (FSA) has issued guidelines on how insurance firms should apply European rules governing the industry.
The insurance groups directive regulates insurance undertakings within an insurance group.
Its aims include preventing double use of the same capital to cover risks taken by an insurer and its related undertakings.
It also aims to assess resources available to meet the overall insurance risk faced by a group and to monitor transactions within an insurance group.
An FSA spokesman said the insurance industry had asked for guidance and the FSA was happy to help companies introduce it into the UK.
He said: "We welcome comments on the guidance from firms, professional bodies and other interested parties. This will then be included in the FSA handbook."
The draft guidance can be found in the FSA's consultation paper 116, available on its website at ww.fsa.gov.uk.
