The EU's Solvency 2 requirements are inadequate for insurers, according to an FSA executive.
As a result, UK insurers will be expected to meet additional FSA solvency standards.
FSA prudential standards division manager Tom Crossland said: "While the FSA is supportive of the Solvency 2 development, the EU minimum for insurers capital requirements is not enough."
Crossland said: "The EU minimum was insufficient because it was not risk sensitive.
"The FSA will ask UK insurers to assess their own capital needs - there will be a lot of emphasis on stress and scenario testing.
"The measurement of insurer's insolvency will be a six monthly exercise and we will be sharing opinions on best practice."
The FSA will introduce the additional requirements due to the slow progress being made by the EU on Solvency 2.
"The EU negotiations on Solvency 2 will not be concluded until 2005, consequently there is a need in the UK to progress on a faster track," he said.
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