The government and the FSA have launched a joint consultation on EU Solvency II proposals for modernising the rules for European insurers.

Economic secretary to the Treasury Ed Balls and chief executive of the FSA John Tiner have announced the UK's proposals for a change in the approach to insurance supervision, aiming to minimise the administrative burden on insurance groups operating in the EU.

These include assessing how much capital is required by insurers by looking at the sector collectively in order to lower the group capital requirements.

Balls said: "These proposals will allow insurers to work more efficiently across borders, while aligning our rules with global standards.

"We hope our proposals will stimulate debate on supervisory co-operation and convergence."

He added that the UK's proposals are an example of the government's determination to achieve a proportionate and risk-based approach to EU financial services rules.

"They will also contribute to the competitiveness of the insurance sector, bringing benefits to policyholders throughout the EU with more innovative and better value insurance products.

Tiner said the proposals were important for developing a more efficient framework for the risk-based supervision of insurance groups in Europe.