The new FSA chief executive John Tiner has criticised the failure rate among London Market insurers.

He blamed weak capital requirements, which are addressed in the FSA's latest consultation paper, CP190: Enhanced capital requirements and individual capital assessments for non-life insurers, for the failures.

He said: "While there have been very few failures among UK general insurers in the retail market, the failure rate among London Market insurers has been too high."

Under the proposals in CP190, general insurers will be subject to a risk-based enhanced capital requirement, based on capital charges to be applied to asset and insurance risks.

Insurers will also be subject to an individual capital guidance, based on the FSA's view of how much capital would be adequate for each firm to hold, taking into account each insurers assessment of their own capital needs.

"For some non-life insurers the new requirements will have only a modest effect, because they hold capital well in excess of the proposed requirements," Tiner said. "However, for other non-life firms it could require them to respond by either raising new capital or by reducing the risks they face or underwrite."

Tiner, who was previously managing director of the FSA's consumer, investment and insurance directorate, will take over as FSA chief executive on 22 September.

It is understood he is preparing a major management shake-up once he officially takes the FSA reins.