UK insurers are set to anger their European rivals by entering into talks with the International Accounting Standards Board (IASB).
According to weekend reports, the talks are aimed at achieving a radical overhaul of insurance accounting.
The UK Accounting Standards Board is understood to be trying to persuade UK insurers to adopt an accounting regime that measures assets and liabilities at market value.
However, European insurers insurers oppose a fair value regime because they fear the volatility it could create in their accounts.
Other European insurers are concerned that the UK initiative may undermine the industry's effort to water down the IASB's plans.
Association of British Insurers director-general Mary Francis said: "There is quite a spectrum of views across companies within the UK and across Europe as a whole about the achievability of something for phase one. Realistically, many people feel that it is phase two we are looking towards."
