European insurers are being granted two extra months to meet new Solvency II capital requirements.

European Union Financial Services Commissioner Michael Barnier has delayed the introduction of the Solvency II framework until December 31, 2012, aligning its implementation with the end of the financial year and closing of accounts.

Mr Barnier says new Solvency II rules – a risk-based system measuring assets against liabilities – would not be onerous but demand “necessary and sufficient prudence”.

Uncertainty over the demands of Solvency II has unnerved the industry, with Moody’s already projecting weak economic growth and restrictive regulations will limit growth among European insurers.

Following a “stress-testing” exercise earlier this year, European insurers have shown they are strong enough to withstand a serious financial crisis.