The Swiss financial services regulator will allow insurers “breathing space” on solvency requirements, as low interest rates continue to hit investment income.

The Swiss Financial Markets Supervisory Authority (Finma) says it will temporarily relax solvency rules before a European Union announcement on the implementation of the Basel III framework.

Earlier this year the EU said it was considering introducing new regulations over seven years to ease the burden on insurers, which had criticised the changes as overbearing.

Finma will adjust the valuation yield curve and the supervisory intervention ladder to give insurers “some breathing space”, CEO Patrick Raaflaub says.

The solvency test requires insurers to give a mark-to-market valuation of assets and liabilities that takes into account their investments.

The decision gives temporary respite to some of the world’s largest insurance groups which are based in Switzerland, including Zurich, Swiss Re, Ace and Winterthur.

“For 2013, Finma will make some temporary adjustments to the [solvency test] as a measure to alleviate the situation for insurance companies, especially those in the life segment which have been particularly badly hit by the persistently low interest rates,” Mr Raaflaub said in a speech in Zurich.

Finma is consulting with insurers on new provisions under supervisory law, which set out principles for cash-flow reporting.