British insurers have accused the Bank of England of imposing unnecessary capital requirements that are driving up the cost of insurance.

UK reports quote Association of British Insurers Director of Regulation Hugh Savill criticising the central bank for raising requirements beyond the European Union’s minimum standards under the Solvency II regime.

He says the requirements are a “deadweight” on insurers’ balance sheets and will make insurance more expensive and restrict choice.

British insurers are required to hold capital for a one-in-200-year event, but the regulator can impose additional measures. Mr Savill says there have been several such instances in recent months and it is beginning to look like a pattern.

Companies have faced additional requirements because of the bank’s concern about their credit risk and, for life insurers, longevity risk.