The Comité Européen des Assurances, which represents European insurers and reinsurers, said it welcomed the initiative which it said would modernize solvency requirements.
Charlie McGreevy, European Commissioner for internal market and services, said that lessons had been learnt from the previous system.
"One of these is that capital is not enough in ensuring the soundness of insurers. What is needed is a greater focus on the management of insurers and the management of risks," he said in a speech to launch the Solvency II proposal.