LONDON (Bloomberg) — New European Union rules to control the capital insurers set aside for their underwriting may hasten the consolidation in the industry, accounting firm PricewaterhouseCoopers LLP said.The so-called Solvency II rules, a draft of which will be published by the European Commission tomorrow, may mean capital requirements for large insurers will be proportionately lower than for smaller insurers, encouraging less efficient companies to merge or be taken over, Bryan Joseph, a partner at the New York-based accountancy firm, said at a briefing for journalists in London yesterday.

Aviva Plc, the UK's biggest insurer, and Swiss Reinsurance Co., the world's No. 1 reinsurer, are among companies that may benefit the most from the rules, PwC said. Companies' foreign units will be more accountable to the parent's home-market regulator, instead of just having to comply with capital-requirement rules set separately in each EU member state.

"The big insurers will be the big winners," Joseph said. "Once you start looking down the tree to the smaller, slightly less diversified players they will find it's a lot more difficult to survive. They may look to find someone to merge with or change their business."

The new rules, which are scheduled to be rolled out in 2012, are also aimed at eliminating the differences in insurer-capital regulations between European Union member states. This may encourage insurers to relocate their headquarters according to other criteria, including taxation, PwC also said.

Areas of the Solvency II rules still to be agreed by EU member states include proposals for insurers to disclose more information about how they allocate capital to their underwriting operations, according to PwC.