LONDON (Reuters)—Britain's insurance companies must prepare for new European Union capital rules due in January 2013, the country's top markets regulator said, even as the E.U. flagged a delay to some elements.

Despite the tight timetable to prepare for the complex new Solvency II rules, the Financial Services Authority said it would forge ahead.

"We at the FSA will be ready," the watchdog's chief executive, Hector Sants, told an FSA conference on insurance on Monday. "We do require the firms to be ready as well, until we hear otherwise."

The FSA is being scrapped next year, its powers divided between the Bank of England and a new standalone Financial Conduct Authority.

Mr. Sants will head the Prudential Regulation Authority, which will be the new regulatory division at the BoE to supervise banks and insurers.

New capital rules

Solvency II is the largest task facing regulators in the sector. The rules will change how insurers calculate the amount of capital they need to cover risks on their books.

The E.U.'s financial services commissioner, Michel Barnier, said Friday he would stick to the 2013 date in principle but that there might be a soft phase-in of some elements.

"If the European Commission wanted to change the implementation date, then that is something we could see coming out of the sheer difficulty of the timetable," said Julian Adams, head of insurance at the FSA. "We will be ready for whichever date is set."

Effective date in question

A Commission official said on Monday that E.U. states and the European Parliament were negotiating a draft measure that includes the effective date of Solvency II.

"In addition to a number of specific areas where transitional measures are needed, the Commission is aware that certain parties may need a more general, short transitional period in order to achieve a smooth implementation of the new system," the Commission said in an emailed statement said. "This is true for some undertakings and as well for some supervisors," the statement said.

U.K. insurers

U.K. insurers had to pay a special levy to the FSA to pay for regulators to implement Solvency II.

"A possible outcome is that the U.K. will implement in 2013, and other regulators will implement in 2014," said Michael Wainwright, a partner at Eversheds lawfirm.

"This is not an ideal result for U.K. insurers, but it may be better than incurring an extra year of transitional project cost," Mr. Wainwright said.