BRUSSELS—The most recent study of the effects of Solvency II shows that most European insurers and reinsurers are financially sound, but changes may be needed to formulas to assess catastrophe exposures before the new rules go into effect in 2013.

The Frankfurt, Germany-based European Insurance and Occupational Pensions Authority last week published results of the fifth quantitative impact study on Solvency II, in which almost 70% of all companies that will come under the new rules' scope took part. That participation figure was more than double the 33% of European companies that completed the fourth quantitative impact study in 2008.

According to EIOPA, the QIS 5 results show that insurance companies that took part in the exercise hold e395 billion ($549.17 billion) in excess capital to meet their solvency capital requirements under Solvency II and e676 billion ($939.84 billion) in excess capital to meet their minimum capital requirements under the upcoming risk-based capital regulatory regime.

The QIS 5 results show that most European insurers will be able to adjust to Solvency II without having to raise additional capital, according to Moody's Investors Service Inc.

Philippe Guijarro, a partner at PricewaterhouseCoopers L.L.P. in Edinburgh, Scotland, said the results show that only 15% of European insurers would fail to meet the minimum Solvency II requirements and only 5% would be at risk of losing their licenses.

“This percentage will almost certainly reduce as companies take steps over the next two years to address their capital position,” Mr. Guijarro said in a statement.

The study also examined formulas to determine capital requirements under Solvency II. “QIS 5 shows that, while the calibrations in the system are in general accepted as appropriate, EIOPA already is performing additional work in particular in the areas of nonlife and catastrophe modules to improve those calibrations,” the regulator said in a statement.

The Comité Européen des Assurances, which represents insurers and reinsurers in Europe, welcomed the fact that QIS 5 underscored the financial strength of the industry, but it also said adjustments must be made to Solvency II before it goes into effect.

The Brussels-based CEA said current calibrations “result in excessively high capital requirements” for nonlife and catastrophe insurers and should be revised.

Lloyd's of London, which has called for changes to the way its catastrophe exposure is treated under Solvency II, welcomed EIOPA's support of refining formulas to determine required capital.

“Whilst we remain supportive of Solvency II, the shortcomings identified in QIS 5, particularly around nonlife and catastrophe risk, need to be addressed,” Sean McGovern, general counsel at Lloyd's, said in a statement.

Fitch Ratings Ltd. said that while QIS 5 showed that the overall capital position of European insurers and reinsurers remains sound, “nonlife and catastrophe insurers will be hoping for more favorable capital requirement calibrations under the new Solvency II regulatory regime.”

David Prowse, a senior director in Fitch's insurance team in London, said insurers and reinsurers may have to recapitalize or reshape their business models unless those calibrations change.

Colin Murray, a director at Towers Watson & Co. in London, also welcomed EIOPA's statement that it will continue working to resolve outstanding issues in the models under Solvency II. However, he also said time is of the essence.

According to Mr. Murray, QIS 5 did not specifically test governance, risk management and reporting requirements of insurers, issues he said require the industry's attention ahead of the 2013 implementation date.

“Solvency II is not just about risk measurement and quantification,” Mr. Murray said. “Successfully responding to this new regulatory regime will depend much on the degree to which companies recognize and respond to their governance and risk management needs ahead of the 2013 deadline.”