UK insurers have spent more than £3 billion implementing Solvency II, the Independent on Sunday reports.

FTSE 100 insurers told the paper that the cost of complying with the new European Union capital regime, which has yet to come into force, had far surpassed the FSA’s original £1.8 billion estimate.

The Independent on Sunday noted that the cost could keep rising as there is as yet no end in sight. Solvency II has been beset by delays. The implementation date has been delayed to 1 January 2014, and there are some indications that the new rules will not come into force until 2016.

Some observers even suspect the new capital regime will be sidelined altogether and will never get off the ground.

A source told the paper: “Billions have been spent on Solvency II, with a high probability that the UK will end up with a regulatory regime not much different from the current one, which after all worked perfectly well even through the financial crisis.”

Expected compliance bill busts the FSA’s £1.8 billion estimate.