As a result companies would have less money to invest in their businesses and would buy less insurance, leaving them more exposed to big losses, it added.
In a statement issued today AIRMIC reiterated its support for the original principles of Solvency II, but said that the reform had strayed from its original mission and was imposing burdens out of all proportion to the problems it was addressing.
"The sharp increase in capital requirements for insurance companies under Solvency II means that there will be less choice of insurance, less flexibility and greater cost. Insurance companies do not pose systemic risk to the economy and, unlike many banks, they have not been found wanting in the recent financial crisis," said John Hurrell, chief executive at AIRMIC.
"Our members are concerned that they're going to take a lot of pain for very little gain when buying insurance for their organizations. There's a feeling that the EU is addressing a problem that doesn't exist."
Mr. Hurrell cited a recent report by Ceiops, the committee of national regulators overseeing Solvency II, which tested the resilience of the insurance sector under several scenarios.
The results of the exercise indicated that the large European insurance groups would remain resilient as currently capitaliZed even in the most severe scenarios.
Mr. Hurrell also drew attention to the effects of Solvency II on captives, the self-insurance vehicles that large firms set up to provide for their own needs.
"Captives are a valuable tool that help to improve risk management and reduce the cost of insurance, but Solvency II would make them more expensive to run and far more bureaucratic," he continued.
"I would urge the EU to return to basics and the original intentions of Solvency II, which was to ensure that insurers are well run, transparent and sufficiently well capitalized for the risks that they carry."
AIRMIC, which represents more than 900 risk managers and insurance buyers, concluded by stressing it supported a recent call for a review of Solvency II from the Confederation of European Insurers, which warned that the current Solvency II proposals would have harmful economic consequences.