By Julie Steinberg

A Berkshire Hathaway Inc.-backed Italian insurance company was asked to boost its capital, in a sign regulators are prepared to act on the coronavirus pandemic's rippling effects through the industry.

Società Cattolica di Assicurazione - Società Cooperativa, which sells life insurance and other products, said Monday that Italy's insurance regulator had asked it to increase its capital by EUR500 million ($555 million) by the early fall. The request stemmed from its weakened solvency position, the insurer said, a result of financial markets tumbling due to the pandemic.

While many insurers are expecting crimped profits due to the deluge of claims generated by the pandemic, solvency issues haven't generally posed a serious concern yet. The need for more capital could reflect a worse-than-anticipated environment.

Cattolica, in which Warren Buffett's conglomerate has a 9% stake, is listed on the Milan Stock Exchange and recently traded down nearly 19% at EUR3.35.

The insurance regulator said two of the company's life insurance subsidiaries had solvency ratios lower than the regulatory minimum. A solvency ratio is a measure of an insurance company's financial strength.

Cattolica's solvency ratio was 160% at the end of last year, and fell after markets zigzagged due to the pandemic. As of May 22, it measured 122%, down from 147% at the end of March.

The insurer said it has been trying to diversify its holdings in recent years, and had reduced its exposure to Italian government bonds to 55% from 73% in 2016.

Write to Julie Steinberg at julie.steinberg@wsj.com