The FSA is proposing new rules that will require greater disclosure by insurers of their use of financial reinsurance.
David Strachan, the FSA's sector leader for insurance, said: "The FSA has been examining the use of financial reinsurance for some time. Whilst there can be perfectly legitimate reasons for its use, this should be properly disclosed.
"The proposed rules will provide greater clarity about firms' use of financial reinsurance.
"Our work has identified a small number of contracts that warranted further examination. Where we find firms have made improper use of such contracts or not made a full disclosure of financial reinsurance contracts or arrangements, we will take action."
