The Insurance Mediation Directive (IMD) may be one of several EU Directives reassessed in a wider Government push for deregulation of the business sector.
Speaking at the CBI conference Gordon Brown, Chancellor of the Exchequer, announced an audit of existing legislation to strip back the UK legislative "gold-plating" of EU regulation.
Industry bodies Biba and the ABI said there could be implications for the insurance industry but would wait to determine how the audit would link in with the FSA's effectiveness review in April 2006.
Biba regulation and compliance manager Steve White welcomed any review of the effectiveness.
But he said he was resistant to the scaling back of current FSA regulation, as the IMD and the Distance Marketing Directived "did not have that much gold-plating to cut".
Airmic welcomed the review saying the IMD debate two years ago was an example of how gold-plating was disadvantageous to the industry.
A spokesman said: "The problems we had with IMD have largely been resolved.
"But had these changes been introduced two years ago it could have potentially saved us a lot of time and money."