The FSA is undertaking a wide-ranging review of with-profits business, including an examination of surrender values, calculation of bonuses and the smoothing process.
The review will focus on the influence of actuaries as well as how far consumers understand the investments behind with-profits.
But the Consumers' Association says an FSA review will not be sufficient and is calling on the Treasury to set up a public inquiry.
The FSA says it will be working with a wide variety of interested parties and has a “mutually compatible” working relationship with the ABI's Raising Standards Saltr project.
It says a further key objective of the review will be to establish clarity and transparency of the controversial investments.
While the FSA says the timing of the with-profits review is unrelated to pressure over the Equitable debacle, it admits that interested parties are now likely to be more receptive to a review.
FSA spokesman Rob McIvor says: “It is rather like endowments, where a lot of people had no idea how their policies actually work. There is a lot of explaining and educating to do.”
CA senior policy adviser Mick McAteer says: “There are fundamental regulatory problems. Because the FSA is involved in Equitable Life and Axa, an objective view is needed. It would be hard for the FSA to look at itself from the inside.”