The FSA is to review Standard Life's accounting procedures and says it will monitor the life office's own strategic review into its mutual status.
Independent experts will investigate the divergence between Standard's most recent calculation of liabilities and earlier figures.
Protracted negotiations between the FSA and Standard over the interpretation of the new realistic reporting rules have concluded with the mutual forced to exclude the anticipated benefits of mutuality and account for guarantees in projections of future returns to its 2.2 million with-profits policyholders.
The FSA has accepted that Standard should retain its regulatory waivers but their value will be reduced to £1bn from the £1.75bn the life office was seeking. Standard says it plans to raise £750m debt to fund future growth.
Standard says a figure for its free-asset ratio is expected on February 18 when it publishes its financial statement.
It has agreed to set aside increased reserves for guarantees and to improve the calculation of its liabilities.
Standard Life chairman Sir Brian Stewart says: “We have spent a number of weeks discussing with the FSA how the new draft regulations impact on Standard Life. These discussions have been intense but we have a conclusion that is satisfactory to both parties.”