Two unnamed with-profits providers have been referred to the FSA's enforcement division for "governance failings".
The FSA says "acute risk to policy holders" was discovered at the firms during the regulator's with-profits regime review in July 2010.
A series of problems were discovered with the firm's with-profits committees. Committees are supposed to scrutinise the running of with-profits regimes on behalf of policyholders and in their best interests.
But a spokesperson for the FSA says committees are failing to challenge practices, or are not properly involved in decision-making.
The regulator says it will now gather more evidence against the firms and assess whether or not there are cases for the firms to answer.
It will then decide if the with-profits providers are to be fined or disciplined in another way.
The spokesperson says it is likely the procedure will take up to a year.
The FSA is currently consulting on a raft of reforms to protect with-profits policy holders.
In a consultation released in February, the regulator suggested restricting when firms can impose market value reductions on with-profits funds, and strengthening requirements for firms to ensure new business will benefit current policy holders.
The paper also outlined proposals to tighten the rules ensuring boards and governing bodies to seek independent advice on fund management, and improve the way firms resolve internal conflicts of interest and distribute excess surplus to policy holders.
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From 6 April 2019