Six life insurance firms are being investigated by the City regulator after evidence of poor practice was uncovered during a review of the treatment of long-standing customers.
Abbey Life, Countrywide, Old Mutual, Police Mutual, Prudential and Scottish Widows are being investigated to determine whether they failed to meet standards and see if further action is needed, the Financial Conduct Authority (FCA) said.
The regulator said it will also take steps to improve firms' behaviour generally, with plans to reach a voluntary industry solution to capping or removing some charges.
The announcements were made in the FCA's findings from a review of the fair treatment of "closed-book" customers, who have been with their firm for some time and whose policies are no longer being actively marketed.
The FCA looked at fees for exiting policies as well as paid-up fees, where customers stop paying premiums but are still in the policy. These are the fees it is proposing to cap or remove under a voluntary agreement.
It considered whether closed-book customers can move from products in a fair and reasonable way and whether they receive clear and timely communications.
The review focused on how customers are being treated now, not how the policies were sold in the first place.
The review looked at 11 firms and found a "mixed picture", with most showing good practice in one or more areas and poor practice in other areas.
The impact exit fees and paid-up charges can have on returns can be "significant" and may be a barrier to customers shopping around, it said.
The FCA is concerned that where exit or paid-up charges were applied, some customers may not have been informed at the time.
The regulator said it is not possible at this stage to draw conclusions on the reasons for such practices, or to say whether customers suffered detriment.
For all six firms being investigated, the FCA will focus on the disclosure of exit and paid-up charges after December 2008.
The regulator emphasised that no conclusion has been reached on whether there have been any breaches of regulatory requirements.
It said the probe should not be taken to indicate there will necessarily be disciplinary action against the firms, or that a penalty will be imposed or redress payable.
Tracey McDermott, acting chief executive of the FCA, said: "We expect all firms with closed-book customers to take into account the findings we have published today and ensure they are treating their closed-book customers fairly.
"The practices at some firms appear to have been poor. We have particular concerns regarding how some firms communicated with their customers about exit and/or paid-up charges.
"We are now doing further work to understand the reasons for these practices, whether customers may have suffered detriment as a result and if so, how widespread these issues are."
Hugh Savill, director of regulation at the Association of British Insurers (ABI), said the review raises "serious issues".
He added: "However it should be noted that products sold today bear little resemblance to those described by the report.
"The long-term savings industry is now modernising and focused on serving its customers, through auto-enrolment pension products or helping them make the most of the new pension freedoms."