Online price comparison websites could be misleading customers and leaving them without valid insurance, the Financial Services Authority (FSA) has warned.
The FSA voiced concerns that some websites might be offering insurance services or activities they are not authorised to.
This would leave customers without valid insurance products, it warned.
Currently customers can purchase car insurance and other types of cover online, but the FSA said that if sites are advising, introducing or arranging products they must reconsider whether they need to change their permission to operate.
Firms have until August 8 to respond to the guidance from the regulator.
The concerns were initially raised after an investigation by the FSA between June and September last year. It found that some websites could be seen as offering customers advice by flagging up "top rated" products.
It also warned that some consumers may think they were being given a quote based on their individual circumstances, rather than a generic quote.
The regulator also stressed that firms should take responsibility for checking that consumers are eligible for products and had disclosed all relevant information, to ensure that claims are not turned down in the future.