Many insurance policies are hard to read and understand because they are badly written and presented, according the UK's financial regulator.

The Financial Services Authority (FSA) warned that some policies for motor, household, critical illness, income protection and other types of general insurance did not properly inform customers of circumstances in which they would be unable to make a claim.

It also said that policies were being sold to people who were over the age limits for some insurance.

The FSA surveyed more than 100 policies and 'Key Facts' documents. In particular it found that some critical illness policies did not specify that customers suffering illnesses which started before they took out the cover could not claim. Others omitted important information such as the cancellation period.

Clive Briault, the FSA's managing director of retail markets, threatened firms who fail to improve their documentation with disciplinary action.

"These findings are worrying. Providing consumers with simple, clear and understandable information about products is a key part of our general insurance regime," he said.

A spokesperson for the Association of British Insurers (ABI) said: "There are few details in Mr Briault's statement but there are clearly challenges for both the industry and the FSA in understanding and communicating these rules."