It found that opt-out selling often resulted in consumers purchasing an insurance product they did not need. Opt-out selling is the practice of defaulting consumers into buying a product, which they then have to opt out of, for example by using pre-ticked boxes to sell the consumer add-on insurance.
Some consumers were not even aware they had bought an add-on. The findings came following a market study into the general insurance add-ons industry last year.
Officials said too often consumers have not been able to make an informed decision on whether they needed or wanted the insurance that was part of the opt-out package. The FCA will consult with the industry on the proposals, which also include introducing guidance for firms so they can give consumers information about add-ons at the right time in the sales process.

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Christopher Woolard, director of strategy and competition, said: "This is about ensuring consumers can make the right decision on what add-on insurance they do or don't need. Forgetting to un-tick a box at the end of a purchase is not making an informed choice.
"Our work shows that the opt-out model means too often consumers are buying a product when they have not been able to give any thought to whether or not they need it. We are all familiar with having to double check whether or not we have accidently agreed to buy an add-on insurance product when buying car insurance or tickets online for example.
"These proposals will mean that consumers will be in a better position to decide what they want and consider the options available to them. Fewer consumers will end up with products they didn't want or don't even know they own."
The ban would apply to any add-on sales of regulated or unregulated products offered alongside financial primary products.
This includes legal expenses sold with home insurance, breakdown or key cover sold alongside motor insurance, or protection cover when taking out a mortgage or credit card.
The FCA also wants firms to provide consumers with more appropriate and timely information that will allow them to make an informed choice on what, if any add-on products they need, and to identify the best package.
The guidance encourages firms to introduce the most common add-ons to consumers earlier in the sales process and make it easier to compare packages of the primary product and add-ons.
The FCA also recommended that firms give the annual price of add-ons rather than relying on monthly figures so that overall price to be paid is easily understood.
The consultation period ends on 25 June 2015.