The Insurance Council of Australia (ICA) has proposed further changes to deferred sales model draft regulations, arguing rules hammered out after previous consultations are still unnecessarily sweeping up business clients and posing problems for buyers of boats and livestock.

ICA has lodged a submission to Treasury seeking changes to regulations attached to the new regime, which is due to take effect in about six weeks.

Regulations released for consultation exempt business-related add-on products from the regime when the premium exceeds $40,000, but ICA says the threshold is far too high.

ICA says Hayne royal commission recommendations on deferred sales of add-on insurance are aimed at protecting everyday consumers from high-pressure sales, and exemptions should apply to products provided to businesses as wholesale clients.

“[Hayne] makes no mention of concerns regarding the sale of add-on insurance to persons carrying on a business and, in our opinion, the recommendation should not be interpreted as extending to those persons,” ICA says.

The submission suggests regulation wording amendments to focus on retail clients, or alternatively proposes reducing the $40,000 threshold to $5000.

ICA also says the regulations need to extend a home and contents exclusion to also include contents only, third party property damage cover for boats should be excluded, in line with the approach for cars, and it calls for transport and delivery insurance exemptions to include temporary storage.

An additional exemption should be made for add-on livestock insurance, ICA proposes, as the product’s cover extends beyond transport and delivery and falls through the cracks of other exemption criteria.

“The risks that livestock insurance is designed to protect arise immediately upon completion of the sale of the livestock, ie the fall of the hammer,” it says. “If a consumer is unable to obtain livestock insurance at that point, they will become exposed to an uninsured loss.”

Treasury released the draft regulations for feedback last month, with the deferred sales model for add-on insurance set to start on October 5.