The Financial Planning Association (FPA) has criticised the proposed life insurance code of conduct for being too complex and ignoring the role of financial advisers.

In a submission to the Financial Services Council (FSC), the FPA calls for the code to be simplified.

“Complicated legalistic tones will not assist consumers to understand how life companies complying with the code benefits them,” the submission says. “It should enable both consumers and financial advisers to understand which companies adhere to higher protections, particularly given the recent scrutiny of their behaviour.”

It says the FSC should look to the Australian Securities and Investments Commission’s work on statements of advice as an example of simplifying language in consumer documents.

The submission recommends “a simplified message of some 10-15 key principles that life company members will adopt to improve the consumer experience of acquiring, owning and claiming against life insurance products”.

The FPA also wants an executive summary to spell out how the code will establish higher standards for life insurers than general law.

It criticises the code’s failure to identify the role financial advisers play in “assisting consumers to acquire and transact life insurance products in the consumer’s best interest”.

The submission adds: “[The FSC] has also excluded an intermediary-facing standard for life companies from the scope of this document.

“We would strongly urge the FSC to consider the development of such a standard in conjunction with the present document and in time for the timetable for the proposed commencement of the life insurance framework legislation in July 2017.”

The code’s use of various terms to describe financial advisers is also questioned. Throughout the document advisers are described as “financial adviser, financial planner, financial adviser/planner, authorised representative, representative and staff”, the FPA says.

“The draft should abandon the use of outmoded sales and distribution language in favour of a professional advisory services model and terminology for life insurance intermediaries.”

The FPA also wants group life insurance covered by the code, and says the FSC should encourage superannuation fund trustees to sign up.

The code lacks information around monitoring and supervision obligations, and penalties for insurers breaching the code are not tough enough, the association says.

“We are encouraged the FSC has made some progress on the code, but remain disappointed that more hasn’t been done to address the issues we highlighted in January.

“We look forward to seeing our concerns addressed and are willing to provide further assistance to the FSC on the related suggestions.”