General insurance brokers will be required to satisfy only basic best-interests obligations, under a bill amending the Future of Financial Advice (FOFA) legislation.

The change will clarify existing legislation for brokers, according to the Federal Government. It will also apply to brokers selling insurance while acting for banks and credit unions.

Further amendments for the general insurance industry include an exemption for volume fees on platforms if products are offered under custodial arrangements.

Assistant Treasurer Arthur Sinodinos says the bill – now open for consultation – is designed to expand affordable and accessible advice.

“Delivering on the Coalition’s election commitment, the Government has released draft legislation and regulations to reduce compliance costs and remove red tape on the financial services industry,” he said.

“The Government is supportive of the principles of FOFA, but the previous Government’s reforms are unwieldy, burdensome and unnecessarily complex. The proposed reforms will reduce the burden on industry and pressures on the cost of advice to consumers.”

The consultation is open until February 19. The amendment will be introduced to Parliament in the autumn sitting period, with passage scheduled for the winter sitting.