The Insurance Council of Australia has backed advice law changes that “enhance the quality” of customer engagement, as the federal government prepares its next tranche of reforms.

The government is expected to soon release draft legislation allowing the industry to provide simple advice.

“We are supportive in principle of proposals that would have the potential to enhance the quality of interactions between insurers and consumers,” an ICA spokesperson told insuranceNEWS.com.au today. “Our experience is that the current regulatory regime unnecessarily constrains the ability of insurers to provide product advice tailored to a customer’s specific query or circumstances.”

ICA backed the simple advice plan when it was announced last year, when Financial Services Minister Stephen Jones outlined the government’s response to the Quality of Advice Review.

The draft bill is expected to offer more details on how the simple advice concept will work.  

The government has so far said only that a new class of adviser will be trained to provide simple advice. They will generally be employees of insurers and other financial services institutions, and they cannot charge fees or commission.

Under current laws, general and life insurers are allowed to provide general advice only.