The Insurance Council of Australia (ICA) says proposed amendments to the Future of Financial Advice legislation lack clarity on the scope of advice.

In a submission to the Senate committee reviewing the amendment bill, CEO Rob Whelan says general insurers do not have the certainty needed to incorporate scaled advice into their business models.

ICA has had “long-standing concerns” there is insufficient clarity on agreements to limit the scope of advice.

Mr Whelan says this should not be disregarded by the regulator or dispute resolution bodies.

ICA wants the amendments changed to reassure insurers that clients and advisers can agree on the scope of advice to be provided.

Mr Whelan argues the catch-all provision of the best-interests duty can disadvantage advisers in consumer credit insurance, because this sometimes includes life insurance features.

The provision should be removed because it creates “significant legal uncertainty and renders the safe harbour unworkable for financial service providers because of its open-ended nature”.

The amendments should spell out the short form of the best-interests duty applicable to general insurance products in the Corporations Act, ICA says.

It wants the current basic banking exemption from the ban on conflicted remuneration expanded to include consumer credit insurance products.