The Government is considering how the “best interests” duty regulations will apply to general insurance products.

But an Australian Securities and Investments Commission (ASIC) consultative paper on the duty is already proposing brokers meet the requirements of a modified regulation.

In this version, a broker would have to undertake a limited number of steps to ensure they act in the client’s best interest.

The paper says brokers would need to warn the client if advice given is based on incomplete or inaccurate information, but would not have to prioritise a client’s interests before giving the advice.

Life insurance advisers will need to meet a fuller version of the duty that will include identifying the objectives, financial situation and needs of the client.

They must also ensure they are qualified to give advice and, if recommending a product, undertake a “reasonable investigation” of the products available.

The adviser must ensure they are not over-servicing the client for financial gain.

But the proposed rules do not ban an adviser from receiving remuneration “from a source other than the client”.

ASIC is looking at governance implications from the best interests duty and the cost of implementing the new rules.

Submissions to ASIC must be made by September 20. It intends to issue regulatory guidelines on the topic by December.

Under the Future of Financial Advice legislation, the best interests duties will be implemented from July 1 next year.