The FSC is against removing the claims handling exclusion from financial services, while it assesses progress under the life code of practice, CEO Sally Loane says.

Ms Loane says ending the exemption could mean claims assessors would be viewed as giving personal advice, and lead to new training and other requirements, and the change could be like “using a sledge-hammer to crack a nut”.

The current version of the code, and particularly a proposed new version, aims to address the issues, she says.

“We would like to see if that code is producing those better outcomes. The code is quite new,” she says.

The next version of the code will also aim to stop the type of direct sales approaches that had been highlighted by evidence given to the royal commission, Ms Loane says.

The FSC is also reviewing information from ASIC, which had highlighted high lapse rates and continuing high-pressure tactics.

The next version will extend to distributors of life insurance, she says, after Ms Orr highlights the current iteration does not apply to companies such as Freedom Insurance.