Insulate (or not) 8" liner for indoor chimney

[mrmario]

We're installing a see-through (tunnel) wood cast-iron insert into an existing brick fireplace. It has a masonry chimney that goes in the middle of our living room about 23ft up to the roof (so most of the masonry is actually indoors). Chimney opening throughout the entire length is 13" and lined with ceramic and has a small elbow in the middle (so can't really run a rigid liner).

The stainless liner is supposed to be 8" according to the manufacturer. My installer tells me that we don't need to insulate the liner as it's technically indoors. Is this actually true and not any code violation?

Any recommendations here? I'm not trying to avoid extra insulation cost but just wondering what would be a better solution. We're also supposed to have an intake register below the insert and then a register (exhaust) higher up above for convective air circulation and maybe uninsulated steel liner would work better for that?

 

[begreen]

Code has to do with the clearances of the chimney structure from combustibles, all the way up through the roof. For an interior chimney, this needs to be 2", and 1" for an exterior chimney.

What is the make and model of the insert?

 

[mrmario]

I think clearances are fine as my GC looked over and talked to an inspector.
The chimney is brick/cinder blocks all masonry and outside there's only metal framing with fire-retardant drywall. I guess what i'm struggling with is whether a) insulation is necessary for 8" liner in 13x13 ceramic flue and b) whether it's better to have (or not) insulation if want to have convective heating around the insert
It's a European manufacturer, I think Kratki or something like that.
tks