It is clearly listed in irc chapter 10 I am in the field now and don't know the specific code number but it is there. And for the record without that clearance your chimney was not code compliant before. The existence and or condition of the old clay has nothing to do with it.Could you reference such code so I can read it myself? Seems strange I would need insulation with the chimney flue intact.
Perhaps it would draft better. But as of now I can have a smokey fire going and it wont leak smoke in the room.
And as far as draft the lack of smoke is a good start but does not mean it is working as well as it should