In Australia under the Queensland law act where I live, I am not allowed to modify my XT660X at all, it is a learner legal motor cycle. That means no exhausts no filters ETC.
As far as insurance goes I never told mine when I had the 700 kit on my bike, as it is impossible to tell that I had a 700 cylinder except for the custom made cam cover which one does not have to fit. These cylinders have no markings on them stating CC.