The Institute draws the attention of members and firms to proposed changes to the Institute’s PII requirements. PII arrangements are developed jointly by the Institute, the Institute of Chartered Accountants in England and Wales (ICAEW) and the Institute of Chartered Accountants of Scotland, and the three chartered bodies have participated in a review of these joint PII arrangements, led by ICAEW.
Institute members and firms will be aware of this review, which included a public consultation that members and firms were invited to participate in. The main proposed changes to the PII requirements which are being considered by the Institute’s Professional Standards Board following that review, are:
- The minimum limit of indemnity will increase from £1.5m to £2m.
- For firms with a gross fee income which is below £800,000, the minimum limit will be two and a half times the firm’s gross fee income, subject to a minimum of £250,000 (this is an increase from £100,000).
- Larger firms with gross fee income over £50m will not be required to put in place ‘qualifying insurance’ but must have in place appropriate arrangements which will be monitored. (Currently this approach is available to firms with 50+ principals.)
- For firms that will be required to put qualifying insurance in place, the maximum aggregate excess should not exceed the higher of £3,000 or 3% of a firm’s gross fee income.
(And euro equivalents).
The Institute’s current PII requirements are set out in Chapter 7 of the Public Practice Regulations. Any decided changes to the Institute’s PII requirements will be reflected in updated versions of same, which will be made available to members and firms through the usual channels in due course. However, as the principles have the support of the Professional Standards Board, in the interest of giving Institute members and firms timely notice of these proposed changes we are providing you with this information at this stage.
If approved, the changes are likely to be effective from 1 September 2024, and apply to policies taken out or renewed from that date. Institute members and firms may wish to check with your PII provider whether any of the proposed changes will impact your policy, and ensure you leave sufficient time to prepare for your renewal this year.
Members or firms who have any queries in relation to these proposed changes can contact the Institute at professionalstandards@charteredaccountants.ie.
Further information on the review of the PII arrangements is available on the ICAEW website here.
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