The Institute of Chartered Accountants in England and Wales (ICAEW) Regulatory Board issued a consultation last year and the IUA submitted views from its member companies. We supported plans to increase minimum limits of cover to £2million and give smaller firms more flexibility in the minimum limits of cover that they can purchase. The IUA also backed proposals to link cover to the fee income of a firm rather than the number of partners it has.
However, our consultation response strongly disagreed with suggestions that ICAEW firms should have non-cancellable run-off cover of six years. This would mean insurers could still be forced to cover risks regardless of whether or not a company paid their policy premium. In addition, the IUA criticised proposals for insurers to pay claims without guarantees that they will receive any policy excess payments due. Both these plans would have had a significant impact on the availability and affordability of insurance for many accountants, especially smaller firms.
Now a revised set of proposals has been published by the ICAEW in a statement that highlights the IUA’s consultation response. Under new plans, both an extension of non-cancellable run-off cover and insurers meeting unpaid excess have been withdrawn.
Chris Jones, Director of Legal, Underwriting and Claims at the IUA said: “IUA member companies underwrite a significant majority of professional indemnity insurance cover for accountants, auditors and other professionals subject to ICAEW regulation.
“We were pleased to participate in this review and strongly support its broad aims of providing clarity on what compliant insurance for accountants look like and to ensure appropriate liability protections are retained.
“The revised proposals will benefit firms and consumers. They are thoughtfully constructed to prevent both a reduction in the number of insurers providing cover and ensure that insurance premiums continue to be a reasonable cost for accountants.”
The new ICAEW regulations on professional indemnity insurance will be in place from 1 September 2024.
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