ICAEW’s PII Committee oversees the PII requirements placed on its members and firms. As well as keeping ICAEW’s policy on compulsory PII under review, the committee monitors compliance with the PII Regulations, and considers revisions to the regulations and minimum approved wording.
“We’re responsible for the PII rules that accountants in public practice have to comply with to create a safety net of insurance protection, and for monitoring how effective and practical these rules are in the market,” says James Roberts, Chair of the PII Committee and Head of the Accountants Team at law firm Clyde and Co.
“Part of that oversight of PII is a series of arrangements with ‘participating insurers’, who sign up to terms and conditions to ensure they participate in our insurance measures in the intended way,” explains James.
Another aspect of the committee’s work is to oversee the Assigned Risk Pool (ARP), which is the insurance fund of last resort for firms unable to buy cover in the commercial market.
To help the committee stay abreast of market developments, James, in his capacity as chair, and representatives from ICAEW’s PII team, also meet with some of the leading ‘participating insurers’ twice a year to discuss trends or any issues or problems.
Two other key committee responsibilities are:
- considering individual requests by firms for dispensations where they consider they are unable to comply with the full range of the PII requirements; and
- nominating ICAEW’s representatives on the Joint Professional Indemnity Insurance Committee and Joint Advisory Panel.
The committee also liaises closely with its equivalent committees within the Scottish and Irish institutes. “The regime is very similar for the different nations,” says James. “We share the minimum wording and firms from all three institutes can access the ARP.”
Different perspectives
The PII Committee must have at least four members (a mix of lay and accountant) and its quorum is three. Members are appointed by the Regulatory and Conduct Appointments Committee (RACAC) for terms of three years, which may be renewed once and further extended at RACAC’s discretion.
Currently the committee has nine members. “We’re nine people whose experience of interacting with insurance comes from different perspectives,” says James. “As you would expect, we have members from differently configured accountancy practices, and that’s invaluable to give a real view of what life is like.”
“And then we have representatives from insurance brokers and insurers, as well as three lawyers of which I'm one, who deal on a day-to-day basis with insurance matters and the type of insurance disputes that arise, including those that accountants can get caught up in.”
“We’re trying to bring together those various different perspectives because we think all of those views have to be considered and heard to ensure we continue to have viable PII arrangements for the benefit of the public.”“If you create something that looks good on paper from one perspective only, it’s not going to withstand contact with reality for very long,” he stresses. “So, we hope the range of views on the committee helps us to recognise when scenarios that may seem ideal might not be deliverable in practice.”
Work in practice
The full PII Committee normally meets four times a year, either virtually or at Chartered Accountants’ Hall in London.
“Before COVID, all of those full meetings were in person,” explains James. “But we’re now settling into a new pattern, and we’re currently envisaging one or two of the meetings will be in person and the rest will be online.”
“That combination does work quite well for us,” he says. “And one of the other things we have done over the last couple of years is to introduce additional monthly casework meetings to consider any dispensation applications that need to be dealt with outside of the full committee meetings.”
“Those monthly meetings work well when they're online,” he adds. “And they give us that greater opportunity and flexibility to deal with issues as and when they arise.”
“We do, however, still value the opportunities to come together in person, because it always adds that little extra something to proceedings.”
Heading off problems
One of the key reasons James became involved with the committee was to contribute to ensuring ICAEW’s PII regime works for firms, clients, insurers, and the wider public.
“My day job is as a defence lawyer defending accountants and dealing with insurance issues from a disputes point of view,” he explains. “And, in that role, you start to think that there ought to be a better way: a way of preventing something from ending up in the state it is in when we get to see it.”
“And I think all of us, as committee members, naturally ask ourselves when we see things that have gone wrong: how can we help to create something that will head off these types of problems?”
“Very often in life, it’s that preventative aspect that is the greater challenge,” he says. “And for me, my work on the committee absolutely speaks to that challenge.”
Rising to the challenge
One of the committee’s most challenging and important pieces of work last year was its involvement in drafting and consulting upon revisions to the PII Regulations.
“The key reason we did this was to review and update some of the rules, so they reflect the modern profession and deliver the intended protection for users of accountancy services,” says James.
After the consultation, which received 134 responses, the IRB decided to take many of the initial proposals forward but withdraw a few based on feedback from the consultation and market data available.
In line with committee’s wider approach, the resulting changes are designed to ensure the PII regime continues to protect the public, while also being realistically deliverable in the market.
“We did not consider it would support the public interest to make changes that would reduce the number of participating insurers or would adversely affect the availability or cost of insurance,” says James. “The proposals being adopted will likely benefit both firms and consumers.”
The revised PII Regulations have been published on ICAEW’s website and will come into effect on 1 September 2024.
Find out more about the key changes, and the consultation results.
If you are interested in joining the PII Committee, please email CommitteeRecruitment@icaew.com.
