New ACCA PII Regulations

But they are not the same qualification.

Optional extras for accountans

If you are not responsible for the past exposures but are planning to use the existing trading name of the firm you are purchasing for any period of time, you should ensure this is included within your own policy moving forwards. Your insurers will likely look to apply a retroactive date to the policy for the new firm, which will confirm that no work completed prior to the date in question will be covered. What processes will you need to put in place to review and pick up on any potential problems from past work completed by the purchased firm? If there is an error in past work that is not picked up, and is then replicated in the future, you may find that any claims are split between your insurers and the run-off insurers. Regardless of whether you are the purchaser or the seller, what is important for both parties is for responsibilities to be appropriately understood and agreed upon.

1.3 Long claim tails

Both parties should agree on the date from which responsibility transfers to the purchaser, particularly if completion of work straddles the completion date. It is sensible to build this into the sale agreement – we are often notified of new claims during the first year of run off, brought to light when a fresh pair of eyes reviews past work. In one case, a client picked up on a template error for payroll calculations which spanned several years, including incorrect holiday pay and pension calculations. This resulted in six claim notifications being made under the run-off policy. In the case of another client, the sole trader had passed away suddenly, resulting in a claimant actively trying to pursue a claim against the insured’s family.

How much does it cost?

As you can imagine, this added immensely to the family’s distress. In this case, run-off insurers managed all communications with the claimant to relieve the family of further upset and conclude the claim. Each party should also ensure that the other relevant parties have access to historic files. This ensures that, should a claim arise, they will be able to validate the advice given or provide copy documents or communications. For further information, please visit Lockton’s Accountants page, or contact Catherine Davis, ACCA relationship manager: catherine.davis@lockton.com Chloe Sweet, vice president, on chloe.sweet@lockton.com Lockton is ACCA’s recommended broker for professional indemnity insurance. They have different structures, different typical entry routes, different reputations in different sectors, and different implications for your career internationally.

Why Professional Indemnity Insurance Matters for Accountants

Participating insurers which use a different policy wording must also include a difference in conditions (DIC) clause in the policy and, as an extra safeguard, in the absence of an express DIC clause, it will be deemed to apply. In the event of a dispute between a policy holder and their insurer, the difference in conditions clause should ensure that ICAEW's minimum wording overrides any provision in the insurer's bet uk sports betting sites not on gamstop wording that is less favourable to the insured. All ICAEW compliant policies should include a DIC clause and there is provision in ICAEW’s contract with each insurer for firms to enforce this requirement. If you require further information about this, please call +44 (0)1908 248 250 or use our Live Chat service. ICAEW recommends you take necessary steps to ensure there is no gap in insurance cover which would be a breach of the PII Regulations.

Terms of engagement

Firms have a legal obligation to make a fair presentation of the risk on taking out or renewing cover. Therefore, in order to safeguard the indemnity available for a claim should it arise, it is essential that firms are open and transparent with their insurer/prospective insurer when taking out or renewing cover as to: their claims history and any potential claims (or grounds to suspect a claim - ‘circumstances’); In-depth and complete information should be provided at the outset of the renewal process in an effort to make proposals more attractive to insurers, and to assist in obtaining a timely response from insurers as to whether cover terms will be offered. The duty of fair presentation was introduced by the Insurance Act 2015. The PII Committee recommends that firms prepare early for their renewal and that they take advice from a trusted and reputable broker or other adviser when taking out their insurance. The committee recommends firms discuss their placement strategy with their broker to ensure access to a number of different insurers; specifically, firms may wish to clarify whether their brokers are ‘whole of market’ brokers.

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If firms are unable to obtain a new policy before their current policy expires, they should note that their last insurer is required, under the minimum approved wording, to extend cover for an additional 30 days (see clause D3). There can be a lot to think about when you are deciding to close down a firm, including securing appropriate run-off insurance. Run-off insurance responds to claims for work done while in practice but arising after the practice has ceased. Insurers take a cautious view of insuring firms that advise on or introduce clients to tax mitigation schemes. Section 8 of the guidance, Professional conduct in relation to taxation, gives advice to firms on how they should deal with tax schemes, including if the only involvement is to make introductions to other firms. Choosing the wrong one for your goals costs time and money.

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ICAEW’s engagement letters helpsheet includes material provided by the Tax Faculty for tax practitioners about specialist and ad hoc tax advisory services. T: +44 (0)1908 248 250 E: pii@icaew.com Live Chat Insurance required by the PII regulations must be obtained from a participating insurer. ACA (ICAEW) and ACCA are the two most widely held chartered accountancy qualifications in the UK and Ireland — and the two that candidates most frequently.. ACA (ICAEW) and ACCA are the two most widely held chartered accountancy qualifications in the UK and Ireland — and the two that candidates most frequently compare when deciding which path to take. Both are rigorous, both are respected, and both lead to excellent careers in accounting and finance. This guide gives you an honest, detailed comparison of ACA and ACCA across every dimension that matters for your decision. The ACA is structured across three levels: Certificate Level (6 papers): Accounting, Assurance, Business and Finance, Law, Management Information, Principles of Taxation — all computer-based, on demand Professional Level (6 papers): Audit and Assurance, Business Strategy and Technology, Financial Accounting and Reporting, Financial Management, Tax Compliance, Business Planning: Taxation — written, twice per year Advanced Level (3 papers): Corporate Reporting, Strategic Business Management, Case Study — written, once or twice per year; the most demanding The Advanced Level Case Study is a 4-hour integrated exam that draws on the full ACA syllabus and is widely cited as among the hardest professional accounting exams in the world.

• Online portal submission of insurance certificates is mandatory
• Broker's letter of confirmation is an acceptable temporary proof
• ACCA may conduct random audits of PI insurance documentation
• Record keeping of policies and certificates for at least six years
• Changes in insurer or policy number must be reported promptly

Applied Knowledge (3 papers): BT, MA, FA — computer-based, on demand Applied Skills (6 papers): LW, PM, TX, FR, AA, FM — computer-based (OT or session), 4 windows per year Strategic Professional (4 papers): SBL, SBR + 2 options (AFM/APM/ATX/AAA) — written, 4 sessions per year This is the most common question in the ACA vs ACCA debate, and the honest answer is: both are genuinely difficult, but in different ways.

The Advanced Level — particularly the Case Study — has among the lowest pass rates of any professional accountancy exam The Professional Level is examined via written exams only (no multiple choice at this level) The volume of content across 15 papers is substantial Advanced Level papers are sat infrequently (once or twice per year), meaning a fail is costly in time ACCA is often considered more accessible because: The Applied Knowledge

1. Why accountants are a distinct PI class

The regulations relating to audit, insolvency, probate, investment business and the eligibility requirements for a practising certificate (PC) all require members and firms to comply with ICAEW's PII Regulations. The PII Regulations give details of the amount of insurance required, insurers and the policy wording insurers must use. Qualifying insurance is underwritten in terms of the minimum wording, which is approved by ICAEW. Policies must use this wording or contain a difference in conditions endorsement. ICAEW PII minimum approved policy wording – effective from 1 September 2021 Schedule of amendments to the PII minimum approved policy wording (1 September 2021) Non-members can download an order form to obtain historic copies of ICAEW's minimum approved policy wording.

Can you buy PII insurance directly or do you need a broker?

You must obtain the insurance required by the PII regulations from a participating insurer. These insurers have agreed to meet the requirements of ICAEW's minimum approved policy wording. The fact that an insurer is on the list does not imply that ICAEW has performed independent checks on the insurer's suitability. ICAEW recommends that you investigate the current ratings and discuss with your brokers the suitability of these insurers when you take out or renew your insurance. When obtaining PII or renewing existing cover, you should ensure you arrange qualifying insurance and check the following: The insurer is on the list of the current list of participating insurers (and if the insurance is provided by more than one insurer, that all insurers are participating).

Understanding professional indemnity insurance (PII)

The cover meets the minimum limits of indemnity set out in ICAEW’s PII Regulations. The policy provides cover which meets ICAEW’s approved minimum wording and includes at least six years’ retroactive cover (ie, cover for claims arising in relation to advice, services and business activities carried out during the last six years). Please also remember to check that the policy complies with ICAEW's updated requirements that took effect in September 2024. All participating insurers have agreed to provide cover under terms that match those of ICAEW's approved minimum wording. Many insurers use their own policy wording and, in some instances, this will include extensions of cover beyond the cover that is required under the minimum wording. and Applied Skills levels include computer-based OT formats which some candidates find more manageable than pure written exams More frequent exam sittings (quarterly) reduce the impact of an individual failure The Strategic Professional level has a broader range of paper choices (two option papers from four) The key difference is structure: ACA bundles more content into fewer, longer, harder exams; ACCA spreads similar content across more papers with shorter, more frequent sittings.

• Financial penalty for non-compliance can be up to £5,000
• Suspension of membership is a potential consequence
• ACCA's Professional Standards Department monitors compliance
• Members must notify ACCA of any material change in cover
• Breach of requirement is considered misconduct