For more information, please call the technical advisory service T +44 (0)1908 248250. The technical advisory service includes technical enquiries, ethics advice, money laundering and fraud hotlines. For more information, see icaew.com/tas. More details on professional liability insurance requirements can be found here: Cyber insurance, designed to protect ICAEW members from the specific cyber threats faced by accountants. In recent years, the so-called “cyber silencer” has become increasingly the focus of attention for regulators and insurers. The term reflects regulators` concern that insurers may not fully understand the extent of their cyber exposures in different lines of insurance and, as a result, may not establish appropriate pricing policies for risk management. The Assigned Risk Pool (ARP) exists for companies that cannot obtain coverage in the market. It`s expensive and coverage is often less than you`d like, but that`s because it`s meant to allow businesses to meet the minimum requirements set out in professional liability insurance regulations and guidelines and approved minimum formulations. The ICAEW recognizes that some changes to the minimum approved wording will be necessary to address “cyber silent” as new regulatory requirements for insurers need to clarify the scope of cyber coverage in contract formulation. However, ICAEW also believes that it is crucial for consumer protection that existing coverage for third-party claims related to cybersecurity is maintained. Excluding certain types of third-party claims from coverage could lead to unnecessary complexity and confusion for insured businesses and consumers.
There is also a risk that certain types of claims may no longer be covered, as while many ICAEW companies purchase separate cyber insurance, not all do, as it is not currently a regulatory requirement. In addition, even where cyber policies are in place, there is no guarantee that these typos will be included in these policies, as the scope and extent of coverage under cyber policies may vary. Professional Liability Insurance (IIP) is mandatory for all ICAEW members who have an internship certificate and practice publicly. Compliance with privacy regulations is also a requirement of the audit, bankruptcy, probate and probate rules and the designated professional association (investment firm) manual. The ARP is for companies that cannot obtain PII in the marketplace. It offers emergency coverage for up to two years, but can be expensive. Runoff coverage may also be provided in the CAP if it is not available in the general insurance market. “Claims made” = the insurance policy in effect at the time a claim is first made against the insured or at the time of the declaration of a circumstance that may give rise to a claim. It is not the police that existed at the time of the action that gives rise to the responsibility.
If you need help responding, please contact Sarah-Jane Owen, PII & Regulatory Manager at Sarah-Jane.Owen@icaew.com The proposed amendments respond to a regulatory requirement for insurers to clarify the scope of coverage for cybersecurity claims in insurance policies. The amendments are expected to come into force on September 1, 2021. Remember to purchase “eligible insurance” from a participating insurer (see the Professional Liability Insurance Regulations and Guidelines). Don`t be tempted to go to other insurers. If you have any questions or complaints regarding the ICAEW consultation process, please contact Claire Phillips, PII Committee Secretary at Claire.Phillips@icaew.com It is recommended that the conditions and scope of coverage be equivalent to any previous eligible insurance. You should continue to assess your need for such coverage each year until you are satisfied that there is no way to make a claim. It is recommended that consideration be given to maintaining runoff cover for six years after the end of the practice. In exceptional circumstances, the Privacy Committee may, at its sole discretion, grant an exemption from certain requirements of the Privacy Regulations to allow businesses to purchase coverage that does not fully comply with the requirements of the Privacy Regulations.
The circumstances in which exemptions may be granted are set out in section 5.3 of the Privacy Regulations, and the guidance for the Privacy Committee in deciding requests is set out in Appendix B. We encourage members to review the regulations to understand the process in more detail. There are many things to consider when implementing in practice, including various ICAEW requirements. You need a Certificate of Practice (CP) to provide accounting services (see Statement on Public Practice Practice for a definition of accounting services) and with a PC, you need PII. You must have them before doing any professional work. Sometimes an ICAEW member picks up a PC but doesn`t use it right away. If you do, you must remember to obtain personal information before doing professional work (accounting services). If you receive PII or renew existing coverage, members must ensure that they are purchasing “eligible insurance” and verify the following: If your company is unable to obtain PII in the insurance market, it may apply to be included in the allocated risk pool for up to two years so that it can continue to operate. Section 4 of the PII Rules sets out procedures for firms or members that cannot obtain coverage in the marketplace. This consultation may be of interest to ICAEW members and ICAEW members and regulated entities, participating insurers, insurance brokers, ICAEW regulators and clients of ICAEW members and regulated entities. The audit, insolvency, estate, investment business (PBO Investment Business Handbook) and Certificate of Practice (CP) eligibility requirements require members and firms to comply with the ICAEW PII regulations. PII regulations provide details on the amount of insurance required, insurers and the contract text that insurers must use.
Case Study 1: Company P had made a number of reviews over the years and was looking for a change of insurer at renewal to get a better deal. The current insurance was working on 29 MONTHS 20XX. She signed an application form for the new insurer on 11 MONTHS 20XX. On 22nd MONTH 20XX, the company received a notification of a possible claim and informed its insurer the next working day. No one spoke to the potential new insurer who, although not covering the claim, would have wanted to be informed as part of the application and underwriting process. The company purchased the policy with the new insurer and was not required to provide a list of previous claims based on the insurer of the original application at the next renewal. A few years into the policy, the new insurer became aware of the potential claim, citing these and other notices as reasons for refusing to extend coverage. You must purchase the insurance required by PII regulations from a participating insurer.
These insurers have agreed to comply with the requirements of the minimum contract approved by the ICAEW.
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