New Regulations on Personal Insolvency Practitioners and Approved Intermediaries

Overview

The Insolvency Service of Ireland (ISI) has recently published the Personal Insolvency Act 2012 (Authorisation and Supervision of Personal Insolvency Practitioners) Regulations 2013 and the Personal Insolvency Act 2012 (Authorisation of Approved Intermediaries) Regulations 2013. As well as addressing competency requirements, these Regulations will establish a statutory framework governing the conduct and operational requirements that need to be observed by a Personal Insolvency Practitioner (PIP) or an Approved Intermediary (AI).

Personal Insolvency Practitioner

A solicitor, barrister, qualified accountant and a member of a prescribed accountancy body, a qualified financial advisor or a person who holds a qualification in law, business or finance or other similar qualification to the satisfaction of the Insolvency Service of Ireland may apply to the ISI for authorisation to practice as a PIP. Applicants must also show that they have relevant knowledge or experience and have completed a course and exam on the law and practice relating to personal insolvency.

A prospective PIP shall be independent, competent, capable, and act with honesty and integrity. He or she must also have sound financial affairs and be open and co-operate with the ISI. A prospective PIP must also satisfy the ISI that they have adequate organisational capability and resources, can comply with the Act and the Regulations and is tax compliant.

A PIP is also required to have in place a policy of professional indemnity insurance covering his or her practice as a PIP. The amount insured for each claim shall not be less that €1 million and a minimum of €1.5 million in aggregate.

A personal insolvency practitioner may charge fees for work done and also may recover costs and outlays.

A PIP who also practices as a solicitor or accountant will need to ensure that their internal management systems are operated in such a fashion so as to ensure that there is no conflict of interest, as there is a need to keep each practice area separate.

Approved Intermediary

A natural person and a body corporate may apply to the ISI to perform the functions of an AI. The prospective AI must demonstrate to the satisfaction of the ISI that he or she has relevant training or experience in the provision of financial advices to persons in arrears, is competent for the role and has a clear understanding of the relevant legal, regulatory and financial environment applicable. An AI must also complete a course of study and pass an exam in relation to the law and practice in the State relating to the insolvency of individuals. It is expected that the Mortgage Advice and Budgeting Service (MABS) will carry out such services.

The prescribed application forms to be completed by applicants are contained in the Schedule to each Regulation.