INSOLVENCY Citation, commencement and extent 1 1 These Regulations may be cited as the Insolvency Practitioners (Amendment and Transitional Provisions) Regulations 2024 and come into force on 1st December 2024. 2 These Regulations extend to Great Britain. Amendment of the Insolvency Practitioners Regulations 2005 2 1 Schedule 2 (requirements for security or caution and related matters) to the Insolvency Practitioners Regulations 2005 is amended as follows 2 In paragraph 1 (interpretation), in the appropriate places, insert the following definitions— “ relevant losses ” means the losses referred to in paragraph 3(1)(b); “ SPS indemnity period ” has the meaning given in paragraph 3(3)(c) . 3 In paragraph 3(1)(c), for “paragraphs 4 to 8” substitute “paragraphs 4 to 8ZD” . 4 In paragraph 3(2), for paragraph (a) substitute— a that claims in respect of relevant losses will be paid up to an aggregate maximum sum for each case where the insolvency practitioner acts (“the specific penalty sum”), together with interest on relevant losses calculated at a rate above the Sterling Overnight Index Average; . 5 In paragraph 3(2), for paragraph (b) substitute— b that claims in respect of relevant losses, together with interest, will be paid out of a further sum of £750,000 (“the general penalty sum”) if— i a specific penalty sum is not in force in relation to a case, or ii any amounts payable under a specific penalty sum are insufficient to meet all claims arising out of a case; . 6 In paragraph 3(2)(e), for “losses of the kind mentioned in sub-paragraph (1)” substitute “relevant losses” . 7 In paragraph 3(2), after paragraph (e), insert— f for the payment of the following costs and expenses reasonably incurred or charged by the successor insolvency practitioner— i the costs and expenses of investigating the suspected fraud or dishonesty; ii the costs and expenses of making a claim under the bond, including costs incurred in providing documents or evidence or responding to requests for further information; iii the costs and expenses of obtaining expert advice (including legal advice) in relation to a claim or potential claim under the bond; iv the costs and expenses of administering the insolvent estate, which duplicate costs incurred or charged by an insolvency practitioner before the successor insolvency practitioner’s appointment to act in the relevant case. . 8 In paragraph 3(3), omit the “and” after paragraph (a). 9 In paragraph 3(3)(b), at the end insert, “, provided the time limit satisfies the requirements of paragraph 8ZA (minimum run-off period); and” . 10 In paragraph 3(3), after paragraph (b), insert— c for a limit on the surety or cautioner’s liability under the specific penalty sum by reference to a specified period of time (“the SPS indemnity period”) during which the relevant losses may arise following the insolvency practitioner’s appointment to act in a case, subject to paragraphs 8ZC (minimum SPS indemnity period) and 8ZD (notification of expiry). . 11 After paragraph 8, insert— Minimum run-off period 8ZA 1 The terms of the bond must provide a minimum period of two years during which a claim may be made in respect of relevant losses in a case. 2 This period must begin with the date on which the insolvency practitioner is released or discharged in that case. 3 The reference to “ released or discharged in that case ” includes the insolvency practitioner being released or discharged from office in a subsequent capacity in that case. 4 Where the insolvency practitioner holds office in a subsequent capacity in that case, the period must begin with the date of release or discharge from that office. Interest period 8ZB The interest referred to in paragraph 3(2)(a) is calculated from the date of the relevant loss to the date of payment of the claim for that loss. Minimum SPS indemnity period 8ZC 1 The length of any SPS indemnity period must be no less than 6 years beginning with the date of the insolvency practitioner’s appointment to act in a case, provided the SPS indemnity period can be extended for further periods with the consent of the surety or cautioner. 2 Where the surety or cautioner is asked to give its consent, such consent must not be unreasonably withheld, but may be given subject to reasonable conditions, including payment of an additional premium. Notification of expiry 8ZD 1 The surety or cautioner must deliver a notice to the insolvency practitioner and their authorising body no less than 60 days before the date on which any security or caution under a specific penalty sum is due to expire or otherwise cease to have effect for a reason other than the insolvency practitioner’s release or discharge in a case. 2 The notice must be in writing or in electronic form and contain the following information: a the date the specific penalty sum is due to expire or otherwise cease to have effect; b whether the surety or cautioner is willing to agree to an extension or renewal of the specific penalty sum; and c details of any conditions attached to the extension or renewal, such as the payment of an additional premium. 3 The specific penalty sum will continue in force until such date as the surety or cautioner has complied with this paragraph, unless otherwise agreed by the parties to the bond. . Transitional and savings provisions 3 1 Subject to paragraphs (2) to (3), the amendments made by these Regulations do not apply to a bond issued by the surety or cautioner before 1 January 2026 as it relates to a case in respect of which an insolvency practitioner was appointed before 1 January 2026. 2 Where the Secretary of State determines an application for approval of a form of a bond during the transitional period, the Secretary of State may treat the form of bond as complying with paragraph 3 of Schedule 2 to the Insolvency Practitioners Regulations 2005 if the bond complies with the Insolvency Practitioners Regulations 2005— a as those Regulations had effect immediately before 1st December 2024, or b with the amendments made by regulation 2. 3 In this regulation— a “appointed includes appointment in a subsequent capacity if the insolvency practitioner was appointed in an initial capacity in that case before 1 January 2026. b “transitional period means the period beginning with 1st December 2024 and ending with 31 December 2025. Justin Madders Parliamentary Under-Secretary of State 30th October 2024 Department for Business and Trade