Changes to CPA Australia’s By-law 9.8 Professional Indemnity Insurance (PII) will take effect from 8 October 2017.
As a result, for members in public practice:
- any PII policy must be underwritten by an APRA Authorised General Insurer unless otherwise approved by CPA Australia
- the minimum PII requirements are being reworded
- any policy issued on or after the 8 October must be cost exclusive (for the majority of practitioners this is already standard practice)
- the retroactive date has changed from being unlimited to a retroactive date of no later than seven years before the beginning of the period of insurance
- the policy must include coverage of directors and officers of any approved practice entity of which the member is affiliated (this is already the case but the provisions have been reworded)
- Multiple automatic reinstatements following a claim have been replaced by one or more automatic reinstatements following a claim
- after a member ceases to provide public accounting services, or ceases to practice, or retires, or the member’s’ approved practice entity merges with another entity, the member must ensure they maintain a PII policy for a period of not less than seven years where the member’s liability for the provision of public accounting services provided will not otherwise be covered by a future policy.
It is important to note that there are no changes to the existing minimum levels of PII to be held by members.
A recent live chat provided the opportunity to ask questions about these changes and the minimum PII requirements.