Insolvency Service as oversight regulator of the insolvency profession: in detail.
Published 17 February 2017
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1. Approach to oversight regulation
The overarching aim is to ensure that those affected by the work of insolvency practitioners have confidence that the regulatory regime encourages best practice and deals effectively and consistently with any poor performance or misconduct.
The Insolvency Service has published guidance to assist in the RPBs compliance with the regulatory objectives.
The RPBs are recognised as bodies which authorise and regulate insolvency practitioners as set out in the Insolvency Act 1986. The Secretary of State can remove an RPB if they are found to no longer be ‘fit’. The Small Business Enterprise and Employment Act 2015 introduced a range of more proportionate oversight sanctions into the Insolvency Act 1986, which will enable the Secretary of State to:
- direct a RPB to take action or to refrain from taking a particular course of action
- impose a financial penalty on RPB
- issue a reprimand to RPB
- apply to court to directly sanction an insolvency practitioner, where it is in the public interest to do so
The Insolvency Service engage with a number of wider regulatory forums including the Joint Insolvency Committee, IVA Standing Committee, Meeting of Monitors, SIP Working Groups, Pre Pack pool oversight group and anti money laundering supervisors forum.
2. Monitoring
Monitoring covers a range of activities, which can include visits to the RPBs, observation of RPBs visits to insolvency practitioners and committees, gathering of intelligence and themed reviews of cross cutting issues.
It is undertaken to satisfy the Insolvency Service that the RPBs continue to meet certain legal requirements:
- that they regulate their insolvency practitioner members to ensure that they are fit and proper persons
- that the persons whom they authorise to act as insolvency practitioners meet acceptable requirements as to education, practical training and experience
- that they comply with regulatory objectives
More generally, the purpose of monitoring the RPBs is to ensure that an effective and proportionate approach to regulation of the insolvency practitioners is being used. Monitoring findings are used to encourage best regulatory practice and to assess compliance with the regulatory objectives.
Monitoring will be carried out in a way which, whenever possible, keeps the burden on the RPBs to a minimum and the ‘collect once, use many times principle’ will be applied.
The Insolvency Service aims to use a risk-based monitoring approach. This could include monitoring targeted to particular RPBs, specific areas of concern or reviews across all the bodies.
3. Complaints
Complaints about insolvency practitioners should be directed to the Complaints Gateway. The role of the RPB will be to investigate any complaints referred to them by the Gateway and issue sanctions against insolvency practitioners where appropriate. The complaints process however does not provide any mechanism of redress for the complainant.
The Insolvency Service has agreed RPB-developed common sanctions guidance which assists the regulators when determining disciplinary outcomes for misconduct offences. The RPBs have developed common reviewers of complaints over the past year. Any complaints received after 1st January 2017 which have a request for a reviewer will be dealt with by this common panel.
If you are unhappy with the way in which an RPB has handled your complaint, you can make a complaint to Insolvency Practitioner Regulation Section. Any complaint should be made in writing to IP Regulation Section, The Insolvency Service, 4 Abbey Orchard Street, London, SW1P 2HT or by email to IPRegulation.Section@insolvency.gsi.gov.uk.
We will not generally intervene directly in an on-going complaint about an insolvency practitioner or compel either the practitioner or the regulator concerned to take a particular course of action.
Any complaints about Insolvency Practitioner Regulation Section can be made in accordance with the Insolvency Service’s complaints procedure.
4. What we publish
The Insolvency Service publishes
- an Annual Review of IP Regulation which includes data and information about regulatory action and monitoring activity, including Complaints Gateway statistics.
- monitoring reports if we visit an RPB or conduct a cross cutting themed review and focus on an area of topical interest or where we are seeking to develop some changes.
- all sanctions handed down by RPBs to insolvency practitioners for 12 months.
There is also a helpful portal with advice for Insolvency Practitioners.
5. Funding of oversight regulation
The Insolvency Service funds its oversight regulation through a levy on the authorising bodies, which in turn it passes on to the Insolvency Practitioner members. The current levy is £360 per Insolvency Practitioner as set out in the Fees Order 2015.
The cost of operating the Complaints Gateway is recovered under the provisions of a Memorandum of Understanding agreed by the authorising bodies. This cost is currently set at £40 per Insolvency Practitioner and is reviewed periodically in accordance with the terms of the agreement.