Insolvency Code of Practice (Revised 2020)

Summary

This Code, issued by the BVI Financial Services Commission under section 487 of the Insolvency Act, sets out the standards and guidelines that apply to individuals licensed as insolvency practitioners under section 476 of that Act. It covers how licence applications are assessed, the ethical principles practitioners must follow, and ongoing conduct, quality control and training requirements. Failure to comply can affect a licensee's fit and proper status and may lead to penalties, suspension or revocation of the licence.

• Licensing criteria: Sets residency tests, fitness and properness factors, and qualification/experience requirements (legal or accountancy qualification plus insolvency experience, or a minimum of 2,500 hours of relevant experience) that the Commission uses to assess applicants.
• Security requirement: Licensees, or their firm, must maintain professional indemnity insurance of at least 5,000 dollars per claim and in the aggregate annually against loss from negligence or breach of duty; the Commission may require higher levels.
• Annual return: Licensees must submit an annual return each year at the time annual licence fees become payable, in a form and content the Commission may vary.
• Ethical conduct and conflicts: Licensees must act with integrity, objectivity, competence, due skill and courtesy, and must identify and manage self-review and self-interest threats and conflicts of interest, including sequential or joint appointments.
• Conduct and quality control: Licensees must comply with the Insolvency Act and Commission technical standards, maintain adequate procedures to ensure staff are fit and proper and competent, and assess independence and resources before accepting appointments.
• Continuing professional education: Licensees must complete a minimum of 30 hours of relevant CPE annually, including at least 10 hours of structured CPE (unless waived by the Commission), and must keep and, on request, summarise CPE records.

The Code took effect on 8 October 2004 and applies to insolvency proceedings commenced on or after that date; this version reflects a revision dated 1 January 2020.

Key obligations

• Licensees must maintain professional indemnity insurance of at least 5,000 dollars per single claim and in the aggregate annually covering negligence or breach of duty in insolvency work.
• Licensees must submit an annual return to the Commission each year at the time annual licence fees become payable.
• Licensees must comply with the Insolvency Act, Insolvency Practitioners Regulations, and any technical standards or good practice guidelines issued by the Commission.
• Licensees must establish and maintain quality control procedures to ensure staff are fit and proper and that appointments are only accepted where independence, resources and competence are adequate.
• Licensees must complete a minimum of 30 hours of relevant CPE each year, including at least 10 hours of structured CPE, unless the Commission waives this requirement.
• Licensees must keep records of all CPE undertaken and provide a summary to the Commission on request.
• Licensees must identify and appropriately manage self-review and self-interest threats to objectivity, including conflicts arising from prior professional relationships or sequential/joint appointments.
• Licensees must conduct insolvency work with integrity, objectivity, competence, due skill and courtesy.

Applies to

insolvency practitioners, licensees under the Insolvency Act, applicants for an insolvency practitioner licence, firms and employees carrying out insolvency work

Deadlines

• each year at the time annual licence fees become payable: Deadline for submitting the annual return to the Commission.
• each year: Minimum of 30 hours of relevant CPE required, including at least 10 hours of structured CPE, unless waived by the Commission.
• 8 October 2004: Commencement date of the Code, applicable to insolvency proceedings commenced on or after this date.