The Department for the Economy has made S.R. 2025 No. 177 - the Insolvency Practitioners (Amendment and Transitional Provisions) Regulations (Northern Ireland) 2025 - signed on 12 November 2025 and commencing on 9 December 2025. The instrument amends Schedule 2 to the Insolvency Practitioners Regulations (Northern Ireland) 2006, which prescribes the security that practitioners must keep in force while acting.
The Regulations confirm that claims are anchored to “relevant losses”, being the losses linked to practitioner fraud or dishonesty referenced in paragraph 3(1)(b) of Schedule 2 to the 2006 Regulations. Interest must be paid on relevant losses at a rate above the Sterling Overnight Index Average, with the new paragraph 8ZB specifying that interest runs from the date of the loss to the date the claim is paid. This codifies both the benchmark and the accrual period in primary bond terms.
Financial cover is re‑set in two layers. First, the specific penalty sum remains the per‑case limit that applies where the practitioner acts, with claims under that sum now expressly including SONIA‑plus interest. Second, the general penalty sum is increased to £750,000 and is available either when a specific penalty sum is not in force for a case or where amounts under that specific sum are insufficient to meet all claims. This broadens the backstop protection for creditors and estates.
The bond must now also meet certain cost liabilities where a successor insolvency practitioner is appointed. New terms require payment of reasonable costs and expenses incurred in investigating suspected fraud or dishonesty, making and evidencing a claim on the bond, obtaining expert (including legal) advice, and administering the estate where those costs duplicate work done before the successor’s appointment. This gives clear authority for recovery of the practical costs of remediation.
A minimum run‑off for claims is introduced. New paragraph 8ZA requires that bond terms allow at least two years in which a claim may be made, beginning on the date the practitioner is released or discharged in the case. If the practitioner later holds office in a subsequent capacity in the same case, the two‑year period runs from release or discharge from that later office. This places the claim window after office‑holder exit, not appointment.
Where a bond limits the surety’s liability under the specific penalty sum by reference to when losses may arise, the “SPS indemnity period” is regulated. Under paragraph 8ZC, that period must be at least six years from the date of the practitioner’s appointment in the case and must be capable of extension with the surety’s consent. Consent must not be unreasonably withheld, though it may be given subject to reasonable conditions, including an additional premium.
Pre‑expiry notifications are formalised. Paragraph 8ZD requires the surety to notify the practitioner and their authorising body at least 60 days before any specific penalty sum is due to expire or otherwise cease to have effect for reasons other than the practitioner’s release or discharge. The notice must state the expected expiry date, whether the surety is willing to extend or renew, and any conditions, such as premium. Until a compliant notice is given, the specific penalty sum continues in force unless the parties agree otherwise.
The instrument clarifies the interaction between timing provisions. The two‑year run‑off defines how long a claim can be made after the office‑holder is released or discharged, whereas the SPS indemnity period governs the time window during which relevant losses must have arisen following appointment. In practice, a claim can be brought during the post‑release run‑off for a loss that arose within the minimum six‑year SPS indemnity period.
A small interpretive update is made to the 2006 Regulations by completing the definition trail for “insolvency practitioner” to refer to Article 349A of the Insolvency (Northern Ireland) Order 1989. New definitions are also inserted into Schedule 2 for “relevant losses” and “SPS indemnity period”, aligning terminology used across the amended paragraphs.
Transitional and saving provisions apply. The amendments do not apply to a bond issued by a surety before 1 January 2027 where the practitioner was appointed in the case before 1 January 2027, including appointment in a subsequent capacity if the initial capacity pre‑dates that threshold. During the transitional period from 9 December 2025 to 31 December 2026, the Department may approve a bond form that complies either with the pre‑9 December 2025 requirements or with the amended Schedule 2.
For practitioners, sureties and authorising bodies, the operational effects are clear. Bond wordings will need to provide SONIA‑plus interest from loss to payment, the uplifted £750,000 general penalty sum, the two‑year post‑release claim window, and SPS indemnity periods of at least six years with an extension mechanism. Sureties should implement a process to issue the 60‑day notices with the required information to avoid unintended lapses.
The Regulations were made under Articles 349(3) and 363 of the Insolvency (Northern Ireland) Order 1989. The Department states it has had regard to the regulatory objectives set out in Article 350C(3). The instrument was sealed by the Department for the Economy and an explanatory memorandum has been published on legislation.gov.uk. No regulatory impact assessment was produced, with no, or no significant, impact anticipated. Key dates are: made on 12 November 2025, in force on 9 December 2025, transitional period to 31 December 2026, and 1 January 2027 as the main cut‑off for legacy bonds and appointments.