Northern Ireland has updated the security that insolvency practitioners must maintain while acting. The Department for the Economy made the Insolvency Practitioners (Amendment and Transitional Provisions) Regulations (Northern Ireland) 2025 (S.R. 2025 No. 177) on 12 November 2025; they come into operation on 9 December 2025. The instrument amends Schedule 2 to the Insolvency Practitioners Regulations (Northern Ireland) 2006 and states, under Article 363(3) of the Insolvency (Northern Ireland) Order 1989, that the Department has had regard to the regulatory objectives.
The rules reconfirm that a practitioner must keep a bond in force to protect against losses arising from fraud or dishonesty. The amendments introduce the defined term “relevant losses” for these losses and clarify that claims are made up to a case‑specific limit known as the “specific penalty sum”, alongside a separate “general penalty sum” that operates across cases when needed.
Interest is now mandated on relevant losses at a floating rate set above the Sterling Overnight Index Average (SONIA). New paragraph 8ZB specifies that this interest runs from the date the loss occurred to the date the claim is paid, aligning bond recoveries with a widely used sterling reference rate rather than a fixed percentage.
The general penalty sum is increased to £750,000, up from £250,000. It will pay claims, together with interest, where a specific penalty sum is not in force for a case or where the amounts available under that specific sum are insufficient to meet all claims arising from the case.
The bond must also cover reasonable costs borne by a successor insolvency practitioner. These include the costs of investigating suspected fraud or dishonesty, preparing and pursuing a claim and supplying evidence, obtaining expert (including legal) advice, and duplicate estate administration costs that mirror work undertaken before the successor’s appointment.
A minimum run‑off period of two years is introduced for making a claim under the bond. The period begins on the practitioner’s release or discharge in the case. Where 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.
Where a bond limits liability by reference to when losses arise, it must provide a minimum six‑year “SPS indemnity period” starting on the practitioner’s appointment in the case. The period must be capable of extension with the surety’s consent. Consent may carry reasonable conditions, such as payment of an additional premium, but must not be unreasonably withheld.
Before any security under a specific penalty sum expires or otherwise ceases to have effect for reasons other than the practitioner’s release or discharge, the surety must give at least 60 days’ notice to both the practitioner and their authorising body. The notice must state the expiry date, whether the surety will extend or renew, and any conditions. If this notice is not given, the specific penalty sum continues in force until the requirement is met unless the parties to the bond agree otherwise.
The interpretation provisions are tidied. Regulation 2 is adjusted to align the term “insolvency practitioner” with Article 349A of the Insolvency (Northern Ireland) Order 1989, and Schedule 2 now expressly defines “relevant losses” and the “SPS indemnity period” to support the operational clauses.
During the transitional period from 9 December 2025 to 31 December 2026, the Department may approve bond forms that comply either with the pre‑amendment 2006 regime or with the amended 2025 regime. This allows sureties, authorising bodies and firms time to update policy wordings and oversight processes.
The amendments generally do not apply to a bond issued by the surety before 1 January 2027 where the practitioner was appointed in the case before 1 January 2027. “Appointed” includes later appointment in a subsequent capacity if the initial appointment in that case occurred before 1 January 2027, enabling legacy cases to remain on pre‑amendment terms when both conditions are satisfied.
For current and future Northern Ireland appointments, bond wordings will need to reflect SONIA‑linked interest, the uplifted £750,000 general penalty sum, a two‑year post‑release claim window and a minimum six‑year SPS indemnity period, with 60‑day expiry notifications sent to the authorising body as well as to the practitioner. The Department’s note records that no separate regulatory impact assessment has been produced, as no, or no significant, impact is anticipated, and an explanatory memorandum is available.