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Government mulls changes to bonding arrangements for insolvency practitioners

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THE government is considering whether it should propose changes to the legislation governing bonding arrangements for insolvency practitioners.

Insolvency practitioners are required by law to take out a bond to provide appropriate levels of security to cover any losses as a result of fraud or dishonesty on their part.

The Insolvency Service said it has issued a call for evidence after stakeholder said that the current arrangements are inflexible and prescriptive and fail to protect creditors.

The call for evidence considers:

  • how the current bonding system works
  • the weaknesses with the current bonding system
  • what similar system operates in other professions
  • potential non-legislative and regulatory changes
  • potential options for legislative change

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