Government mulls changes to bonding arrangements for insolvency practitioners

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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