Liability capping scheme reporting requirements

Reporting

All practices, with at least one CPP holder, are required to provide information regarding PI insurance cover and compliance with the Institute limitation of liability scheme: 

Confidentiality is assured

We appreciate that this information is sensitive. Please be assured that responses are treated as confidential and protected by privacy law. Information reported to the regulator is aggregated data, and the Institute only retains members' PI renewal month so we can prompt members at their next renewal.

Thank you to members who contributed to the 2009 Risk Management Report on the Institute's liability scheme which was lodged with the PSC in March 2010.

In response, the PSC said: 'The ICAA's commitment to its annual risk management reporting requirements is matched by its commitment to professional standards generally, and the Professional Standards Councils look forward to the ongoing benefits their relationship with the ICAA will bring'.

The questionnaire enables the Institute to assess and monitor the PI insurance market. The 2009 report confirmed the relatively soft market, with responses revealing the majority of premiums were less than 1.5% of practices' gross fees, despite the increase in minimum PI requirements to $1million. There was also an increase in practices obtaining costs-in-addition cover.

Why is this important?

The scheme regulators and government will continue to review and assess whether the liability capping schemes are effective – and should be continued. Specifically, they will need to know that members of the Institute are:

• Achieving and maintaining appropriate levels of professional qualifications and experience
• Adhering to a prescribed code of ethics
• Maintaining professional indemnity insurance to meet claims made against them to a prescribed limit.

The Institute also has to tell the regulator how many claims have been made against members, and the size of those claims.

It was a condition of getting the schemes approved that this information, required under Professional Standards Legislation, be collected. As this data is not otherwise available to the Institute, members need to supply it directly.

Why will claims data be required on an ongoing basis?

The claims data collected will assist the Professional Standards Council (PSC) to monitor the operation and effectiveness of the Institute scheme.

The information will also enable the Institute and the PSC to assess the success of its risk management strategies. These risk management strategies are intended to reduce the number and level of claims against members. This information will also allow the Institute to adapt those strategies in response to changes in the number and basis of claims made against members over time.

Updated PI calculator
Use our online PI calculator to clarify the limit of PI cover needed (to comply with the Institute's requirements).

Hard copy version of the 2011 questionnaire
You can print off a PDF version of the latest questionnaire, complete it and then fax it to (02) 9262 1310 or mail it to:
Professional Standards team - 8th Floor
The Institute of Chartered Accountants in Australia
GPO Box 9958
Sydney NSW 2001

Need more help with completing the questionnaire?
For further assistance in completing the questionnaire, please refer to the Frequently asked questions on What liability will be limited?, Who gets the benefit of the capping? and Disclosure of limited liablity.

For more information contact the Institute's Professional Standards Team on (02) 9290 5627 or by email.

Article last updated 2 May 2011