Friday 11 May 2012

REVISION IN MINIMUM COVERAGE OF PROFESSIONAL INDEMNITY INSURANCE (PII)

The Council at its meeting held on 29 March 2012 had approved a revision in the minimum coverage of Professional Indemnity Insurance from RM100,000.00 to RM250,000.00 per partner per firm with effect from 1 July 2012.

PII was first made mandatory for all members in public practice on 1 October 1998 where the minimum mandatory limit of indemnity was set at RM100,000.00 per partner per firm. The increase takes into consideration the need to have a higher insured policy limits to cater for higher costs of civil liabilities. The increment is also in line with several regulated professions in Malaysia and several international professional accountancy bodies which have a similar mandatory requirement for PII.

Consequently, the current Section 510 of the Institute’s By-Laws (On Professional Ethics, Conduct and Practice) has been amended as follows:



510.3 (1) Every member in public practice must maintain a policy of professional indemnity insurance with a minimum coverage of Ringgit Malaysia Two Hundred and Fifty Thousand (RM250,000.00), upon commencement of public practice.
(2) Proof of such coverage is required for the purpose of the annual renewal of the member’s practising certificate pursuant to Rule 9 of the Malaysian Institute of Accountants (Membership and Council) Rules 2001.
(3) The Membership Affairs Committee of the Council or any other Committee so delegated by the Council for this purpose, may reject the application of any professional accountant for the renewal of the practising certificate if there is non-compliance with the requirements of Rule 9 of the Malaysian Institute of Accountants (Membership and Council) Rules 2001 or with the above requirement without proper excuse. Any professional accountant aggrieved with such a decision, may appeal to the Council whose decision on the same is final.
510.4 Where a member in public practice carries on practice under more than one firm, that member is required to have separate policies of professional indemnity insurance with a minimum coverage of Ringgit Malaysia Two Hundred and Fifty Thousand (RM250,000.00) each, for himself or herself in each of these firms.


With the amendments, all member firms are required to maintain a PII policy with the minimum coverage of RM250,000.00 per partner per firm and are required to make the necessary arrangement to increase the sum insured for the firm’s existing policy/ies.

Member firms with PII policies obtained from the Institute’s appointed broker, Marsh are required to increase the coverage in the coming renewal. For those who have renewed their policies earlier, please contact your insurance broker/company to increase the sum insured and notify the Institute thereafter.

Please provide us with a copy of your firm’s revised PII policy latest by 31 July 2012. The policy can be faxed to 03 – 22799386 or emailed to memberfirm@mia.org.my. For any clarification, please contact the Membership Department of the Institute at 03-22799200.

Thank you.

HO FOONG MOI (MS)
Acting Chief Executive Officer

1 comment:

  1. It is looking that you have very good knowledge about pi insurance.. What a great post is! i am really impressed with your writing skills..
    Professional Indemnity

    ReplyDelete

CCS Group's Official Website

We are thrilled to announce that CCS Group has launched a new website at www.ccs-co.com Some of the great new features of this newly designe...