Statement of Insolvency Practice (SIP) 3.1

Introduction

The Joint Insolvency Committee (JIC), through a working group, has undertaken a review of SIP 3.1 and is consulting on proposed changes to the SIP. The working group comprised insolvency professionals, regulators and other stakeholders including HMRC and the Insolvency Service involved in the Individual Voluntary Arrangement (IVA) process

The Insolvency Service is the secretariat for the JIC and is publishing this consultation on the JIC’s behalf. This is part of arrangements which reflect the Government’s 2023 proposal for the Secretary of State to be given the overall responsibility for setting ethical and technical standards for the insolvency profession, subject to legislation.

The JIC remains responsible for maintaining Statements of Insolvency Practice and for considering consultation responses.

Proposed Changes

The IVA market continues to evolve; since the last update to SIP 3.1. in 2023 the FCA has implemented its ban on referral fees to debt packagers. This has led to the emergence of new routes through which IVA providers, particularly those in the volume sector, obtain work. As a result, customers may experience a complex referral journey that lacks transparency before entering an IVA.

The revised SIP therefore strengthens and expands the requirements for due diligence of referrers. It requires insolvency practitioners to identify and understand the entire referral journey and to ensure that debtors are aware of the roles and responsibilities of everyone involved in the IVA process. This would be from the initial point of contact and advice through to the implementation of the arrangement, including who each party works for.

The revised SIP emphasises that the customer needs to understand all the information, explanations, consequences of an IVA and other debt solutions available and that customers need sufficient time to consider this information before deciding whether to proceed with an IVA.

The SIP also expands on the requirements for identifying, assessing and responding to customer vulnerabilities. This is intended to ensure that customers are able to fully understand the IVA process and their obligations, and that an IVA is a suitable and sustainable solution for their circumstances.

Other revisions to the SIP include:

• clarification that all records, regardless of format, should be retained for at least the duration of the IVA

• strengthening of the requirement to provider advice tailored to the individual’s circumstances, including where interlocking IVAs are being considered

• reorganising, consolidating and renaming sections, such as those on record keeping and the nominee, to improve the flow of the SIP and reduce repetition

• introducing a new section on decision procedures.

Consultation

We welcome responses from anyone who has an interest in IVAs, particularly:

• Insolvency practitioners
• Creditors and creditor organisations
• Debtors
• Providers of debt advice
• Recognised Professional Bodies
• Insolvency trade bodies

You can see full details of the proposed changes below:

SIP 3.1 track changes comparison draft

SIP 3.1 consultation clean draft

You can respond to the consultation by email to IP.standards@insolvency.gov.uk

When responding, please provide details of the firm or organisation you are replying on behalf of. If you are an insolvency practitioner, please provide details of your authorising body.

The consultation will be open for 12 weeks and will close on Tuesday 8 December 2026.

Any revised SIP will only be introduced after careful consideration of the responses received and any plan to introduce changes will consider any continuing challenges faced by the insolvency profession.

Consultation questions

1. Do you think the revised SIP identifies all appropriate principles?

2. Do you think the revised SIP identifies the key compliance standards?

3. Do you consider that the revised SIP strikes the right balance between principles and prescriptive requirements (compliance standards)?

4. Do you have any comments regarding any potential duplication with the Code of Ethics and other SIPs?

5. Do you agree with the principle that the debtor should be given time to think before committing to an IVA?

6. If no, why not?

7. If yes, what do you believe to be an appropriate amount of time to give?

8. Do you consider that the revised SIP adequately covers the requirements around consideration of customer vulnerabilities?

9. Do you think that the revised SIP sets out adequately the standards required in relation to the involvement of any referrers or introducers, in particular lead generators, debt packagers and joint-nominee arrangements, including an IP’s obligations where the customer journey isn’t clear or there are shortcomings in a referrer or introducer’s work?

10. Do you have any comments regarding the inclusion of requirements around the use of AI?

11. Do you have any other comments on the revisions to the SIP and whether they adequately set out the standards required?

12. Do you have any concerns about the practical application of any elements of the revised SIP?