Guidance on Peer Review Process for Insolvency Professionals

Guidance on Peer Review Process for Insolvency Professionals.

The Peer Review Policy issued by the ICAI (IIIPI) provides a structured framework for evaluating the performance of Insolvency Professionals. Peer Review Process for IPs is an important mechanism for ensuring compliance, improving professional standards, and maintaining transparency in insolvency resolution processes. The IBBI has been working towards strengthening the regulatory framework by introducing peer review mechanisms similar to those followed in other professional domains. This initiative is aimed at ensuring best practices, reducing regulatory violations, and improving trust among stakeholders, including:

• Creditors (Financial & Operational)
• Committee of Creditors
• Investors & Resolution Applicants
• National Company Law Tribunal
• Regulators (IBBI, SEBI, RBI, etc.)

Objectives of Peer Review for IP’s

Peer Review is a systematic evaluation of the performance of an IP by another experienced IP or an independent authority to ensure adherence to the IBC, 2016, and the regulations prescribed by IBBI. : The process assesses:

• Improved Compliance & Governance – Ensures adherence to IBBI Regulations, IBC Code of Conduct, Adherence to ethical and professional standards and ethical standards and Compliance with IBC and IBBI regulations
• Higher Transparency in CIRP & Liquidation – Enhances disclosure of financials, Information Memorandum (IM), and key process decisions.
• Stronger Stakeholder Confidence – Builds trust among creditors, CoC, and investors by ensuring that CIRP/Liquidation processes are handled with due diligence.
• Fewer Regulatory Violations & Disciplinary Risks – Helps identify and correct errors in CIRP reports, CoC decisions, valuations, and liquidation processes. Best practices in CIRP, liquidation, and voluntary liquidation
• Best Practices & Process Standardization – Creates a uniform standard for handling cases across different Insolvency Professional Agencies (IPAs). Quality of reports and disclosures (including Information Memorandum, Resolution Plans, Public Announcements, etc.)

Scope & Applicability of Peer Review Process for IP’s:

• Voluntary for Small IPs: IPs with less than 10 CIRP/Liquidation cases.
• Mandatory for Larger IPs: IPs handling 10 or more CIRP/Liquidation cases in the last 3 years.
• Conducted by a Peer Reviewer empaneled with IIIPI.
• Focuses on technical, professional, and ethical compliance

Steps in the Peer Review Process for Insolvency Professionals

The peer review framework typically follows these steps:

Step-1: Selection of IPs for Review : IBBI or the Insolvency Professional Agency may select IPs for peer review based on risk-based criteria, complaints, or random selection. IPs involved in high-value CIRPs or cases with regulatory concerns are more likely to be reviewed.

Application & Appointment of Peer Reviewer: IIIPI provides a panel of 3 reviewers; the IP selects one. Then  Reviewer must be an experienced IP with at least 5 CIRP/Liquidation cases completed. Ip and Peer Reviewer required to Confidentiality agreement must be signed.

Step-2: Appointment of Peer Reviewer

An independent Peer Reviewer (another experienced IP or a regulatory representative) is assigned. The reviewer is responsible for examining the compliance, documentation, and quality of work. Action Plan for IPs to Prepare for Peer Review

• Maintain well-organized case files for all CIRP and liquidation assignments.
• Ensure timely and accurate filings with IBBI, NCLT, and stakeholders.
• Keep clear documentation of COC meetings, claims verification, and IM disclosures.
• Regularly update knowledge on IBC amendments, IBBI circulars, and compliance requirements.

Step 3: Document Review & Compliance Check

The IP Reviewer evaluates:

• Case files and documents (CIRP, liquidation reports, compliance submissions)
• Public disclosures and notices (e.g., Form G, IM, progress reports)
• Communication with stakeholders (creditors, COC, NCLT filings)
• Taxation and Financial Compliance (GST, Income Tax filings, carry-forward losses disclosure)
• Next step to Review Compliance Requirements for Registered Insolvency Professionals
  • Timely Filing of CIRP and Liquidation Reports
  • Adherence to Code of Conduct under First Schedule of IBBI (IP) Regulations, 2016
  • Maintenance of Records & Disclosures (Regulation 34A of CIRP Regulations, 2016)
  • Annual Fee Payment and CPE Compliance
• Review the key Compliance Areas in Peer Review

✔ Timely filing of statutory reports (CIRP progress reports, liquidation reports, claims verification)
✔ Transparency in financial disclosures (handling of CIRP funds, tax compliance, carry-forward losses)
✔ Adherence to professional ethics (avoiding conflicts of interest, fair treatment of stakeholders)
✔ Quality of resolution plans (ensuring viability, adherence to Section 29A of IBC)

Step-4: Reporting & Discussion of Findings in Review Report & Feedback: Reviewer prepares a Preliminary Report with observations. Then IP gets 7 days to respond on it, If concerns remain, a Qualified Report is issued; otherwise, a Satisfactory Report is submitted. The reviewer submits a peer review report highlighting compliance levels, deficiencies, and recommendations. IPs may be required to rectify deficiencies or implement suggested improvements.

Step-5: Final Report & Certification – Corrective Actions & Follow-Up: If satisfactory, IIIPI issues a Peer Review Certificate (valid for 3 years). If not, IP must undergo a Follow-on Review after 6 months. If deficiencies are found, the reviewed IP may need to submit an explanation or take corrective actions. In serious cases, IBBI may initiate disciplinary proceedings.

Storage & Documentation of Peer Review Records by IIIPI

Upon completion of the Peer Review Process, the Indian Institute of Insolvency Professionals of ICAI (IIIPI) is required to store relevant documents for a period of 8 years, ensuring Data is kept secure and disclosed only as required by the IBBI or law. All reviewed IPs are treated equally. Adequate safeguards are in place to prevent data loss. Key Documents to Be Stored by IIIPI

Checklist for Peer Review :  Prepared by the Peer Reviewer, covering:

• Quality of Records & Documentation maintained by the IP.
• Compliance with IBBI, Adjudicating Authority (AA), and IIIPI requirements.
• Adherence to Technical, Professional, and Ethical Standards.
• Compliance with IBC regulations, rules, guidelines, circulars, and amendments.
• Methodologies & best practices adopted for transparency & stakeholder communication.

Questionnaire Sent to IP : Pre-review questionnaire shared with the Reviewed IP before starting the Peer Review. And Covers details about CIRP/Liquidation assignments, governance mechanisms, and compliance measures.

Preliminary Report (from Peer Reviewer) : Initial findings highlighting strengths and weaknesses in IP’s practices. & Identifies gaps in compliance, reporting, documentation, & ethical adherence.

Representation from Reviewed IP : The Reviewed IP’s response to the Preliminary Report, providing justifications, corrections, or explanations.

Final Peer Review Report: The conclusive assessment prepared by the Peer Reviewer, incorporating the IP’s responses. Categorizes review status as Satisfactory or Qualified. And Forms the basis for Peer Review Certification or the need for Follow-on Review after 6 months.

IIIPI stores all Peer Review reports for 8 years. The Monitoring Committee reviews the findings quarterly. IIIPI can withhold certification if fees are unpaid.

What is Costs & Fees for Peer Review?

The Peer Review Fee Structure for IPs is determined based on the average gross receipts/revenue of the IP, including fees paid to the Insolvency Professional Entity for assignments under IBC during the review period. Peer Review of IP charges the Fees are based on an IP’s revenue from CIRP/Liquidation cases: Peer Review Fee Slab Based on Gross Receipts:

Average Gross Receipts / Revenue of IP (p.a.)	Consolidated Fee
Less than INR  10 lakh	INR 30,000
INR 10 lakh – INR  50 lakh	INR 50,000
INR-50 lakh – INR  1 crore	INR 75,000
INR 1 crore – INR  3 crore	INR 1,00,000
INR-  3 crore – INR  5 crore	INR 1,50,000
INR  5 crore – INR 10 crore	INR 2,00,000
INR- 10 crore – INR 20 crore	INR 3,00,000
INR 20 crore – INR 30 crore	INR 4,00,000
Above INR 30 crore	INR  5,00,000

This fee is a one-time charge for the period under review, not an annual fee. The review period covers up to 3 years or the duration since the last Peer Review, whichever is shorter. The calculation includes fees received by both the IP and the IPE. An additional INR 5,000 administrative charge is payable to IIIPI for processing. Payment is made after the final Peer Review report is cleared. Includes all assignments under IBC during the review period. And Covers fees received by both IP and IPE. It Determines the one-time Peer Review Fee. And it Helps classify the IP into the correct fee slab for Peer Review.

Calculation of Average Gross Receipts/Revenue for Peer Review

To determine the Peer Review Fee, the Average Gross Receipts/Revenue of the Insolvency Professional  (including applicable fees payable to the Insolvency Professional Entity is calculated as follows:

Formula: Average Gross Receipts (Per Annum)=Total Gross Receipts over Review PeriodNumber of Years under Review\text{Average Gross Receipts (Per Annum)} = \frac{\text{Total Gross Receipts over Review Period}}{\text{Number of Years under Review}}Average Gross Receipts (Per Annum)=Number of Years under ReviewTotal Gross Receipts over Review Period​

Keynote for Calculate:

• The review period is up to 3 years (or from the last Peer Review date).
• Sum up the total revenue earned by the IP from all CIP, liquidation, and voluntary liquidation assignments under the IBC during the review period. Include fees applicable/payable to the IPE for the assignments.
• If the review period is 3 years, divide the total receipts by 3 to get the annual average.

IP & IPE Enhancing Performance via Peer Review

Peer Review is conducted by experienced IPs and benchmarks professional services against industry standards, ensuring compliance with relevant laws, ethical principles, and IBC launch of the IIIPI Peer Review Framework in July 2022, Currently, over 30 professionals are undergoing peer review. ICAI (IIIPI) India’s largest frontline regulator under the IBC, with approximately 63% of IP as its members. IIIPI actively collaborates with the IBBI to build professional capacity & provide policy inputs to regulators. IIIPI Board, emphasized that subjecting IPEs to peer review would lead to improved performance and decision-making while promoting adherence to best practices and ethical standards. IPEs play a crucial role in assisting IRPs, RPs, & Liquidators in various aspects of the insolvency resolution process. Their key responsibilities include:

• Verifying and processing creditors’ claims.
• Finalizing agendas for CoC meetings.
• Managing the Corporate Debtor as a going concern.
• Preparing the Information Memorandum.
• Ensuring statutory compliances.
• Drafting and publishing EoIs.
• Identifying and finalizing suitable RAs.
• Additionally, IPEs are authorized to undertake insolvency assignments independently.

What is Expected Outcomes of Peer Review of IP:

Peer Review of IP will improve compliance and governance, also Higher transparency in CIRP & liquidation processes, Moreover that it create the Stronger trust among stakeholders (creditors, COC, NCLT, investors), In case Peer Review of IP Fewer regulatory violations and risk of disciplinary actions. Now IP are planning to prepare for Peer Review of IP from their respective Agency where Ip registered.