What is the APIV Professional Standards Scheme?

The APIV Professional Standards Scheme (Scheme) is an added layer of protection on top of a Scheme member’s Professional Indemnity Insurance (PII) policy. In the event a successful claim is made against a Scheme member, providing all compliance obligations of the Scheme have been satisfied, the member may be able to plead the Scheme which should ‘cap’ the liability to an amount outlined in the Scheme Instrument.

The Scheme operates and falls in all States and territories under the respective professional standards legislation.

 

What does the APIV Scheme cover?

The Scheme applies all types of ‘Occupational Services’ carried out by a Scheme member by application of the qualifications, training, skills, practices, disciplines, specialisations, standards, guidelines and experience of a CPV, CPV(P&M) or RPV.  This includes ‘Valuation of Real Property’ & ’Valuation of Plant & Machinery’.

Valuation of Real Property is defined as any valuation of any right, interest, or benefits related to the ownership, occupation or use of real property including land and all things that are a natural part of the land as well as any improvements to the land (but excluding plant, machinery, and equipment) expressed as an Assessed Value.

Valuation of Plant & Machinery means any valuation of any right, interest or benefit related to the ownership, possession or use of any chattel(s), including plant, machinery, or equipment, expressed as an Assessed Value.

Assessed Value under the Scheme means an express statement of professional opinion by a person who is or was a Scheme member as to the value of any right, interest or benefit related to the ownership, occupation or use of real property or plant, Machinery or equipment.

It also includes a range of other consultancy services including market commentary, feasibility reports, land use assessments and housing supply analyses.

 

What are the benefits of being an APIV Scheme Member?

Enhanced consumer protection

  • Risk management strategies based on claims, complaints, audit outcomes and analysis
  • Higher level of standards and quality reports

Enhanced professional risk profile for members

  • Complaint culture within membership
  • Stakeholder engagement and education
  • Risk management strategies based on claims, complaints, audit outcomes and analysis

Member benefits

  • Capped liability in the event of a successful claim
  • Recognition as a profession by Professional Standards Councils (PSC)s
  • External recognition and preferential treatment to non-PSS members (e.g. Government contracts, insurers)
  • Enhanced professional risk profile
  • Mitigation of personal liability

Who must join the APIV Scheme?

The API Membership Policy provides that API Members who undertake valuations and hold one of the following certifications must join the APIV and participate in the Scheme unless exempted by the APIV Board:

  • Certified Practising Valuer,
  • Certified Practising Valuer (Plant & Machinery), or
  • Residential Property Valuer.

The Scheme operates on a ‘one-in, all in’ basis, hence the firms and employees/sub-contractors who are eligible for APIV membership and are covered under the valuation firm’s professional indemnity insurance (PII) policy, must join the APIV to gain the benefit of the Scheme.

 

How much does it cost to join and stay in the APIV Professional standards scheme?

New Application

The cost is $297 incl. GST per membership joining the APIV as a Corporate, Sole Trader.

Additional members

This membership is for an individual joining an existing APIV firm (Corporate Member). The annual fee will be on a pro-rata ($297) basis to bring the new individual member into line with the firms APIV renewal month.

Annual Renewals

Renewal fee is $242 incl. GST per APIV entity (corporate, Sole Trader and individual)

What is covered by the APIV Scheme?

  • Real Property
  • Plant, Machinery & Equipment
  • Other Occupational Services

 

Compliance obligations of APIV Members

Members are responsible to determine their compliance obligations and ensuring that they comply with all relevant legal and Scheme requirements.

This General Handout contains only a high-level overview of the key aspects of the operation of the APIV Scheme. It is the responsibility of each participating Member to familiarise themselves with the compliance requirements of the Scheme.

A Member who is a participant in the Scheme must, at all times, observe and comply with the following obligations:

API and APIV Scheme members are responsible to determine their compliance obligations and ensuring that they comply with all relevant Membership, legal and Scheme requirements.

A member who is a participant in the Scheme must, at all times, observe and comply with the following obligations:

  • the Policies of the APIV and the API;
  • any codes of professional conduct and ethics set out by the API;
  • any practice standards or guidelines set out by the APIV and the API;
  • any valuation and property standards set out by the API; and
  • any Policies or rules relating to CPD requirements or educational requirements prescribed by the API.
  • the APIV Scheme Instrument;
  • the APIV Insurance Standards under the APIV Scheme, including the maintenance of a compliant PII Policy, sufficient business/liquid assets and the requirement to take out run-off cover for a prescribed number of years;
  • the Supervision Guidelines accompanying the APIV Scheme;
  • the disclosure requirements relating to limitation of liability pursuant to the Professional Standards Legislation; and
  • the requirements of the Professional Standards Councils (PSC) and the Professional Standards Legislation.
Requirements of the PSC and the Professional Standards Legislation, including but not limited to:
  1. completion of an Annual Compliance Self-Declaration.
  2. full participation in APIV random Compliance Audit.
  3. notifying within a reasonable time frame of any new notification, claim or settlement of an existing claim.
  4. updating within a reasonable time frame of any existing notification or claim.
  5. immediately advising the APIV when a notification or claim approaches or exceeds 50% of the Monetary Ceiling for the professional services undertaken.
  6. notifying and updating the APIV of new and existing complaints and disciplinary matters relating to professional services; and
  7. providing APIV with PII policy information, data, and any other evidence of Scheme compliance, as requested by the APIV

PI Insurance Compliance under Scheme

In order to obtain the benefit of the Scheme, members must maintain, during the currency of the Scheme, a professional indemnity insurance (PI Insurance) policy that meets the minimum requirements set out in the APIV Insurance Standards. The key requirements include:

 

Sum Insured

Where a proceeding is brought against a person who was a Participating Member at the time of the act or omission giving rise to the Occupational Liability, such person must have the benefit of a PI Policy with a Sum Insured not less than:

  1. where the act or omission giving rise to the claim occurred during the currency of the Scheme, the amount of the applicable monetary ceiling (calculated as per the table on page 5); or
  2. where the act or omission giving rise to the claim occurred during the currency of a previous APIV scheme of which the member was a participating member, the applicable monetary ceiling set out in that prior scheme.

The Sum Insurance cannot be less than $1 million. Members should obtain advice from a specialist insurance broker in selecting an appropriate sum insured having regard to the above requirements.

 

Defence Costs

Where the PI Policy is costs inclusive the Sum Insured must exceed the above minimum requirement by at least $500,000.

Where the PI Policy provides cost-in-addition cover such cover must be not less than $500,000.

 

Maximum Excess

The maximum excess is calculated on the valuation firm’s annual fees as follows:

Annual Firm Fees

$0 to $349,000

$350,000 to $499,999

$500,000 to $999,999

$1,000,000 to $1,999,999

$2,000,000 to $9,999,999

$10M+

Maximum Excess

$40,000

$60,000

$80,000

$100,000

$150,000

$250,000

Run-off Cover

Where automatic run-off cover is not reasonably available (which is currently the case), members must arrange and maintain run-off cover for a period of 7 years following cessation of the insured professional business.

Are there any transitional issues I may need to know?

Yes, all APIV member firms and sole traders must ensure they continue to hold sufficient PII for past valuations that fall under the past APIV schemes. (2010 – 1st Sep 2021).

If you are considering lowering your monetary ceiling, you should conduct a detailed risk analysis of all your past valuation work and seek independent legal or insurance advice.