Section 12.02.510. Minimum standards.

	(a)  The master errors and omissions insurance policy must provide to each individual licensee, at a minimum, the following terms of coverage:  
		(1) not less than $100,000 limit of liability for each licensee per covered wrongful act or per covered claim depending on the policy form used by the insurer; claims expenses including the cost for investigation or defense must be in addition to the limit of liability; if the limit of liability is on a  
			(A) covered wrongful act basis, two or more claims arising out of a single wrongful act or a series of related wrongful acts may be considered one claim;  
			(B) covered claim basis, two or more related wrongful acts may be considered one claim;  
		(2) an annual aggregate limit of liability of not less than $200,000 per licensee;  
		(3) a deductible amount for each covered wrongful act of not more than $2,000 for every $200,000 annual aggregate limit of liability; an additional deductible for investigation and defense costs may be considered if necessary to meet the maximum premium amount under 12 AAC 02.550, but it is not required;   
		(4) an extended reporting period of 90 days and an option to purchase an additional three years extended reporting period for a premium not to exceed 150 percent of the premium charged for the last year of the terminating coverage;  
		(5) the ability of a licensee, upon payment of an additional premium, to obtain higher limits of coverage or to purchase additional coverages from the group insurer as may be available from the insurer;   
		(6) the coverage provided under the master errors and omissions insurance policy must be individual and specific to the licensee and must cover the licensee regardless of changes in real estate broker employing the licensee; and  
		(7) prior acts coverage must be offered to a licensee who has maintained the same or similar coverage, continually in-force until the date and the time that coverage begins under the master errors and omissions insurance policy coverage.  
	(b)  The master errors and omissions insurance policy must contain a provision requiring the consent of the insured to settle a claim except that the insured may not unreasonably withhold consent.  
	(c)  The insurer that is selected to provide the master errors and omissions insurance policy shall  
		(1) maintain an A.M. Best rating of "B+" or better and financial size category of class VI or higher;  
		(2) maintain a certificate of authority issued under AS 21.09  by the director of insurance to transact insurance business in this state and be in compliance with AS 21;  
		(3) provide the master errors and omissions insurance policy after notification by the Real Estate Commission that it is the successful bidder of a competitive bidding process under AS 36.30;  
		(4) enter into contract to provide the master errors and omissions insurance policy in conformity with AS 08.88.172, 12 AAC 02.510 - 12 AAC 02.590, and AS 21; and  
		(5) collect premiums, maintain records, and report to the Real Estate Commission the names of those insured and claims experience, date of claim, amount paid, nature of claim, and claims information on an annual or a bi-annual basis or on request by the Real Estate Commission.  

Authorities

08.88.172

Notes

Reference

12 AAC 02.510
12 AAC 02.530
12 AAC 02.560
12 AAC 02.590

Authority

AS 08.88.172

History

Eff. 12/4/2011, Register 200