SF0170 - Real estate agents-errors and omissions insurance-2.

 

2001

State of Wyoming

01LSO-0617

 

 

 

SENATE FILE NO.  SF0170

 

 

Real estate agents-errors and omissions insurance-2.

 

Sponsored by:  Senator(s) Miller, C. and Representative(s)
Morgan

 

 

A BILL

 

for

 

 1  AN ACT relating to real estate brokers and salesmen;
 2  requiring real estate brokers, associate brokers and
 3  salesmen to submit proof of errors and omissions insurance;
 4  providing for exceptions; authorizing rulemaking; and
 5  providing for an effective date.

 6 

 7  Be It Enacted by the Legislature of the State of Wyoming:

 8 

 9         Section 1.  W.S. 33-28-401 through 33-28-412 are
10  created to read:

11 

12         33-28-401.  Definition of term.

13 

14         (a)  As used in this article:

15 

 

Page  1

 

 

 

 1              (i)  The definitions provided under W.S.
 2  33-28-102 are applicable unless otherwise specified;

 3 

 4              (ii)  "Qualified insurance carrier" means an
 5  insurance carrier which maintains an A.M. Best Company
 6  rating of B+ or better and an A.M. Best financial size
 7  category of class VI or higher and is and will remain, for
 8  the policy term, authorized by the department of insurance
 9  to do business in this state as an errors and omissions
10  insurance carrier of the type contemplated by this article.

11 

12         33-28-402.  Insurance required.

13 

14  An applicant for issuance of a real estate license under
15  W.S. 33-28-106 on active status, a licensee renewing a
16  license or an inactive licensee activating a license under
17  W.S. 33-28-118, shall submit proof of insurance coverage
18  through the group plan or through certification of optional
19  coverage.

20 

21         33-28-403.  Minimum standards.

22 

23         (a)  The group policy obtained by the commission shall
24  cover all activities contemplated by W.S. 33-28-102(a)(iii)

Page  2

 

 

 

 1  and shall provide, at a minimum, the following terms and
 2  conditions:

 3 

 4              (i)  Not less than one hundred thousand dollars
 5  ($100,000.00) single-limit liability coverage for each
 6  licensee per occurrence or claim made, not including costs
 7  for investigation or defense;

 8 

 9              (ii)  An annual aggregate limit of not less than
10  five hundred thousand dollars ($500,000.00) per licensee;

11 

12              (iii)  A deductible amount of not greater than
13  one percent (1%) of the total single limit liability
14  coverage amount for each occurrence and a like deductible
15  amount for defense and investigation;

16 

17              (iv)  Coverage for the vicarious liability for
18  current or previously employed or contracted individuals;

19 

20              (v)  An extended reporting provision of ninety
21  (90) days and an option to purchase an additional three (3)
22  years extended reporting provision for a premium not to
23  exceed two hundred percent (200%) of the premium charged
24  for the last year of the terminating coverage;

 

Page  3

 

 

 

 1 

 2              (vi)  Coverage under this section for covered
 3  acts in any state, United States territory or Canada in
 4  which a covered individual, domiciled in Wyoming, holds a
 5  license; and

 6 

 7              (vii)  Stacking of benefits.

 8 

 9         (b)  The minimum coverage applies to each individual
10  licensee.

11 

12         33-28-404.  Exceptions to coverage.

13 

14         (a)  Except as provided in this section, coverage may
15  not exclude claims brought against the insured licensee
16  arising out of an act or failure to act by the licensee
17  when performing a professional service for which a license
18  is required. Coverage may limit or exclude claims brought
19  against a licensee which arise as follow:

20 

21              (i)  Out of claims or suits made or brought by
22  any insured person against any other insured person within
23  the same firm or from compensation disputes between
24  licensees;

 

Page  4

 

 

 

 1 

 2              (ii)  Out of loss assumed under contract or
 3  agreement, except for liability the insured would have had
 4  in the absence of such agreements;

 5 

 6              (iii)  From any criminal, dishonest, fraudulent
 7  or willful act or omission. This exclusion shall not apply
 8  to any insured person who did not personally participate in
 9  committing such an act or omission and who, upon having
10  knowledge of the act or omission, reported it;

11 

12              (iv)  From unlawful discrimination committed by
13  or for the insured person;

14 

15              (v)  From fines or penalties imposed by law;

16 

17              (vi)  From failure to maintain any type or amount
18  of insurance for managed property;

19 

20              (vii)  From bodily injury, personal injury,
21  advertising injury or property damage;

22 

23              (viii)  From management or sale of property in
24  which the insured or spouse has more than a ten percent

Page  5

 

 

 

 1  (10%) financial or ownership interest. This exclusion shall
 2  not apply for one (1) year from the date a property is
 3  acquired under a guaranteed sale listing contract if the
 4  property is listed for sale during that entire period;

 5 

 6              (ix)  From related business activities for which
 7  a license is not required under this chapter;

 8 

 9              (x)  From any violation of the Securities Act of
10  1933 as amended through July 1, 2001, or the Securities
11  Exchange Act of 1934 as amended through July 1, 2001, or
12  any state blue sky or securities law or similar state or
13  federal statutes;

14 

15              (xi)  From involvement in any real estate
16  investment contract or syndication as a partner, joint
17  venturer or underwriter;

18 

19              (xii)  From hazardous materials, nuclear
20  materials or pollutants;

21 

22              (xiii)  From prior wrongful act; or

23 

24              (xiv)  Standard exclusions.

 

Page  6

 

 

 

 1 

 2         33-28-405.  Group policy approval requirements.

 3 

 4  Any group policy to be issued shall conform to the
 5  standards and practices of the insurance industry and be
 6  approved by the department of insurance.

 7 

 8         33-28-406.  Optional coverage.

 9 

10  An active licensee who chooses the option of obtaining
11  errors and omissions insurance independently from a
12  provider other than the group carrier under contract with
13  the commission shall show evidence of coverage by providing
14  certification of coverage on a form prescribed by the
15  commission. The form shall show proof that the licensee has
16  coverage in compliance with the minimum standards
17  established by W.S. 33-28-407. The form shall be signed by
18  an authorized representative of the insurance company, and
19  shall contain a cancellation notification clause as
20  required by W.S. 33-28-409.

21 

22         33-28-407.  Standards for optional coverage.

23 

 

Page  7

 

 

 

 1         (a)  An insurer issuing insurance coverage under this
 2  article shall be an admitted carrier in Wyoming or in the
 3  state in which the licensee being certified resides.

 4 

 5         (b)  The insurance shall provide, at a minimum, not
 6  less than one hundred thousand dollars ($100,000.00) single
 7  limit liability coverage for each licensee for each
 8  occurrence or claim made, not including the cost of
 9  investigation or defense and an annual aggregate of five
10  hundred thousand dollars ($500,000.00) for each licensee,
11  not including the cost of investigation and defense. A
12  responsible broker may comply with this requirement by
13  certifying coverages of a minimum of five hundred thousand
14  dollars ($500,000.00) for each occurrence or claim made and
15  one million dollars ($1,000,000.00) annual aggregate, if
16  all licensees associated with the broker are covered.

17 

18         (c)  A person who resides in and is licensed in a
19  state that has a mandated program of errors and omissions
20  insurance and who is also licensed in Wyoming meets the
21  requirements for errors and omissions insurance in Wyoming
22  upon providing proof that the person meets the requirements
23  of the person's state of residence.

24 

 

Page  8

 

 

 

 1         33-28-408.  Time for filing of certification of
 2  optional coverage.

 3 

 4  Certification of optional coverage shall be filed with the
 5  commission by 5:00 p.m. on the date of expiration of
 6  coverage. If the certification is not filed on time, the
 7  commission shall place the license on inactive status on
 8  that date.

 9 

10         33-28-409.  Notification required for cancellation.

11 

12  If insurance under equivalent coverage is to be lapsed or
13  nonrenewed, the providing company shall notify the
14  commission of its intent to lapse or nonrenew a minimum of
15  thirty (30) days before the expiration date of the term.

16 

17         33-28-410.  Proof of insurance required to reactivate
18  license.

19 

20  A licensee whose license has been placed on inactive status
21  for failure to provide proof of insurance shall not conduct
22  any activities for which a license is required until proof
23  of insurance has been provided to the commission and the

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 1  license has been activated. The license shall be considered
 2  active as of the effective date of the insurance.

 3 

 4         33-28-411.  Authenticity of coverage.

 5 

 6  A licensee shall not willfully or knowingly cause or allow
 7  a certificate of coverage to be filed with the commission
 8  which is false, fraudulent or misleading.

 9 

10         33-28-412.  Errors and omissions coverage not required
11  if premium limit unobtainable.

12 

13  If the commission is unable to obtain errors and omissions
14  insurance coverage to insure all licensees who choose to
15  participate in the group program at a reasonable premium
16  not to exceed one hundred dollars ($100.00), the errors and
17  omissions insurance requirement of this article shall not
18  apply during the year for which coverage cannot be
19  obtained.

20 

21         Section 2.  This act is effective July 1, 2001.

22 

23                         (END)

 

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