Wyo. Code R. 018-0002-3
Effective Date: 10/27/2007 to 02/24/2008
Rule Type: Expired Emergency Rules & Regulations
Reference Number: 018.0002.3.10272007
Effective July 1, 2007
Errors and Omissions Insurance Real Estate Commission Rules and Regulations
For the 120 days the emergency rules are in effect, the following rules shall apply.
Section 1. Authority. Pursuant to the authority vested in the Wyoming Real Estate Commission by virtue of W.S. 16-3-101 through 16-3-115 (W.S. 1977 as amended) and W.S. 33-28-101 through 33-28-401 (W.S. 1977 as amended) the following rules and regulations are hereby promulgated.
Section 2. Applicable. Effective at a licensee’s next renewal date, but no later than March 1, 2009, every Wyoming real estate broker, associate broker and salesman shall provide proof of errors and omissions insurance which meets the criteria established by these rules.
Section 3. Definitions. When used in this chapter, unless the context otherwise requires:
(a) “Aggregate limit” means a provision in an insurance contract limiting the maximum liability of an insurer for a series of losses in a given time period, such as the policy term.
(b) “Equivalent coverage” means coverage obtained independently of the group plan available from the commission and subject to the terms and conditions as set forth in this chapter.
(c) “Errors and Omissions Insurance” means a type of professional liability insurance that provides insurance coverage to holders of active Wyoming real estate brokers, associate brokers and salesman licenses for errors and omissions made during the course of real estate transactions, subject to the coverages, limitations, and exclusions of the specific insurance policy or policies in place.
(d) “Extended reporting period” means a designated period of time after a claims-made policy has expired during which a claim may be made and coverage triggered as if the claim has been made during the policy period.
“Licensee” means any active individual broker, associate broker, or salesman.
(f) “Prior acts coverage” means claims that are made during a current policy period, but the act or acts causing the claim or injuries for which the claim is made occurred prior to the inception of the current policy period.
(g) “Proof of coverage” means a certificate of insurance.
(h) “Qualified insurance carrier” means an insurance carrier.
(i) Which for the entire term of its contract shall provide the group plan of errors and omission insurance contemplated by these rules, maintains an A.M. Best rating of “B” or better and financial size category of class VI or higher;
(ii) Which shall remain for the policy term authorized by the Wyoming insurance department to do business in Wyoming as an insurance carrier;
(iii) Which is and will remain for the policy term qualified and authorized by the Wyoming insurance department to write policies of errors and omissions insurance in Wyoming of the type contemplated by these rules;
(iv) Which after competitive bidding, has been notified by the commission that it is the successful bidder for the group plan to provide the errors and omissions insurance contemplated by these rules; and
(v) Which has entered into a contract to provide said group errors and omissions plan in conformity with said contract, these rules, and the Wyoming license law;
(vi) Which will collect premiums, maintain records, and report names of those insured and a record of claims to the commission on a timely basis;
(i) “Retroactive date” means the date when the first real estate errors and omissions coverage was effective insuring the named insured on a claims-made basis and since which time the insured has been continuously insured.
(j) “Single-limit liability” means the maximum limit payable, per licensee, for damages arising out of the same error, omission, or wrongful act.
Section 4. Insurance required. An applicant for issuance of a license on active status, a licensee renewing a license, or an inactive licensee activating a license must submit proof of insurance coverage through the group plan or through certification of equivalent coverage.
Section 5. Minimum standards. The group policy obtained by the commission shall provide to each individual licensee, at a minimum, the following terms of coverage:
(a) Not less than one hundred thousand dollars single-limit liability coverage for each licensee per occurrence or claim made, not including costs for investigation or defense;
(b) An annual aggregate limit of not less than five hundred thousand dollars per licensee;
(c) A deductible amount for each occurrence of not more than one thousand dollars for single-limit liability coverage and one thousand dollars maximum additional deductible for defense and investigation;
(d) An extended reporting provision of ninety days and an option to purchase an additional three years extended reporting provision for a premium not to exceed two hundred percent of the premium charged for the last year of the terminating coverage;
(e) Coverage under this section for covered acts in any state, United States territory, or Canada in which a covered individual, domiciled in Wyoming, holds a license;
(f) A conformity endorsement allowing a Wyoming resident licensee to meet the errors and omissions insurance requirement for an active license in another group mandated state without the need to purchase separate coverage in that state;
(g) Stacking of benefits;
(h) Proration of premiums for coverage that is purchased during the course of a calendar year but with no provision for refunds of unearned premiums;
(i) The ability of a licensee, upon payment of an additional premium, to obtain higher or excess coverage or to purchase additional coverages from the group carrier as may be determined by the carrier;
(j) The coverage is individual and license-specific and will cover the licensee regardless of changes in employing broker; and
(k) Prior acts coverage shall be offered to licensees with continuous past coverage.
(a) Except as provided in this section, coverage may not exclude claims brought against the insured licensee arising out of an act or failure to act by the licensee when performing a professional service for which a real estate license is required. Coverage may limit or exclude claims brought against a licensee which arise as follows:
(i) Out of claims or suits made or brought by any insured person against any other insured person within the same firm or from compensation disputes between licensees;
(ii) Out of loss assumed under contract or agreement, except for liability the insured would have had in the absence of such agreements;
(iii) From any criminal, dishonest, actual fraud, or willful act or omission. This exclusion does not apply to any insured person who did not personally participate in committing such an act or omission and who, upon having knowledge of the act or omission, reported it;
(a) Any group policy to be issued must conform to the standards and practices of the insurance industry and be approved by the Wyoming insurance department.
(a) An active licensee who chooses the option of obtaining errors and omissions insurance independently from a carrier other than the group carrier under contract with the commission must show evidence of coverage by providing certification of coverage on a form prescribed by the commission. The form must show proof that the licensee has coverage in compliance with the minimum standards established by section 9. The form must be signed by an authorized representative of the insurance company and must contain a cancellation notification clause as required by section 11.
(a) Licensees or applicants may obtain errors and omissions coverage independent of the group plan from any insurance carrier subject to the following terms and conditions:
(i) The insurance carrier is licensed and authorized by the Wyoming insurance department to write policies of errors and omissions insurance in this state and is in conformance with all Wyoming statutes.
(ii) The insurance provider maintains an A.M. Best rating of 'B' or better and Financial size category of class VI or higher.
(iii) The policy, at a minimum, complies with all relevant conditions set forth in this rule and the insurance carrier so certifies in an affidavit issued to the insured licensee or applicant in a form specified by the commission and agrees to immediately notify the commission of any cancellation or lapse in coverage. Independent coverage must provide, at a minimum, the following:
(A) The contract and policy are in conformance with all relevant Wyoming statutory requirements.
(B) Coverage includes all acts for which a real estate license is required, except those illegal, fraudulent or other acts which are normally excluded from such coverage.
(C) Coverage cannot be canceled by the insurance provider except for nonpayment of premiums or fraud.
(D) Coverage is for not less than $100,000 for each licensed individual and entity per covered claim, regardless of the number of licensees or entities to which a settlement or claim may apply, with an annual aggregate limit of not less than $500,000 per licensed individual and entity.
(E) Payment of claims by the provider shall be on a first dollar basis and the provider shall look to the insured for payment of any deductible.
(F) The ability of a licensee, upon payment of an additional premium to obtain an extended reporting period of not less than 365 days.
(G) That the provider of the independent policy has executed an affidavit in a form or manner specified by the commission attesting that the independent policy is in force and, at a minimum, complies with all relevant conditions set forth herein and that the provider will immediately notify the commission in writing of any cancellation or lapse in coverage of any independent policy.
(iv) Licensees or applicants who obtain equivalent coverage and wish to be on active status must present the affidavit referred to in subsection (iii) of this section to the Commission:
(i) When renewing an active license, no later than at the time of renewal; or
(ii) Upon any request for reinstatement or activation of a license; or
(iii) Upon application for an active license.
(b) Applicants for licensure, activation, renewal and reinstatement shall certify compliance with this rule on forms or in a manner prescribed by the commission. Any active licensee who so certifies and fails to obtain errors and omissions coverage or to provide proof of continuous coverage, either through the group carrier or directly to the commission, shall be placed on inactive status:
(i) Immediately, if certification of current insurance coverage is not provided to the commission; or,
(ii) Immediately upon the expiration of any current insurance when certification of continued coverage is not provided.
Section 10. Time for filing certification of equivalent coverage. Certification of equivalent coverage must be filed with the commission by five p.m. on the date of expiration of coverage. If the certification is not filed on time, the commission shall place the license on inactive status on that date.
Section 11. Nonpayment of premium. If a licensee’s insurance company or group plan notifies the commission that a licensee has not paid a premium, the commission shall place that license on inactive status as of the date of termination of coverage.
(a) When a licensee receives notice of being placed on inactive status for failure to provide proof of insurance, the licensee shall immediately surrender the license to the commission.
(a) If insurance under equivalent coverage is to lapse or not be renewed, the providing company must notify the real estate commission of the intent to lapse or not to renew, a minimum of thirty days before the expiration date of the term.
(a) A licensee whose license has been placed on inactive status for failure to provide proof of insurance may not conduct any activities for which a license is required until proof of insurance has been provided to the commission and the license has been activated. The license shall be considered active as of the effective date of the insurance.
(a) A licensee may not willfully or knowingly cause or allow a certificate of coverage to be filed with the commission that is false, fraudulent, or misleading.