Alaska Administrative Code
Title 12 - Professional Regulations
Part 1 - Boards and Commissions Subject to Centralized Licensing
Chapter 02 - General Occupational Licensing Functions
Article 4 - Real Estate Errors and Omissions Insurance
12 AAC 02.510 - Minimum standards
Universal Citation: 12 AK Admin Code 02.510
Current through February 24, 2025
(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 $300,000 per licensee;
(3) a deductible amount for each covered
wrongful act of not more than $5,000 for every $300,000 annual aggregate limit
of liability; an additional deductible for investigation and defense costs may
be considered;
(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 200 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 or changes in the business relationship between a real
estate broker and 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 prior claims experience if known, date of claim, amount paid, nature of
claim, and claims information on a quarterly basis or an annual basis or on
request by the Real Estate Commission.
Authority:AS 08.88.172
Disclaimer: These regulations may not be the most recent version. Alaska may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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