Part 4 - Errors and Omissions Insurance

Division 1 - Requirements for Real Estate Brokers

Definitions

111 (a) This Division applies to all classes of real estate brokers and includes a brokerage, broker, associate broker and associate.
  (b) In this Division, “Real Estate Insurance Exchange Agreement” means an agreement entered into between brokerages, brokers, associate brokers and associates providing for the establishment and administration of an insurance or indemnity plan referred to in Rule 113.
  Resolution 2011-2

Duty to Carry Insurance
112 Every brokerage, broker, associate broker and associate shall:
(a) obtain insurance against liability for errors and omissions in the carrying on of the real estate business; or
(b) participate in an indemnity plan for that purpose;
in accordance with these Rules and through the insurance or indemnity plan or the group insurance plan referred to in Rule 113.
  Oct 1/06

Establishment of Plans
113 For the purpose of providing the insurance coverage referred to in Rule 112, the Council is, subject to these Rules, authorized to establish and administer:
(a) an insurance or indemnity plan under Rule 114; or
(b) a group insurance plan under Rule 115.
  Oct 1/06

Insurance or Indemnity Plan
114(1) The insurance or indemnity plan referred to in Rule 113 shall operate through a reciprocal insurance exchange to be known as the “Real Estate Insurance Exchange,” established pursuant to the Real Estate Insurance Exchange Agreement and licensed under the Insurance Act.
114(2) The insurance or indemnity plan shall be administered by an advisory board in accordance with the Real Estate Insurance Exchange Agreement.
  Resolution 2015-3
114(3)

The advisory board shall consist of at least five members, all of whom must be brokers, associate brokers or associates.

  Resolution 2016-1
114(4) The Real Estate Insurance Exchange shall make the insurance required by Rule 112 available to brokerages, brokers, associate brokers and associates by means of an insurance policy, on payment of any premiums established in accordance with this section.
114(5) All matters:
(a) necessary and incidental to the establishment and administration of the insurance or indemnity plan;
(b) respecting the appointment, operation, powers and duties of the advisory board; and
(c) respecting the nature and extent of the insurance provided through the plan and respecting the rights and obligations of persons under the insurance policy and in the administration of it;
may be provided for in the Real Estate Insurance Exchange Agreement and the insurance policy.
114(6) The form and content of the Real Estate Insurance Exchange Agreement and the insurance policy, both as amended or replaced from time to time, are subject to the approval of the Council.
114(7) A brokerage shall maintain at every office operated by the brokerage for the purpose of trading in real estate a copy of:
(a) the Real Estate Insurance Exchange Agreement;
(b) the insurance policy; and
(c) all significant documentation of a general nature that relates to the application, interpretation or administration of the Agreement or the insurance policy;
and shall make the Agreement, insurance policy and documentation available for examination by the brokerage’s brokers, associate brokers and associates.
  Oct 1/06

Group Insurance Plan
115(1) Where the Council wishes to establish and administer a group insurance plan referred to in Rule 113, it may enter into:
(a) agreements with insurers, brokerages, industry members or adjusters within the meaning of the Insurance Act, or with any other person; and
(b) agreements with or on behalf of brokerages, brokers, associate brokers and associates;
that it considers necessary for the establishment and administration of the group insurance plan.
115(2) All matters:
(a) necessary for and incidental to the establishment and administration of the group insurance plan; and
(b) respecting the nature and extent of the insurance provided through the plan and respecting the rights and obligations of persons under the insurance plan and in the administration of it;
may be provided for in the agreements referred to above and the group insurance policy.
115(3) The form and content of any agreements referred to above and of any group insurance policy, both as amended or replaced from time to time, are subject to the approval of the Council.
115(4) The Council may charge a fee for administration relating to the establishment and administration of the group insurance plan and for loss control activities in an amount to be approved by the Council.
  Oct 1/06

Notification of Contravention
116 The advisory board, in the case of an insurance or indemnity plan referred to in Rule 114, or the administrator of the group insurance plan, in the case of a group insurance plan referred to in Rule 115, shall immediately on becoming aware of a contravention by a brokerage, broker, associate broker or associate of these Rules or a term or condition of an insurance or indemnity plan or group insurance plan:
  (a) notify the brokerage, broker, associate broker or associate who is in contravention; and
  (b) where a broker, associate broker or associate  is in contravention, notify the brokerage who employs the broker, associate broker or associate.
  Oct 1/06


Continue with Part 4 Division 2 - Requirements for Mortgage Brokers

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