| SYNOPSIS: | Under existing law, real estate licensees are required to purchase errors and omissions insurance, but the premium for the insurance may not exceed $100 per year. The Real Estate Commission is required through competitive bidding to make the insurance available through a group policy with an insurance provider having a rating in A.M. Best of A or better. |
| This bill would increase the limit on the premium for the insurance to $250 per year and would authorize the A.M. Best rating of the insurance provider to be A minus or better. |
To amend Section 34-27-35.1, Code of Alabama 1975, relating to the Real Estate Commission, to further provide for the group policy for errors and omissions insurance of real estate licensees.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Section 34-27-35.1, Code of Alabama 1975, is amended to read as follows:§34-27-35.1.
"(a) All real estate licensees, except those whose license is on inactive status with the commission shall, as a condition to holding an active license, carry errors and omissions insurance to cover activities contemplated under Chapter 27 of Title 34.
"(b) The Real Estate Commission shall make the insurance required under this section available to all licensees by contracting with an insurance provider having a current rating in A.M. Best of A A minus or better for a group policy, after competitive bidding in accordance with applicable Alabama Law, except that no bid shall be accepted by the commission of any insurance provider having a current or former member of the Alabama Real Estate Commission or spouse thereof in the employment of that provider.
"(c) Any policy obtained by the commission must be available to all licensees with no right on the part of the insurance provider to cancel.
"(d) All licensees shall have the option of obtaining errors and omissions insurance independently, provided that the coverage so obtained complies with the minimum requirements established by the commission. Those who choose this option shall show compliance by providing a certificate of coverage and filing it with the commission office.
"(e) The commission shall determine and set the terms and conditions of coverage mandated under this section, including but not limited to the minimum limits of coverage, the deductible, and exclusions from coverage, and that the total premium shall not exceed one hundred dollars ($100) two hundred fifty dollars ($250) per year.
"(f) Each licensee shall be notified of the required terms and conditions of coverage for the policy at least thirty (30) days before his or her license is to be renewed. Proof of coverage shall be furnished to the commission on or before August 31 of the final year of each license period in order for the respective license to be renewed on a timely basis. Failure to meet this deadline shall result in the license being placed on inactive status on the following October 1, and the license shall be subject to all reactivation requirements. Reactivations shall be processed in the order received as evidenced by postmark or delivery date. Certified or registered mail shall not be used for reactivation in this case.
"(g) If the commission is unable to obtain errors and omissions insurance coverage to insure all licensees who choose to participate in the program as prescribed in subsection (e), the requirement of insurance coverage under this section shall be void during the applicable contract period.
"(h) The errors and omissions insurance coverage required by this section shall become effective as a condition of license issuing or renewal on October 1, 1993. Failure by any licensee to obtain such coverage shall result in his or her license being issued or renewed on inactive status.
"(i) The Alabama Real Estate Commission is hereby authorized to promulgate and implement such administrative rules and regulations in accordance with the state Administrative Procedures Act as shall be necessary, from time to time, to carry out the provisions of this section."
Section 2. This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.