N.M. Admin. Code § 16.61.5.10

Current through Register Vol. 35, No. 19, October 8, 2024

Section 16.61.5.10 - EQUIVALENT ERRORS AND OMISSIONS INSURANCE POLICIES

New Mexico real estate associate broker or qualifying broker applicants may obtain errors and omissions coverage equivalent to the group plan from any insurance carrier subject to the following terms and conditions.

A. The insurance carrier is licensed and authorized by the New Mexico department of insurance to write policies of errors and omissions insurance in this state and is in conformance with all New Mexico statutes.

B. The insurance provider maintains an A.M. Best rating of "B" or better.

C. The policy, at a minimum, complies with all relevant conditions set forth in this rule and the insurance carrier so certifies in a certificate issued to the insured real estate broker or broker applicant in a form acceptable to the commission and agrees to immediately notify the commission of any cancellation or lapse in coverage. The commission will make no independent determination of whether equivalent policies meet the requirements of Part 5.

D. 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.

E. Coverage cannot be cancelled by the insurance provider except for nonpayment of premium or in the event a broker becomes inactive or the license is revoked, or in the event an applicant is denied a license.

F. Coverage is for not less than $100,000 for each licensed individual and entity per covered claim and not less than a $500,000 aggregate limit per licensed individual or entity.

G. A deductible amount for each claim of not more than $1,000.

H. 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.

I. The obligation of the insurance carrier to defend all covered claims with defense costs outside of policy limits.

J. Coverage of a broker's use of lock boxes which may include a sublimit of not less than $5,000 per claim for property damage or loss of use of property arising from a lock box claim.

K. Real estate brokers or broker applicants who obtain equivalent coverage and wish to be on active status must present to the commission the certificate referred to in 16.61.5.10 NMAC:

(1) when renewing an active license, no later than at the time of renewal; or

(2) upon any request for reinstatement or activation of a license; or

(3) upon application for an active license.

L. An automatic 90-day extended reporting period with the ability of the broker, upon payment of an additional premium, to obtain an optional extended reporting period of one, two, or three years.

N.M. Admin. Code § 16.61.5.10

16.61.5.10 NMAC - N, 1-1-2002; A, 1-1-2006, Amended by New Mexico Register, Volume XXVII, Issue 22, November 30, 2016, eff. 1/1/2017