Leaders from the Tennessee Association of REALTORS® along with TAR’s Governmental Affairs Team helped save a major program at the June Tennessee Real Estate Commission meeting. TREC Commissioners have been working hard to help stem the problem of Real Estate Licensees failing to maintain mandatory errors and omissions insurance. While many Licensees comply with state law TREC has had to dole out hundreds of thousands of dollars in fine to both Licensees and their Principle Brokers over the past several years.
In an effort to help Licensees maintain E&O insurance coverage, TREC Commissioners considered a proposal to have policies run concurrent with an individual’s Real Estate License. While it may seem easier to just need to remember one date to renew both, TAR was worried of some unintended consequences.
Following discussion with the TAR’s Executive Committee, TAR President Sue Turner penned a letter to the Commission with several concerns. These included:
- Increased costs for Licensees;
- Increased administrative issues for Principle Brokers making sure their agents are in compliance;
- Difficulty in obtaining firm excess policies;
- Increased risk for insurance companies, forcing them to pass costs onto Licensees and firms; and
- The potential of the elimination of E&O insurance requirements in state law, putting more Licensees in danger of being sued.
TREC allowed TAR to testify at the meeting and further explain our concerns. Other insurance companies also testified and helped back up TAR’s position while also relaying their own industry specific concerns.
In the end, TREC Commissioners thankfully agreed with many of our concerns and decided to essentially keep the program we’ve had in Tennessee over the past two years in place. TREC is putting out bids so it cannot yet be said what the state group E&O insurance program will look like but let this be an early reminder that E&O policies expire on December 31, 2012. You must renew your E&O insurance PRIOR to December 31st or you will be subject to stiff fines and face losing your Real Estate License.
Also at the meeting there were two new rules passed. TAR’s Governmental Affairs Department did not see anything harmful in these rules to REALTORS® and hope they will benefit the industry and the Commission in the future.
Lastly, congratulations to Commissioners William “Bear” Stephenson of Clinton, TN and Michelle Haynes of Gallatin, TN in being elected to serve as Commission Chair and Vice-Chair, respectively. Thank you to Isaac Northern, Jr. of Memphis, TN for his service as Chairman this past year. It has been great working with him and the entire Commission and we look forward to what we hope to be another year of success for TAR and TREC.
Thank you to the TAR membership for their support and grassroots efforts on the governmental affairs side of TAR. Stay tuned for our end of the legislation session wrap-up soon.