REEOIC 2025/26 Annual Report

By Chris Johnston, Chief Executive Officer
June 2026

Building on the strong performance from previous years, E&O’s 2025/26 fiscal year (ending March 31, 2026) has been another year of positive developments for E&O and you as insureds. 

Some highlights from this past year include:

• Rolling out and growing our E&O Cyber Guard program – with the March 2025 launch of our new free E&O Cyber Guard program, we added more value to licensees with this suite of loss prevention tools powered by DynaRisk. The tools are designed to provide agents and brokerages with cyber security protection and help them avoid becoming the victim of cybercrimes that may lead to claims against them. We have already had some success stories from those who have used the tools and avoided IT trouble.
• Strong financial performance for the 2025/26 year – E&O remains in a strong financial position for the year ending March 31, 2026, as seen in our financial statements audited by KPMG. This performance enabled E&O to reduce annual fees to $250 annually, starting on April 1, 2026.
• KPMG reports that the financial statements “present fairly, in all material respects, the financial position of the Corporation as at March 31, 2026, and its financial performance and its cash flows for the year then ended in accordance with IFRS Accounting Standards.”

Growing surplus provides protection for licensees

This past fiscal year, E&O recorded comprehensive income of $8,012,024 and increased the accumulated surplus by almost 12% to $76,360,338. This surplus acts as a premium stabilization fund that will be a buffer in the event our claims experience changes for the worse such as higher claims frequency, severity, or a run on expensive claims or multi-property claims.

Highlights for this year include:

• Reduced Liability for Incurred Claims – there was a slight drop in the Liability for Incurred Claims (“LIC”), which is the actuary’s estimate of the cost that will be incurred, in addition to the amounts already paid out, to eventually close all claims that were open as of March 31, 2026.
• Strong investment performance – the value of investments in the Insurance Fund increased from $92.2 million last year to $99.5 million (almost 7%). These investments are currently managed by Phillips, Hager & North, Connor Clark & Lunn, and Crestpoint professional investment managers, pursuant to our investment policies and procedures that set out clear investment objectives that are consistent with the “prudent investor rule” as required by the Real Estate Services Act, SBC 2004, chapter 42.

REEOIC Annual Report

We continue to follow the capital management framework put in place by the Board of Directors in 2022, including the preparation of a Capital Target Guideline Analysis each year. This sophisticated capital management and decision-making tool assists E&O in establishing surplus thresholds based on our unique risk profile and tolerance. 

The Board of Directors used this framework in enacting the fee reductions that went into effect on April 1, 2023; the increase in coverage limits from $1 million to $2 million on April 1, 2024; and the further fee reduction on April 1, 2026 from $315 to $250 per year. The Board of Directors will use this framework again this coming year in making decisions on fees and other program enhancements.

In assessing the adequacy of its capital, E&O must comply with regulatory requirements and measurements. Our regulator, BCFSA, measures the adequacy of capital in relation to the risks associated with our business through the Capital Target Guideline Analysis prepared annually by our actuaries.

Claims show promising trends

Frequency of claims was up slightly this past year, with 266 new claims reported. However, claims volume remain below historical averages. This is likely due in part to BC real estate markets that have been quieter over the past year or more. A reduction in the number of transactions is likely one reason for the drop in claims volume as historically there’s a correlation between the number of claims and the number of transactions.

With more than 12,000 claim files closed since 1988, E&O has spent more than $126 million to defend and indemnify licensees during this time. That money is spent very judiciously given that of the approximately 3,200 claims that were opened since January 1, 2014 (and are now closed):

• 64% were closed without any indemnity paid to claimants by E&O;
• 20% resulted in legal expenses only; and
• 16% involved indemnity payments by E&O (see chart).

Currently there are:

• 479 open claim files, with 80% of those in litigation.
• 87% of the litigation claims are in Supreme Court, with the remaining 13% in Provincial Court or the Civil Resolution Tribunal (CRT). This trend over the last few years of an increase in Supreme Court claims is likely due to inflation and the amount of damages exceeding the $35,000 monetary limit of Provincial Court. 

Types of claims

Over the past year, 45% of the claims reported against licensees were for misrepresentation (see chart). These claims tend to be a mixed bag of issues but this past year the claim types that stood out because of either frequency or severity were for:

• Lot size
• No permits
• Sale of business
• Illegal suites
• Issues with contract drafting
• Taxes/GST
• Valuations

Resources to avoid claims

Managing Brokers looking for assistance in helping their licensees to avoid claims have several resources to go to including:

• E&O Risk Reports
• E&O Managing Broker Supports
• BCREA’s Managing Broker’s Support Line (for BCREA members, password is required)
• BCFSA’s Practice Standards Advisors

E&O’s staff lawyers are also available to do loss prevention talks for brokerages, boards, etc. Please email reception@reeoic.com if you would like to book one of our lawyers to do a talk for your licensees.

Coverage overview

E&O has been the mandatory self-insurance program providing errors and omissions insurance to all real estate licensees in BC since 1988. Our mission statement is to provide cost-effective professional liability insurance, loss prevention tools and legal support services for the protection of real estate licensees and thereby the public.

The terms of coverage are set out in the Indemnity Plan, published annually with a policy year that begins on April 1. The current Indemnity Plan is RE0426. Annual fees are currently $250 per year, paid every two years on license renewal.

Further information on your insurance coverage can be found in the E&O FAQs.