INSURANCE RECO establishes and administers insurance requirements, which include consumer deposit protection. THREE VALUABLE INSURANCE COVERAGES RECO’s Insurance Program was introduced on September 1, 2000, to provide protection to both consumers and registrants. All registrants are required to participate in RECO’s Insurance Program, which consists of three valuable insurance coverages: • Consumer Deposit insurance protects consumers for loss of deposits caused by fraud, misappropriation of funds or insolvency by a registrant, and the risk of Social Engineering Fraud resulting in the misdirection of funds. • Errors and Omissions coverage provides protection for registrants in the event that errors and omissions committed in the course of their professional services lead to claims made against them. • Commission Protection coverage protects registrants from loss of commission caused by fraud, misappropriation of funds or insolvency of a brokerage. CLAIMS STATISTICS AND TRENDS Consumer Deposit Insurance Policy From inception of the Program on September 1, 2000, to December 31, 2017, there have been 77 Occurrences under the Consumer Deposit coverage. Payment of claims (settlements and expenses) under this coverage is estimated to reach $5,402,763. Commission Protection Insurance Policy From inception of the Program on September 1, 2000, to December 31, 2017, there have been 150 Occurrences under the Commission Protection coverage. Payment of claims (settlements and expenses) under this coverage is estimated to reach $6,692,443. Errors and Omissions Insurance Policy From inception of the Program on September 1, 2000, to December 31, 2017, there have been 14,726 claims reported. The estimated total cost of claims settlements and expenses under this coverage is estimated to reach $147,914,059*. * This figure does not include any provision for the insurer’s internal administrative expenses or further development on claims not yet finalized or reported. 30/ RECO 2017 ANNUAL REPORT/BY THE NUMBERS