NominatingVolunteer skill setsmake committees effectiveSheila Young, AACI, FellowChair, Nominating CommitteeThe Nominating Committee is the leadershipdevelopment committee <strong>of</strong> the<strong>Appraisal</strong> <strong>Institute</strong> <strong>of</strong> <strong>Canada</strong> (AIC). Ithelps the <strong>Institute</strong> achieve its goals, and providesnetworking opportunities and personal developmentfor members.AIC is blessed with many great volunteers;people who give their time to help the pr<strong>of</strong>ession.Volunteers do that through a variety <strong>of</strong>activities, <strong>of</strong>ten sitting on national AIC committees.The national committees have terms<strong>of</strong> reference which are approved by the Boardand which detail the number <strong>of</strong> members onthe committee and the length <strong>of</strong> time a volunteercan serve on the committee. The terms <strong>of</strong>reference are in place to provide guidance to thecommittees.‘Volunteer Corner’ is on AIC’s website athttp://www.aicanada.ca/cmsPage.aspx?id=245This section <strong>of</strong> the website lets you know theknowledge and skills AIC committees require <strong>of</strong>their members, and tells you how to submit anexpression <strong>of</strong> interest. Some committees, likeInvestigating or Adjudicating, require expertappraisers from all sectors <strong>of</strong> the pr<strong>of</strong>ession.Others, like Learning Advisory or Marketing andCommunications, are looking for experience incourse development or marketing a small business;skills that you may have developed outside<strong>of</strong> your work as a valuation pr<strong>of</strong>essional. There isa volunteer opportunity in AIC that fits your skillsand abilities and provides you with a chance tonetwork and grow.In the spring, the Nominating Committeereviews the expressions <strong>of</strong> interest submittedby members; matching volunteers to vacancies.The Nominating Committee asks the Board toapprove the volunteer selections at the JuneBoard meeting.New this year is the 360-degree evaluation.Committee members and committee chairs willbe asked to evaluate the effectiveness <strong>of</strong> theircommittee, to comment on their experiences,and to <strong>of</strong>fer suggestions for improvement.By putting yourself at the forefront <strong>of</strong> theAIC’s advocacy, policy initiatives and other importantwork, you will open the door to invaluablenetworking opportunities while honing yourleadership, teamwork and communications skills.The advantages <strong>of</strong> active AIC participationare far reaching. You will not only be benefitingyourself, but also your firm and the pr<strong>of</strong>ession inwhat amounts to a win-win-win arrangementfor everyone involved.Nominating CommitteeSheila Young, AACI, Fellow – ChairGrant Uba, AACIDan Jones, AACIRobert Tipple, AACI, FellowGeorge Semine, AACIGeorge Ward, AACITo contact this committee, emailnominating@aicanada.ca34Canadian Property Valuation Volume 54 | book 4 | 2010 Évaluation Immobilière au <strong>Canada</strong>click here to return to table 0f contents
InsuranceThe Pr<strong>of</strong>essionalLiability Insurance ProgramIt is that time <strong>of</strong> year again when <strong>Appraisal</strong><strong>Institute</strong> <strong>of</strong> <strong>Canada</strong> (AIC) members receivetheir pr<strong>of</strong>essional liability insurance invoicesfor the 2011 policy year. This usually raises a lot<strong>of</strong> questions from the membership about theinsurance program and how it is working.The AIC’s pr<strong>of</strong>essional liability insurance providesmembers with protection against claimsresulting from any errors and omissions madein the rendering <strong>of</strong> pr<strong>of</strong>essional services.As defined in the policy, pr<strong>of</strong>essionalservices means real estate appraisal services,including opinions and/or counselling whichmembers are qualified and authorized by the<strong>Institute</strong> to provide. This includes real propertyappraisals and related consulting servicesthat are defined within the Canadian UniformStandards <strong>of</strong> Pr<strong>of</strong>essional <strong>Appraisal</strong> Practice.The insurance policy is provided byTravelers Guarantee Company <strong>of</strong> <strong>Canada</strong> andreinsured through First Pr<strong>of</strong>essional LiabilityInsurance Company, a wholly owned subsidiary<strong>of</strong> the <strong>Institute</strong>.The policy provides members with up to $2million per claim in the aggregate annually andhas an annual member aggregate claim limit <strong>of</strong>$20.5 million.Why mandatoryThe <strong>Institute</strong>’s pr<strong>of</strong>essional liability insuranceprogram is mandatory for all active members. Themandatory nature <strong>of</strong> the program makes it costeffective and enables members to benefit fromeconomies <strong>of</strong> scale. Moreover, as a true memberinsurance program, it guarantees coverage for allmembers in good standing. No member in goodstanding can be denied insurance as is the case withother types <strong>of</strong> insurance programs. The programstrives to promote high quality practice standardsand implement effective claims prevention andmanagement strategies to keep insurance costs low.Costs and claimsInsurance premiums are actuarially determinedand reflect historical and forecast claims andother risk factors. In recent years, as a result <strong>of</strong>the downturn in the real estate market, both thenumber and severity <strong>of</strong> claims has increased substantially.The multi-year trend is shown belowand it has had a significant negative impact onthe insurance program, requiring an increase ininsurance premiums to the members.The increase for 2011 has been held to anaverage <strong>of</strong> about 10% for all member categories.It is important to note that, notwithstandingthis increase, the insurance levies in 2011 arelower than they were in both 2003 and 2004.Overall, the average annual increase across allmember categories has been 2.2%.For further information, please go to themembers’ section <strong>of</strong> the AIC website http://www.aicanada.ca/cmsPage.aspx?id=100$3,500Insurance Levies by Member Category$3,000$2,500$2,000$1,500$1,000$500$02003 2004 2005 2006 2007 2008 2009 2010 2011AACI CRA CANClaims and Severity by Year70605040$160,000$140,000$120,000$100,000*2010 Data incomplete $80,00030$60,000201002003 2004 2005 2006 2007 2008 2009 2010$40,000$20,000$0$8,000,000$7,000,000$6,000,000$5,000,000$4,000,000$3,000,000$2,000,000$1,000,000$0Average Claim Cost Number <strong>of</strong> ClaimsCost <strong>of</strong> Claims2003 2004 2005 2006 2007 2008 2009 2010We asked the insurance program’s actuary about the program’s performance:What has been the trend over the last seven years? Claim severity has increased significantly and that is the reason why premium increases have been necessaryHow have the claims been distributed by member class? Claims have increased across all member classes.How does the increased number <strong>of</strong> claims in our industry compare with other pr<strong>of</strong>essions? The amount <strong>of</strong> claims in your industry is cyclical and highly correlatedwith the real estate market. Currently, your industry is hard hit by E&O claims.Can we expect the premiums to go up again in the next few years? This trend will continue, unless the real estate market has a sustained recovery.click here to return to table 0f contentsCanadian Property Valuation Volume 54 | book 4 | 2010 Évaluation Immobilière au <strong>Canada</strong> 35