If you've designated an insurance broker to receive insurance quotes and manage policies on your behalf, that person will be the broker of record. He or she has the sole authority to obtain and evaluate insurance quotes and negotiate terms with insurance companies. Only one person can be the broker of record according to Investopedia. If you wish to hire a new broker, you'll need to follow the industry-standard mechanism for replacing your current broker of record with a new one.
TL;DR (Too Long; Didn't Read)
An insurance broker who has the exclusive authority to negotiate with insurance companies on your behalf is known as the broker of record.
What Is a Broker of Record?
While insurance companies rely on insurance brokers to bring them customer accounts for evaluation, they don't want numerous brokers to make inquiries about the same account. This would duplicate effort as the company's underwriters would have to quote the same risk to several brokers. So, the insurance company will only recognize one broker to do business with on any given risk. This person is known as the broker of record. The broker of record has the exclusive authority to receive quotes, communication, notices and policies on behalf of the policyholder.
Who is the Broker of Record?
Typically, the broker of record is the broker who first submits a customer account to the insurance company says Hope Aviation. The company will assume this person is your first choice of a broker unless there is evidence that you prefer someone else. What this means is, you may become tied to one insurance broker without realizing it. Suppose for example, that your insurance policy is due for renewal and you decide to seek a competing proposal through another insurance broker. The second broker will be blocked from getting quotes if your current broker has already contacted the major companies in the market and made inquiries on your behalf. That's because your current broker will be listed as the broker of record.
Can I Change the Broker of Record?
The choice of broker is entirely yours. If you are unhappy with the performance of your current broker or are confident that another broker can bring more to the table in a specific area of risk, then you can change the broker of record (BOR). Under current BOR insurance requirements, you do this by signing a broker of record change form, which is sometimes called an ACORD agent of record change form. ACORD is the Association for Operations Research and Development, a nonprofit agency that develops the universal standards and documentation that all insurance companies adhere to. The change of broker form, available online, is known as ACORD form 36.
How Many Brokers Can You Appoint?
The agent of record change provides a seamless transition from one broker to the next for some or all of your insurance requirements. You can either assign a single BOR to negotiate all your insurance commitments, or you can assign a competing broker to negotiate with the one or more named insurance companies while leaving the other insurers open for your current broker to work with. There is space on the form for you to list all the policies that you wish the new broker of record to inherit. The choice is up to you.
Consequences of Signing an Agent of Record Change Form
Once signed, the agent of record change form terminates the relationship between you and your current broker and removes permission for him or her to negotiate with the insurance company. It confirms the appointment of a new broker and gives him or her the exclusive ability to negotiate with the insurance company for you. Where there are underwriting decisions that are already on the table, the new BOR will inherit those commitments. Be aware that the insurance company will notify your current broker of the rescission form. While you don't have to speak to the old broker, it's professional courtesy to notify him or her of the termination and agree to an amicable change of representation.
Jayne Thompson earned an LL.B. in Law and Business Administration from the University of Birmingham and an LL.M. in International Law from the University of East London. She practiced in various “Big Law” firms before launching a career as a business writer. Her articles have appeared on numerous business sites including Typefinder, Women in Business, Startwire and Indeed.com.