Agent of record letter 2024 (guide, FAQs & free samples)

Have you ever heard of an Agent of Record letter?

If not, you’re not alone!

While this legal document plays a crucial role in the insurance industry, it’s often overlooked by many policyholders and agents.

To illustrate the importance of Agent of Record letters, let’s imagine you’re planning a trip to a foreign country.

You hire a local guide to show you around and ensure you don’t miss any of the best sights and experiences.

But before you arrive, you discover that your guide has been replaced by a new one without your knowledge or consent.

This new guide may not know your preferences, may not speak your language fluently, and may not have the same level of expertise as the first one.

This scenario may sound unlikely or even far-fetched, but it’s closely parallel to what can happen when your insurance agent or broker changes without your awareness or consent.

An Agent of Record letter in the insurance industry allows you to designate a specific agent or broker to act as your representative for a given policy.

This not only ensures that your interests are protected, but also helps to avoid any confusion or errors that can occur when multiple parties are involved in managing an insurance policy.

So, whether you’re a policyholder looking to transfer the servicing of your policy to a new agent or broker, or an insurance agent or broker seeking to establish a long-term relationship with a client, understanding the Agent of Record letter is crucial.

In this blog post, you will learn;

• What is an Agent of Record letter?
• how it works
• The legal implications of an Agent of Record letter
• Role of the Agent of Record and the parties involved
• potential risks and issues that can arise without an Agent of Record
• Why do you need an agent of Record letter?
• When to use an Agent of Record letter
• Sample Agent of Record letter
• etc.

let’s get started

Read also:

• Letter to an insurance company for claim settlement (guide + free 3 samples)
• Insurance appeal letter (guide + free sample)
• Insurance experience letter (guide + free example)
• Insurance cancellation letter (guide + free samples)

What is an Agent of Record letter?

An Agent of Record letter (AOR) also known as a Broker of Record letter (BOR) is a brief statement of facts written by a policyholder to his insurance provider to designate a specific insurance agent or broker to act as his legal representative in dealings with the insurance company, such as making changes, submitting claims, paying invoices, etc.

Related: Insurance broker vs agent (5 differences & 2 Similarities)

Here is how it works

Let’s say you have an insurance policy for your home that is currently managed by an insurance agent.

However, you’ve decided to switch agents and have found a new agent who you believe will provide better service and lower rates.

In order to transfer the management of your policy to the new agent, you will need to complete an Agent of Record letter.

The Agent of Record letter will identify the new agent as your designated representative for the policy, and authorize them to act on your behalf with the insurance company.

This means that the new agent will have the authority to make changes to your policy, such as adding or removing coverage, submitting claims, and paying invoices.

Once the Agent of Record letter has been executed and received by the insurance company, the new agent will take over the management of your policy, and the old agent will no longer be authorized to act on your behalf.

So in simple terms, the Agent of Record letter is a legal document that tells a certain insurance company that a certain broker or agent is the only broker that should appear on your records and will take over the management of your policy.

It’s worth noting that an Agent of Record letter is a legally binding document, and it’s important for both the policyholder and the new agent or broker to keep a copy of the letter for their records.

Additionally, it’s essential that the letter is executed in accordance with the requirements of the applicable state or jurisdiction, to ensure its validity.

Role of the Agent of Record and the parties involved

The Agent of Record plays an important role in managing an insurance policy on behalf of the policyholder.

As the designated representative of the policyholder, the Agent of Record is authorized to act on the policyholder’s behalf with the insurance company.

The Agent of Record’s responsibilities include:

• Managing the policy on behalf of the policyholder
• Communicating with the insurance company on behalf of the policyholder
• Making changes to the policy, such as adding or removing coverage
• Obtaining quotes, submitting claims, and paying invoices
• Providing guidance and advice to the policyholder regarding their insurance needs

The parties involved in an Agent of Record letter are typically the policyholder, the new Agent of Record, and the insurance company.

The policyholder is the owner of the insurance policy and the individual who is requesting the transfer of the policy to the new Agent of Record.

The new Agent of Record is the designated representative who will manage the policy on behalf of the policyholder.

The insurance company is the provider of the insurance coverage and the entity that will process the Agent of Record letter and make any necessary changes to the policy.

It’s important for all parties to understand their roles and responsibilities in the Agent of Record process to ensure that the policy is managed effectively and in compliance with the applicable laws and regulations.

Legal implications of an Agent of Record letter

An Agent of Record letter is a legal document that has important implications for the parties involved.

Here are some key legal implications of an Agent of Record letter:

Authorization

By signing an Agent of Record letter, you authorize the new Agent of Record to act as your designated representative with the insurance company.

This means that the new agent will have the authority to make changes to the policy, submit claims, and pay invoices on behalf of the policyholder.

See also: Authorization letter

Termination of the old agent’s authority

When an Agent of Record letter is executed, the old agent’s authority to manage the policy is terminated.

The insurance company will only recognize the new Agent of Record as the designated representative for the policy.

Accountability

The Agent of Record assumes accountability for the policy and its management.

This means that the agent is responsible for ensuring that the policy is managed in compliance with the applicable laws and regulations, and in accordance with the policyholder’s instructions.

Conflicts of interest

An Agent of Record must act in the best interests of the policyholder.

If the agent has a conflict of interest, such as a financial interest in the insurance company or another party, they must disclose it to the policyholder.

Liability

An Agent of Record may be held liable for any errors or omissions that result in financial harm to the policyholder.

The agent must act with due care and skill in managing the policy and must take steps to minimize the risk of loss or damage to the policyholder.

Why do you need an agent of Record letter?

Agent of Record letter is important for both policyholders and insurance agents/brokers.

Here are some reasons why you need it too;

To Protect your interests

An Agent of Record serves as your authorized representative, meaning that the agent/broker has a legal obligation to act in your best interests.

This can help ensure that the policyholder’s coverage is appropriate and that your claims are processed fairly.

To clarify roles and responsibilities

When an Agent of Record is established, it clarifies the roles and responsibilities of each party involved in managing the policy.

You know who to contact when they have questions or concerns, and the agent/broker knows their scope of authority and what they are responsible for.

To reduce confusion and errors

By designating a single Agent of Record, you can avoid the confusion and errors that can occur when multiple parties are involved in managing a policy.

For example, if you contact two agents/brokers with conflicting instructions, it can lead to delays or even errors in the policy’s management.

To provide continuity of service

When an Agent of Record is established, it ensures that your servicing agent/broker is aware of the policy and its history.

This can be especially important for policies that are complex or have unique circumstances, as it can help ensure that the policy is managed effectively and efficiently.

For example, if you have a policy with several different types of coverage, a designated Agent of Record can ensure that each type of coverage is managed properly and that the policyholder is not overpaying for coverage they don’t need.

By having a designated Agent of Record, you can be confident that your insurance policy is being managed by someone who has a complete understanding of their needs and preferences.

This can help ensure that any issues or concerns are addressed quickly and efficiently and that you receive the level of service they expect.

Additionally, having a designated Agent of Record can help establish a long-term relationship between you and the agent/broker, which can be beneficial for both of you.

To facilitate a smooth transition

If you decide to change insurance providers or transfer your policy to a new agent/broker, an Agent of Record letter can help facilitate a smooth transition.

In these scenarios, an Agent of Record letter is used to authorize the new agent or broker to act on your behalf and manage your policy going forward.

The letter will outline your preferences and authorizes the new agent or broker to act on your behalf.

Without an Agent of Record letter, the process of transferring the policy to a new agent or broker can be confusing and time-consuming.

The new agent or broker may not have access to the policy information, may not be authorized to make changes to the policy, or may not understand your preferences or needs.

This can lead to errors or delays in the management of the policy.

Potential risks and issues that can arise without an Agent of Record

to this point, it is clear that without an Agent of Record, you may be at risk of experiencing several issues and complications, including:

• Confusion and errors
• Lack of continuity
• Reduced protection: Without a designated Agent of Record, you may not have a clear understanding of who is responsible for your policy and who you can contact with questions or concerns. This can reduce your protection and leave you vulnerable to potential problems or issues.
• Inadequate coverage
• Loss of information

Related:

• 9 Types of life insurance policies [Buyer’s Guide 2023]
• 6 Steps in the Insurance claim procedure

When to use an Agent of Record letter

While it’s not necessary to use an Agent of Record letter in every insurance-related matter, there are certain scenarios where having one can be highly beneficial.

Here are some situations where using an Agent of Record letter can be useful:

Changing insurance providers

If you’re switching insurance providers, it’s important to ensure that your new agent or broker has all the necessary information and documentation to manage your policy effectively.

An Agent of Record letter can help to facilitate a smooth transfer of your policy and ensure that the new agent or broker has the authority to act on your behalf.

Adding or removing coverage

If you want to make changes to your insurance policy, such as adding or removing coverage, an Agent of Record letter can help to ensure that the changes are made correctly and that your interests are protected.

This can be especially important if you’re making significant changes that could impact your coverage or premiums.

Resolving disputes

If you have a dispute with your current insurance agent or broker, an Agent of Record letter can help you to designate a new representative who can act on your behalf.

This can help to avoid further conflicts and ensure that your policy is managed effectively.

Establishing a long-term relationship

If you’re a policyholder who wants to establish a long-term relationship with a specific insurance agent or broker, an Agent of Record letter can help to solidify that relationship and ensure that your policy is always managed by someone you trust and feel comfortable with.

How to write an effective Agent of Record letter

Writing an Agent of Record letter can seem daunting, especially if you’re not familiar with legal documents.

However, it’s a relatively straightforward process as long as you follow some key steps.

Here are some tips for writing an effective Agent of Record letter;

• Include the policy number, and type of policy.
• Include the effective date
• Include the name and contact information of the Agent or Broker of records
• Clearly state that you authorize the agent or broker to represent you and manage your insurance policy.
• If necessary, specify the specific tasks or types of transactions that the agent or broker is authorized to handle.

Sample Agent of Record letter

[Policyholder name]
[Policyholder Adress]

[Date]

[Insurance Company Name]
[Address]

Re: AGENT of RECORD LETTER
[Policy Number and type of coverage]
[Policy period or policy term]

Dear [Recipent’s Name or Title],

I am writing to inform you that I/we have appointed The ABC Agency as my/our Agent of Record, effective [date]. This decision was made after careful consideration of my/our insurance and bonding requirements, and we believe that The ABC Agency is best suited to represent our interests.

Please be advised that this letter constitutes my/our authorization to furnish the representative of The XYZ Agency with all information they may request regarding our insurance contracts, schedules, worksheets, claims history, or other data.

This letter will remain valid until formally rescinded in writing by me/an authorized corporate officer of our Company.

Thank you for your attention to this matter, and please do not hesitate to contact me with any questions or concerns.

Sincerely,

[Name]
[Title]

Sample Agent of Record letter pdf

See also:

• The Golden Insurance prospecting letter that gets leads [2023]
• Insurance agent introduction letter to client 2023 (guide & Free sample)

Sample Agent of Record letter (change of Agent)

[Date]

[Insurance Company Name]
[Address]

Re: AGENT of RECORD LETTER
[Policy Number and type of coverage]
[Policy period or policy term]

Dear [Recipent’s Name or Title],

I, [Policyholder Name], am writing to inform you that I have decided to transfer the servicing of my insurance policy to [New Insurance Agent/Broker Name] effective [Date of Transfer].

As of the transfer date, [New Insurance Agent/Broker Name] will be my designated Agent of Record for the following insurance policy:

Policy Number: [Policy Number]
Type of Policy: [Type of Insurance Policy]
Effective Dates: [Policy Effective Dates]

I authorize [New Insurance Agent/Broker Name] to act on my behalf in all matters related to this policy, including but not limited to, making changes, obtaining quotes, receiving and paying invoices, and submitting claims.

Please assist [New Insurance Agent/Broker Name] in facilitating a smooth transition of my policy, including transferring all necessary documentation and information to them. I appreciate your previous service, and I hope we can maintain a positive relationship in the future.

Sincerely,

[Policyholder Signature]

[Policyholder Name]

FAQs about Agent of Record letter