Broker of Record - Explained
What is a Broker of Record?
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Table of ContentsWhat is a Broker Of Record?What Does a Broker Of Record Do?Broker of Record LettersBroker of Record Letter vs. Letter of AuthorizationAcademic Research on Broker Of Record
What is a Broker Of Record?
A broker of record is a term used in the insurance industry to describe an agent that represents an insured and manages a policy on their behalf. An insured person assigned this agent or broker to represent them and manage the insurance policy. This agent acts as the middle man between the insurance company and policyholder. He is responsible for all communications pertaining to the policy and receives quotes and notices from the insurance company on behalf of the policyholder. Sometimes, a broker of record advises the policyholder of changes that should be effected on a policy.
What Does a Broker Of Record Do?
A broker of record can represent and manage the insurance policy of an individual policyholder or a company. When a client hires a broker of record, it reduces the cost they might incur in an insurance policy and also saves them from a bad decision they are likely to make. A broker of record can handle employee health insurance for a company or other policies. A broker of record offers services to clients in exchange for a fee or commission, depending on the agreement between the two parties and the type of policy being managed.
Broker of Record Letters
Before a broker of record can begin to represent the interest of a client or manage insurance policies on their behalf, there must be a formal document stating this. This formal agreement must be between the broker of record, the policyholder and the insurance company. A broker of record letter is formal agreement or letter used to legally indicate an agreement and a relationship between broker, policyholder and insurance company. In some cases, a broker of record letter indicates that an existing agent is being replaced with a new agent by the policyholder. Regardless of this situation, a broker of letter record is essential to insurance companies as it helps them identify the agent representing a policyholder. Given the sensitive roles that a broker of record in an insurance policy, this letter is also important. This broker or agent carries out negotiations, makes claims and plans options on behalf of the clients. A broker of record letter contains details of the agent such as name, the date the agent assumes the role and the date it can be terminated if there is a need to. A broker of record letter can be used for any of the following reasons;
- To terminate the relationship between an existing agent and a policyholder.
- To terminate the ability of the broker or agent to make decisions on behalf of a client.
- To appoint a new broker. To grant negotiation rights to a new broker.
Broker of Record Letter vs. Letter of Authorization
A Letter of Authorization is often compared to a broker of record letter, but both are different. The major difference between these two letters is that while a broker of record letter is clear and contains specific instruction on who can represent a policyholder and their roles, the former is not detailed. Also, a broker of record letter allows a broker negotiate on behalf of a client but a letter of authorization does not give the broker the authority to negotiate on behalf of a client. Despite its uncomprehensive nature, a letter of authorization gives the broker authority to obtain information on insurance contracts, rates, policies, among others.
Academic Research on Broker Of Record
- Russian bank database: Birth and death, location, mergers, depositinsuranceparticipation, state and foreign ownership, Karas, A., & Vernikov, A. (2017). Russian bank database: Birth and death, location, mergers, deposit insurance participation, state and foreign ownership.Location, Mergers, Deposit Insurance Participation, State and Foreign Ownership (January 9, 2017). For every Russian bank we collect records of its registration, license withdrawal, liquidation, location changes, mergers and acquisitions, entrance to and exit from the Deposit Insurance System as well as state and foreign ownership. We describe our sources and the resulting database.
- The Analysis of the RomanianInsurance Brokers, Gavriletea, M. (2015). The Analysis of the Romanian Insurance Brokers.STUDIA UNIVERSITATIS BABES-BOLYAI, NEGOTIA,54(1), 2009. Every insurance market develops itself and sells insurance products using different strategies and distribution channels. The main role in selling insurance policies is granted to insurance brokers. In this paper we will analyze the struggling phenomenon of insurance brokerage industry in Romania after 2002. This year was chosen because from that time a new legislation appeared and the requirements for insurance brokers were more rigorous than in the previous years. The Romanian insurance brokerage market is very active; on the Romanian market are active both local brokers and famous international brokers that brought with them their intelligent solutions for risk management programs. The present paper analyses these brokers through their number, activity volume and profitability. An important period for insurance brokers activity proved to be between 2004 and 2007, as the paper will show. In the end we conclude that the brokerage activity still presents premises for growth and the future in the selling insurance market will belong to the brokers.
- Analysis of New Possible Modification in the RomanianInsuranceMarket Normative and Theirs Future Effect, Gavriletea, M. (2014). Analysis of New Possible Modification in the Romanian Insurance Market Normative and Theirs Future Effect.International Journal of Business Research,14(4). The actual climate of business development in Romania related to financial industry (Insurance industry in case of this research) supposes continuous modification in the legislative system and in the specific normative. Financial Supervising Authority in Romania intends to introduce late this year important modification in the insurance market especially to MTPL insurance. In this paper we will analyze this possible modification and we will present possible advantages and disadvantages related to them. The modification that will be introduced will influence the market for sure, but the effects will appear only after a period of 3-5 years.
- 2010 LifeInsuranceSecondary Market'Moving Forward', Siegert, P. (2010). 2010 Life Insurance Secondary MarketMoving Forward.Available at SSRN 1585439. Caution has been the carryover by-word from 2009 for good reason. Some would like to think the Life Insurance Secondary Market (LISM) has faltered. However, the LISM is indeed moving forward! This should be welcome news to seniors, investors and many LISM players, but unfortunately not for all. The capital markets turmoil has taken its toll and changes are happening.
- Privacy and the database industry, Pike, G. H. (2005). Privacy and the database industry.Information Today,22(5), 17. It has been a difficult couple of months for many of the data broker industrys heavyweights. In mid February, ChoicePoint reported that credit reports and other data of over 140,000 people were provided to criminals posing as legitimate businesses. Later in February, Senator Charles Schumer (D-NY) chastised Westlaw for the ease in which sensitive records are available through egregious loopholes in its database access policies. Finally, LexisNexis reported that potentially fraudulent access may have compromised records of 32,000 individuals.