Agent of Record

An Agent of Record (AOR) is generally the same thing as a Broker of Record (BOR). These letters or forms determine who represents your business to an insurance company.
Your agent of record is the agent authorized to represent your business  to any given insurance company.

What is an Agent of Record?

An agent of record, or broker of record is a simple document signed by a business owner in order to specify which agent they want to represent their business with one or more insurance companies. Representation includes quoting and servicing the insured. There are a number of reasons why a business might want to change agents. The number one reason is a lack of customer service. Additionally, access to insurance carriers and specific industry programs will vary significantly between agencies.

Interested in an Agent of Record Change? Call 888-611-7467 for a Workers' Compensation Specialist

Why Change Insurance Agents?

Common Reasons for Changing Agents:

  • You're unhappy with current agencies service or communication.
  • Another agent has more expertise in your industry.
  • The current, or incumbent, agent does not have access to a particular market.
  • The current agent mishandled a work comp claim.
  • Agency failed to prepare and assist with an audit issue.
  • Owners were not properly managed for exclusion or inclusion on the policy.
  • The current agent is blocking the markets.
You're Unhappy With Your Current Insurance Agent.

Good service can be hard to find these days. Many businesses may need frequent certificates of insurance or they might need a policy change in order to satisfy some specific insurance requirements. We understand that employers need fast, efficient and knowledgeable service from their agent of record.

You Want an Agent That Specializes in Your Industry

If you operate in a very specialized industry there may be other agents that have more experience and may offer better advice. Expert advice can help save money or better manage coverage selection. Some insurance agencies specialize in a particular industry or a select few industries. Many agents do not have a broad knowledge on workers comp insurance. Often times, only a select few agencies will have access to specific class codes with the same insurance company because so many agent lacks the underwriting expertise.

Current Agent Doesn't Have Access to the Right Markets

Insurance agents must be appointed with each insurance company they represent. In order to get appointments, agencies must produce a minimum amount of premium each year. Many small agencies simply can't support that many appointments due to production requirements. We write a lot of workers comp across the United States and that makes it easy to keep appointments with more than 40 carriers.

Your Business Had a Poor Experience with a Claim
A mismanaged workers' compensation claim can be extremely frustrating to a business owner. Especially when it increases the cost of coverage by adversely affecting an experience modification rating. Sometimes an agent needs to push back on the carrier in order to get claims closed or get the claim reserve amount reduced in order to protect a client EMR Rating.

Your Workers Comp Audit Was Mishandled

Its pretty easy to end up with an inaccurate workers comp audit resulting in more premium being due at the end of a policy term. Sometimes an agent will incorrectly classify employees in the wrong class code. Other times its the auditors fault and the agent must step in and help resolve any issues to correct the audit results. Very few agents or agencies understand and engage in this audit review process.

Owner Exclusions Were not Filed Properly

Often times business owners want to be excluded from work comp coverage under their policy. Many states have specific rules and required forms in order to properly execute the exclusion. Its not uncommon for business owner to wind up with big audit bills because another agent didn't properly advise them on how to exclude owners from the policy.

What Does Blocking The Market Mean?

When an insurance agent blocks the market it means they have sent your workers comp application and loss details to all of their insurance companies in order to prevent another agent from submitting without an AOR letter. The ugly truth is that some agencies do not have your best interest in mind and will not always show you the lowest cost insurance quote at the time of your renewal.

There are a few reasons why an unscrupulous agent might block the markets and then fail to present the cheapest prices or lowest rates on coverage. Different carriers pay different commission percentages on premium, so an agent may be greedy and want the deal that pays the highest commission. An agency may also favor a specific carrier because they are trying to bump up their book of business with a particular insurance company to meet production requirements. You have the right to ask for copies of all your renewal offers to make sure you are being represented ethically.

How Come I've Never Signed an Agent of Record Before?

The original agent who submits a businesses application for underwriting is considered the incumbent agent so no agent of record letter is required. If you've never been asked to sign a Agent of Record or Broker of Record Letter its more than likely because you have never had a conflict with your current agent or you've dealt with competing agents who had separate and distinct insurance companies.

What is the Process for Changing a Broker of Record?

Each insurance company has its own process and requirements for executing a Broker of Record change but the process is always similar. A few require a signed Acord 36 Form as its the official industry Agent/Broker of Record Change Form; however, most insurance companies will accept a simple Agent of Record Change Letter with the following elements:

  • It should be on insured's letterhead or a close resemblance of letterhead.
  • It should be signed and dated by an owner or officer of the business.
  • It should include the line or lines of coverage and any existing policy numbers (if any).
  • It should identify the carrier and the agency receiving the BOR.

Below are examples of the Acord and the Sample Letterhead:

What Happens After I Sign the AOR

Once an AOR is sent to an insurance company underwriter the insurance company will generally notify the current agent and sometimes allow them a 10-day grace period in which they have the opportunity to contact the insured and ask them to rescind the AOR. This requires a new document that reaffirms the original agent as the Agent of Record.

Once the 10-day grace period has expired, assuming no rescinding order was signed, the new agent and agency may work with the insurance company on behalf of the business. This included negotiating new and renewal quotes, issuing certificates of coverage and requesting policy changes.

A Word of Caution on Broker of Record Letters

While it sometimes makes sense to make an agent of record change for reasons we outlined above. It can also send the wrong signal to underwriters because too many cooks in the kitchen is a recipe for disaster. If two agents present conflicting info about payroll, class codes, or operational details an underwriter might feel like someone is gaming the system or misrepresenting the facts. Its possible the carrier could decide not to offer a quote or renewal in some circumstances.

Good independent insurance agents are the best way to find the most affordable insurance quotes. If your agent is doing a good job and your happy with your rates service then it might not make sense to do an AOR. However, if your agent isn't providing you with great service and competitive renewal quotes then consider selecting a new agency to represent you in the marketplace.

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Thinking of Changing Insurance Agents?

Changing insurance agents mid-term or during your annual renewal is an important decision. When it does become necessary to make a change, our workers' comp experts can help you with the Agent of Record process or we can work with you to find alternative insurance quotes for your business.

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Visit NCCI for more resources and information about workers' compensation class codes. Visit United States Department of Labor for more information about government agencies managing workers compensation insurance rates.

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