What is the agent of record (AOR)?

An agent of record (AOR) or broker of record (BOR) plays a crucial role in managing insurance policies on behalf of a business or individual. Here's a comprehensive guide to understanding and navigating the agent of record process:

What is an Agent of Record Letter?

An agent of record letter is a formal document signed by a business owner to designate a specific agent or broker to represent their business in negotiating insurance premiums and coverage with an insurance company. This letter is typically used to replace an existing agent and names the new agent as the official representative of the business for insurance-related matters.

When to Terminate an AOR Agreement

Termination of an AOR agreement may be necessary if you're dissatisfied with the current agency's services, communication, or expertise. Other reasons for termination include mishandling of tasks, lack of access to specific insurance markets, or failure to anticipate important issues.

What to Know Before Signing an AOR Letter

Before signing an AOR letter, thoroughly review the agreement's details to avoid potential problems in the future. Understand that signing an AOR letter means terminating the agreement with the old agent and hiring the new one, which may incur servicing fees. Exercise due diligence to ensure transparency and avoid surprise charges or misunderstandings.

How Does the AOR Process Work?

New Agent Sends AOR Letter: The new agent sends an AOR letter to the business owner, outlining the details of the agreement. Review and Sign: The business owner reviews the letter, signs it on their company's letterhead as an acknowledgment of receipt, and sends it back to the agent. Submission to Insurance Carrier: The new agent submits the signed AOR letter to the insurance carrier. Policy Transfer: Policies are transferred within 5-10 days, pending acceptance by the insurance carrier, and the new agency relationship begins.

What to Do if You Signed a Bad AOR

If you regret signing an AOR letter, you typically have 5-10 days to rescind it by signing a rescinding AOR letter, nullifying the original agreement. After ten days, your only option is to sign a new AOR with another agent, effectively hiring the new agent and terminating the previous one.