An Agent of Record (AOR) is a legal designation given to an individual or firm, usually an insurance agent or broker, who has been authorized by a policyholder or client to represent them in dealings with insurance companies. The Agent of Record acts as the primary point of contact between the policyholder and the insurance provider, handling policy management, renewals, claims, and any other matters related to the insurance coverage.

Key Aspects of Agent of Record:

1. Role and Responsibilities:
   • Representation: The Agent of Record represents the policyholder in all interactions with the insurance company. This includes negotiating terms, obtaining quotes, renewing policies, and managing claims.
   • Policy Management: The AOR is responsible for ensuring that the policyholder’s insurance coverage meets their needs and is up to date. This involves regularly reviewing the policy and making adjustments as necessary.
   • Advocacy: The AOR advocates on behalf of the policyholder, working to secure the best possible terms and conditions from the insurer and assisting in resolving any issues that arise.
2. Agent of Record Letter (AOR Letter):
   • The designation of an Agent of Record is formalized through an Agent of Record Letter. This document is signed by the policyholder and sent to the insurance company to notify them of the appointment of the new agent.
   • The AOR letter typically includes:
     • The name and contact information of the new agent.
     • The specific policies or accounts the agent will manage.
     • Authorization for the insurance company to release information to the new agent and to work with them on behalf of the policyholder.
   • Once the insurance company receives the AOR letter, they will update their records to reflect the new agent’s authority.
3. Changing an Agent of Record:
   • Policyholders can change their Agent of Record by submitting a new AOR letter to the insurance company. This often occurs when a policyholder is dissatisfied with their current agent’s service or when they want to work with a different agent who can better meet their needs.
   • The transition process usually involves transferring all relevant information and authority from the previous agent to the new one, ensuring continuity in policy management.
4. Impact on Commissions:
   • The Agent of Record typically earns commissions from the insurance company for the policies they manage. When an AOR change occurs, the new agent begins receiving the commissions associated with the policy, while the previous agent loses that income stream.
   • The change in AOR does not usually affect the policyholder’s premium or coverage, but it does affect the distribution of commissions between agents.
5. Benefits of Having an Agent of Record:
   • Expertise: An experienced AOR provides valuable expertise and advice, helping policyholders navigate the complexities of insurance coverage and ensuring they have the appropriate protection.
   • Convenience: The AOR handles all communication and administrative tasks with the insurance company, saving the policyholder time and effort.
   • Personalized Service: An AOR offers personalized service, tailoring coverage to the specific needs of the policyholder and providing ongoing support.
6. Examples of Agent of Record Usage:
   • Business Insurance: A company may appoint an AOR to manage its commercial insurance policies, including property, liability, and workers’ compensation insurance.
   • Employee Benefits: Businesses often designate an AOR to handle employee benefits programs, such as health insurance, retirement plans, and other group benefits.
   • Personal Insurance: Individuals might designate an AOR to manage their personal insurance needs, including home, auto, and life insurance policies.
7. Legal and Ethical Considerations:
   • The AOR is expected to act in the best interests of the policyholder, providing unbiased advice and working diligently to secure favorable terms. Ethical standards require the AOR to disclose any conflicts of interest and to prioritize the policyholder’s needs.

In summary, an Agent of Record (AOR) is an authorized representative who manages insurance policies on behalf of a policyholder, acting as the primary liaison between the policyholder and the insurance company. The AOR provides expertise, handles policy administration, and advocates for the policyholder’s best interests. The designation of an AOR is formalized through an Agent of Record Letter, which grants the agent the authority to manage the policy.