Agent of Record
The licensed agent or agency officially recognized by the carrier as the representative for a specific insured's policy.
What It Is
Agent of record (AOR) is the designation given to the licensed agent or agency that a carrier recognizes as the official representative for a specific insured's policy. The AOR has the right to service the policy, receive commission, and act on behalf of the insured with respect to that carrier and policy. Only one agent or agency can be the AOR for a specific policy at any given time.
The AOR designation carries both rights and responsibilities. Rights include receiving commission on the policy, accessing the policy information from the carrier, and making policy changes on behalf of the insured. Responsibilities include servicing the policy competently, maintaining proper licensing, and fulfilling the duties of an insurance agent under state law.
AOR status can be established through the initial placement of business, through a broker of record letter changing the AOR on an existing policy, or through the assignment of AOR when an agency acquires another agency's book. Some carriers maintain AOR at the account level (all policies for an insured) while others allow different AORs for different policies on the same account, which can create service coordination challenges.
Why It Matters for Brokers
AOR status is the foundation of the agency's relationship with the carrier on behalf of the client. Without AOR status, the broker cannot access policy information, receive commission, or make changes. Tracking AOR status across all accounts and carriers ensures the agency's rights are properly maintained and that any unauthorized AOR changes are immediately detected and addressed.
Real-World Example
An agency discovers during commission reconciliation that it stopped receiving commission on a $65,000 commercial auto policy for a long-standing client. Investigation reveals that the client's fleet manager signed a BOR letter with a competing agency six months ago, transferring AOR without the client's principal being aware. The agency contacts the client's principal, who was unaware of the change and signs a new BOR letter restoring the original agency's AOR. The competing agency earned $4,875 in commission during the six-month period that the original agency lost due to inadequate AOR monitoring.
Common Mistakes
- 1Not monitoring AOR status across all accounts, allowing unauthorized BOR changes to go undetected for months.
- 2Having different AORs on different policies for the same client due to historical placement decisions, creating service confusion and potential coverage gaps.
How brokerageaudit.com Handles This
brokerageaudit.com maintains a comprehensive AOR status record for every policy across the agency's book. The system detects when commission payments stop unexpectedly, which may indicate an unauthorized AOR change, and alerts the account team to investigate. The Commission Reconciliation module cross-references commission receipts with expected AOR status.