Broker of Record
What it is:
A broker of record is an insurance agent who manages an insurance policy with a carrier on behalf of a policyholder.
How it works (Example):
Let's assume John Doe buys a whole life insurance policy. He hires Nancy Smith to help him evaluate his options and choose a carrier. Nancy handles the purchase process on John's behalf. John signs a broker-of-record letter indicating that Nancy is his insurance broker.
Why it Matters:
Being a broker of record is a way for insurance producers to earn commissions on the sale of a policy and to continue earning commissions for some or all of the duration of the policy. Because Nancy is the broker of record, she can receive copies of communications the carrier might send to John, as well as other quotes the carrier might give him.