Final answer:
A Broker of Record is an insurance agent or broker who is designated as the primary representative of an insured party and has the authority to make decisions, negotiate contracts, and interact with insurance companies.
Step-by-step explanation:
A Broker of Record is a term used in the insurance industry to refer to an insurance agent or broker who has been designated as the primary representative of an insured party. The Broker of Record has the authority to make decisions on behalf of the insured, negotiate insurance contracts, and interact with insurance companies. This designation is significant because it determines which agent or broker will receive commissions for insurance policies.
For example, let's say a company wants to switch its insurance broker. The company would need to fill out a paperwork called the 'Broker of Record Letter', which designates a new broker as the representative for insurance matters. This letter is submitted to the insurance company, and once acknowledged, the new broker becomes the Broker of Record and assumes the responsibilities and commissions associated with the role.
In summary, a Broker of Record is an insurance agent or broker who is designated as the primary representative of an insured party and has the authority to make decisions, negotiate contracts, and interact with insurance companies.