The National Insurance Brokers Association (NIBA) has requested insurance brokers to make sure they are familiar with the industry agreed arrangements for Letters of Appointment and Letters of Authority to Review and Quote.
NIBA CEO Dallas Booth said, “It is important that Letters of Authority and Letters of Appointment, leave no room for mis-information or misunderstanding, and I would like to emphasise that guidance material is readily available on the NIBA website. These letters are important, as they set up the relationship between the client, and broker and the underwriter(s). It is important that the correct letter is used, and that any misunderstanding between the broker and the client is avoided.”
Based on member enquiries and NIBA’s discussions with the Insurance Council of Australia, NIBA developed guidance to assist members in confirming the consent of clients to seek information from insurers (or their agents) in two circumstances:
• Where the broker has been appointed to act on behalf of the client – refer to Letter of Appointment; or
• Where the client wishes a broker to review cover and provide a quote – refer to Letter of Authority to Review and Quote.
There are a number of risks that can arise for insurance brokers in relation to these matters which are explained in the guidance to each example letter.
The example letters are by way of general guidance only and are not compulsory. However, NIBA strongly urges insurance brokers to use the agreed Letters as appropriate, with appropriate amendments to take account of the client’s relevant circumstances.
You can access the complete information on the NIBA website here.