BOR Change Issue...need help/insight

NotEnough

Super Genius
114
Hi All,

Having some concerns about this BOR change I'm trying to complete. I'm a new "agency partner" for ABC insurance. They use XYZ as their mga/cluster. I was referred by a family friend to this huge commercial client who has 2 commercial property policies with allied and one with EMC. The client said they are unhappy with their current agent and would like me to be their broker of record. Their current agent also uses XYZ as their mga/cluster for their Allied/EMC appointment.

I asked one of the owners of my agency and they said since it is an "internal" transfer, everything should be quite easy. A few days later after submitting the record ACORD forms to complete the BOR change, I was notified that I would need to complete an entirely new application. Does this sound right?

I'm new to the independent side after being captive for 5.5 years but this doesn't sound right to me. I'm thinking maybe ABC/XYZ owners know the original writing agent for the policies and wishes to not move his client over to me? I don't see the need to write an entire new application when the name on the document will still show XYZ. Not sure if this matters, but the AP is a little over $20k.

Would Allied/EMC really require a new application for BOR change, when the MGA/Cluster will remain the same on the policy?

Sorry for the long post!
 
I don't know anything about Allied/EMC but I have had to submit BOR's with full completed signed accord applications before and copy of the Dec page. It really made no sense at all. I have noticed that the carriers I deal with have different methods of processing BORs, even for a little personal auto policy. I always thought maybe they want to make sure the customer is quite positive about making the switch, and if they are willing to do an app, answer questions and give you the dec page then they must be serious.

Congrats on that account that is awesome!
 
There is a very good reason they want a new app.

You are inheriting the policies and all their warts. By getting a new app, you protect yourself. It helps eliminate "But I had coverage XYZ", well no you don't. The application you signed with me did not include that coverage. It is also a chance to have that conversation, "Hey, I see you are missing ABC on your policies, most of our clients in your industry want that coverage. Would you like me to add it?"

Without a new app, you have no idea if the previously policy was properly written or not. The business could even be completely misclassified. Once you AOR/BOR it, it becomes your headache, so you better make sure it comes in clean.
 
Many carriers require this for BOR changes. In my opinion, it is only fair that the new agent be required to do the frontline underwriting and understand the risk in order to earn the benefit of commission.
 
There is a very good reason they want a new app.

You are inheriting the policies and all their warts. By getting a new app, you protect yourself. It helps eliminate "But I had coverage XYZ", well no you don't. The application you signed with me did not include that coverage. It is also a chance to have that conversation, "Hey, I see you are missing ABC on your policies, most of our clients in your industry want that coverage. Would you like me to add it?"

Without a new app, you have no idea if the previously policy was properly written or not. The business could even be completely misclassified. Once you AOR/BOR it, it becomes your headache, so you better make sure it comes in clean.

Never thought about that way,thank you. I am now thinking I am going to do apps anyway for every BOR just to protect myself. Even if the carrier doesn't require it.
 
Never thought about that way,thank you. I am now thinking I am going to do apps anyway for every BOR just to protect myself. Even if the carrier doesn't require it.

Yep, you mentioned BORing personal lines, so the app was never even sent to the carrier. Imagine taking it over and not getting a new app. The only copy that may exist is the previous agent's. Which may not exist, may not be signed, and you have no idea what it says. I would hate to argue "Well you didn't add that coverage" when you have no chance of producing an application to support that position.
 
"The client said they are unhappy with their current agent and would like me to be their broker of record"

Make sure you know the real reason why they are unhappy with the current agent. My experience has been that accounts not happy with the current agent are trouble, and the premiums just are not worth the headaches later.

And, yes to steal someone else's business, new apps are required by most of my carriers.

Dave
 
There is a very good reason they want a new app.

You are inheriting the policies and all their warts. By getting a new app, you protect yourself. It helps eliminate "But I had coverage XYZ", well no you don't. The application you signed with me did not include that coverage. It is also a chance to have that conversation, "Hey, I see you are missing ABC on your policies, most of our clients in your industry want that coverage. Would you like me to add it?"

Without a new app, you have no idea if the previously policy was properly written or not. The business could even be completely misclassified. Once you AOR/BOR it, it becomes your headache, so you better make sure it comes in clean.

This. Absolutely an E&O issue.

Everytime ive done a AOR you have to submit new applications.
 
Hi All,

Thank you for replies! I appreciate your time. Now I understand why they require a new application. I was just concerned since I was told one thing first then another second.

On the captive side, the client just needed to call home office to change servicing agents. It is sooooooooo much different on the independent side. Thanks again!
 
Hi All,

Thank you for replies! I appreciate your time. Now I understand why they require a new application. I was just concerned since I was told one thing first then another second.

On the captive side, the client just needed to call home office to change servicing agents. It is sooooooooo much different on the independent side. Thanks again!

Ultimately it is for the agent's benefit. The companies that require it are just being more proactive about protecting the agent. Although there is a benefit to the company as well, when they get the second application, they may just discover inaccuracies or outright lies in the original application.
 
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