Key information for brokers and insurers regarding LOA's and LARQ's
NIBA has adopted a new industry standard to help stamp out confusion and misuse surrounding Letters of Authority and Letters of Appointment.
The templates are intended as the minimum standard for use when seeking quotations and/or becoming appointed broker/authorised representative to a new client.
Use of NIBA templates on every one of these occasions affects all NIBA members as it is intended to be regarded as the industry minimum standard.
Standard Letters of Authority and Appointment are designed to ensure clients clearly understand the purpose of the document they are signing.
NIBA also expects the standard letters will be of assistance to insurers, to provide clarity around the intention of insured and broker when insurers are approached for policyholder information, or asked to submit quotations or transfer existing policies to a broker not currently appointed to that account.
To obtain a quotation for a prospective client: the broker will use the ‘Letter of Authority to Review & Quote’ (LARQ).
When appointed: the broker will have a ‘Letter of Appointment’ (LOA) completed.
Both documents must:
· be produced on client letterhead
· contain the relevant template wording
· be signed by an authorised person in the client’s business
· contain a valid date to assure currency
The Letter of Authority is so named for the particular benefit of clients, who need to clearly understand the purpose and intention of the document they are signing.
The recommended process involves:
· requesting a review and quotation of specific insurances, or
· confirming the appointment of the broker, and
· the document is signed by a director, financial controller or owner of the business and contains clear evidence of the intended validity period.