Newsbank Archive
December 20, 2014
Essential Exchange Insurance Services
925-984-5400
Brentwood CA 94513
Category: Health Care
   Business Type: Family Planning
Category: Services
   Business Type: Business and Professional - Consulting
Category: Insurance
   Business Type: Agency - Life - Medical
   Free Quotes: Yes
   Licensed: Yes
hours
Please call for an appointment.

FAQ on Changing Brokers
Do we have to change our benefit plan providers if we change our consultant or broker?

No. Changing your benefit plan adviser, whether it is a broker or consultant, does not mean that you have to change any of your insurance or service providers. If you are retaining a new broker you should confirm that the broker is, or will be, appointed with your existing insurers.

When is the best time to change benefit advisors?
If you are contemplating the appointment of new benefit adviser, you should make your decision and begin the engagement at least 6 months before your next renewal date. This will allow ample time for your new benefit adviser to build their files, learn about your needs, address urgent plan or provider issues, and lead you through an organized assessment of insurance, benefit and communication options.

What steps are required in changing a benefit adviser?
  1. Review any contract between your company and your existing benefit adviser.
  2. Identify any terms that address the termination of the agreement. In many instances, benefit brokers are retained via a simple Broker of Record letter, and termination provisions are not addressed.
  3. Formalize an agreement for professional services to be provided by your new benefit adviser. This is a good opportunity to ensure that an agreement beyond a Broker of Record letter is in place.
  4. Notify your existing benefit adviser(s) of your decision with respect to their services. While this is not mandatory, it is the professional thing to do.
  5. Execute a Broker of Record letter or Letter of Authorization for your new benefit adviser. This letter should address the effective date of the change and identify the actions your new benefit adviser is authorized to take on your behalf.
Your new benefit adviser should take responsibility for filing the Broker of Record letter or Letter of Authorization with your insurance carriers and service providers. This often requires that you provide the adviser with a comprehensive list of the contracts you have in force. Your new benefit advisor should be able to obtain copies of contracts and most other required data from your plan providers. In certain situations it may be prudent and quicker for you to provide this information.

How are broker commissions affected by a change in broker?
Most group insurance contracts require employers to pay premiums on a monthly basis. The insurance company or service provider then pays the Broker of Record according to the terms of a commission agreement. In most cases, the insurer will commence payment to a newly appointed broker beginning on the first of the month following the date of a change in the Broker of Record. In certain instances, commissions are vested with the broker who originally placed the insurance or investment contract. This vesting period can be as short as the remainder of the policy period, to as long as the balance of the life of the insurance contract. If you are compensating a new broker via commissions, it is important to understand how the commissions are affected by a change in Broker of Record.




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