- In the insurance industry, the broker of record is the agent currently responsible for overseeing and maintaining a particular policy. The broker of record is also commonly referred to as the servicing agent, and these titles are synonymous and interchangeable. Policy owners may request a new servicing agent at any time for any reason. The broker of record is compensated for his efforts, regardless of how much interaction, involvement or maintenance was actually necessary. Compensation is in the form of trails paid on insurance policy anniversaries.
- The sales agent's role in the insurance industry is to seek new potential customers, present available products and services to those prospects, close as many new deals as possible and then do it all over again. Since selling insurance requires massive amounts of time, energy and dedication, to successfully operate as an insurance sales agent, the agent must make a firm commitment to focusing his energies on developing effective marketing plans, referral strategies and other innovative advertising techniques. Successful sales agents may transfer most of the responsibility of maintaining policies to other associates, thereby allowing them to focus on continued sales and marketing. However, not all agents, particularly those without a working technique to bring in new customers, attempt to act as both the broker of record and the sale agent. This dual-purpose position potentially places new tasks and duties in the hands of the agent but also increases compensation.
- Interestingly, there is only a small number of unethical and immoral behaviors that sales agents and brokers of record have been known to engage in that directly negatively impact the other. The most common unethical behavior, and the one with the greatest threat to the other party, is the theft of clients. By taking advantage of less sophisticated consumers, agents might convince clients to cancel a policy that exists with another broker and replace it with something new, even if the replacement is not in the customer's best interests. Similarly, brokers may knowingly interfere in another broker's presentation of legitimate and appropriate products or solutions in hopes of tarnishing the agent's character or otherwise ruining her chances of closing the sale.
- Insurance producers in every state are required to earn a minimum number of continuing education credits prior to the expiration of their license. A set number of these credits must be directly related to morals and ethics in the industry. The goal behind making ethics courses mandatory is to educate producers and stimulate discussions that ultimately lead to more appropriate choices when faced with potentially objectionable options. Continuing education about ethics in the industry is intended as a means of prevention. However, nothing exists to protect current agents against immoral behavior from other industry professionals that results in the loss of clients, commissions or other opportunities.
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