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Tips for Brokers About the Broker of Record Process & Letter

Note: This document is provided for reference purposes only, and does not modify or otherwise alter State Fund’s Broker of Record Requirements which can be reviewed at the following link - Broker of Record Requirements.

What is a Broker of Record?

The following characteristics apply to a Broker of Record:

  1. Broker owns the policy.
  2. Broker may be paid commission.
  3. Broker is entitled to servicing information.
  4. Broker receives the renewal quote.
  5. Broker is copied on communications sent to the policyholder.

What constitutes a valid Broker of Record letter?

The Broker of Record letter received by State Fund must meet all of the following requirements in order to be considered valid: 

  • The letter must be printed on insured’s letterhead or on ACORD 36.
  • The letter must express the employer’s intention to appoint the broker as its exclusive Broker of Record.
  • State Fund must receive the letter within 30 calendar days of the date of the letter.
  • The letter must be specifically addressed to State Fund.
  • For policies currently with State Fund, the letter must be sent to our fax# (888) 302-3538, or to our e-mail at bordesk@scif.com.
  • The letter must specify the employer’s name and policy number.
  • The name of the broker identified in the letter, must be identical to the broker’s name as listed on its State of California Department of Insurance Fire and Casualty Broker’s License, or as listed in the broker’s Brokerage Profile and State Fund records.
  • The letter must include the Brokerage Access Number, producer and/or contact name, and their active brokerage email address.
  • The letter must include the printed name and title of signator. 
  • The letter must be signed and dated by someone with the legal authority to do so (a corporate officer, a partner of a partnership, a sole proprietor, the executive director (nonprofit entities only), and manager and/or managing members of Limited Liability Companies (LLCs).
  • The individual signing the letter must have the authority to enter the broker or brokerage firm into a contractual agreement and such authority must be reflected in State Fund policy records. ***

 *** Note: If organization or corporation is nonprofit the organization may, provide Board Minutes as the policy records may not reflect the organizations current members.

Can the 10-day period be waived?

No. In the event that an employer’s valid Broker of Record letter contains a statement that it waives the 10-day notification period for the current broker of record to submit a letter of rescission, State Fund will still notify the current broker of record that it received a new broker of record letter and allow 10 days from the date of processing the letter for the current broker of record to submit a letter of rescission.   

What determines the effective date of the valid Broker of Record letter?

The effective date of the valid Broker of Record letter is based on the date State Fund receives the valid Broker of Record letter. Valid Broker of Record letters received after 5 p.m. on a normal business day, on a weekend, a State or Federal holiday will be considered received on the next business day. State Fund’s normal business day begins at 8:00 a.m. and ends at 5:00 p.m. Pacific Time (PT)

Broker of Record Requirements

  • In the event that State Fund receives a new business submission, for which a prior submission was previously submitted on the same risk, a valid Broker of Record letter must be attached to the new submission.    Please pay attention to the indicator in PriceNow on the BOR Hit tool.  If a valid Broker of Record letter is not attached, the new business submission will be closed.  If the new business submission is closed, and you would like to proceed with the submission, you will then need to resubmit the application with the valid Broker of Record letter attached.
  • If State Fund previously received a submission on an account that is a No Previous Insurance (NPI) account, and your new submission and valid Broker of Record letter are received on that NPI account, the new valid Broker of Record letter will be processed and the broker that submitted the first submission will receive notification that their submission will be closed.   If the new policy has already bound, your valid Broker of Record letter will be processed and considered a mid-year change.
  • If the received date of your new submission and Broker of Record letter for an account is less than 10 calendar days from an established Rating Effective Date, as defined in State Fund’s Broker of Record Requirements, your Broker of Record letter will not be processed and your submission will be closed. If the Rating Effective Date is different than the Policy Effective Date, as defined in State Fund’s Broker of Record Requirements, the Policy Effective Date will be used.  After the policy has bound, you may resubmit your valid Broker of Record letter and it will be processed as a mid-year change.
  • If the received date of a Broker of Record letter is less than 10 calendar days prior to the Policy Effective Date on a brokered policy, the Broker of Record shall be determined 10 calendar days from State Fund’s letter of notification to the current broker.  If a rescission letter is not received from the current broker the policy will be converted to the new broker one day after the Policy Effective date and will be considered a mid-year change. The new broker will not be eligible for commission for this policy until the next renewal period if they are still the broker of record at that time. 
    • The exception to the above is if the renewal policy has a broker on the policy whose business relationship has been terminated by State Fund and the employer is assigning a new broker. The new broker will then be determined based on the date when State Fund receives the valid Broker of Record letter.
  • If a direct employer receives a quote and binds through our online system, it will take precedence over any broker submission that is currently being worked on by the underwriter.  The broker will receive a letter indicating that the employer has received and bound a direct policy and the broker submission will be closed.
  • If a direct employer receives a quote and binds through our online system and they currently have an active policy with State Fund through a broker, we will contact the employer to determine how they would like to proceed.

Mid-year Broker of Record letters

In the event of a mid-year change, a valid Broker of Record letter must be received 10 calendar days or more prior to the Policy Effective Date of a State Fund policy. The Broker of Record is determined 10 calendar days from State Fund’s notification to the current broker of its receipt of the new valid Broker of Record letter.  If a rescission letter is not received from the current broker, the new broker will become the Broker of Record mid-year and become the commissionable broker upon renewal. 

  • Valid Broker of Record letters received less than 10 calendar days will be recognized as a mid-year Broker of Record change by becoming the broker one day after the Policy Effective Date and will not be eligible for commission until the next renewal period, if they are still the broker of record at that time. 

Who receives the commission on mid-year Broker of Record changes?

Pursuant to the terms of the Broker Agreement, for mid-year Broker of Record changes, any commission due and payable or any reimbursement of commissions due State Fund remains between State Fund and the original Broker of Record at inception or renewal of policy.

Can State Fund contact the employer who has assigned a Broker of Record on his/her account?

State Fund reserves the right to contact the employer to ascertain the definitive Broker of Record designation.

How and where can Broker of Record letters be sent?

New Business: Valid Broker of Record letters must be attached to any new submission if the BOR Hit indication in PriceNow determines a prior submission is already in State Fund’s system.

Renewal Business:  Valid Broker of Record letters must be sent to the designated Broker of Record Desk e-mail address, bordesk@scif.com, or fax number 888-302-3538.  A valid Broker of Record letter will not be recognized as received if sent to any other email or fax number.

How does a broker release representation on an account?

If a broker no longer wishes to represent an account with State Fund, the broker must submit a written request to State Fund. The request must state that the broker will, “relinquish ownership” or “release representation of this policy,” and be sent to the designated Broker of Record Desk by email, bordesk@scif.com, or fax 888-302-3538.    The letter must be signed and dated by the producer or brokerage principal/officers listed in the State Fund Brokerage Profile.

Can a broker take over a direct account as the Broker of Record?

Yes.  If the received date of a valid Broker of Record letter for a direct State Fund policy is 21 calendar days or more prior to the Policy Effective Date, the policy will be converted to a brokered policy effective the date State Fund received the valid Broker of Record letter. This request will be considered a mid-year Broker of Record change. The broker will be eligible for commission for this policy upon policy renewal.

If the received date of a valid Broker of Record letter for a direct State Fund policy is 20 calendar days or less prior to its Policy Effective Date, the policy will be converted one day after the Policy Effective Date to a brokered policy. broker will not be eligible for commission for this policy until the next renewal period if they are still the Broker of Record at that time. 

Can a broker submit a Broker of Record letter on a cancelled/expired broker or direct account?

Yes, as long as the effective date of the valid Broker of Record letter is within the original policy period.  If it is not, then the request would be considered for a Broker of Service and a letter indicating a Broker of Service, as defined in State Fund’s Broker of Record Requirements, will be needed.

Account Management/BOR Desk Contact Information:

Direct Phone

Fax

Email

(888) 302-3540

(888) 302-3538

bordesk@scif.com

 

Note: State Compensation Insurance Fund is not a branch of the State of California.

 

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