Let’s take the scenario that your agency customer asks for a certificate. Most of the business is with your standard agency markets but some of the policies are written through one of your wholesalers. When you complete the certificate, what is the rule / procedure within your agency for indicating on the certificate the specific policy information for that business placed thru the wholesaler?
Unless you are also acting as a wholesaler, your retail agency is not the official agent on that business. Technically, the wholesaler is the official agent of record. So based on that, do you officially have the “right” to issue those certs? Not really. In addition, if a problem were to develop based on the certificate information, would that certificate even be considered valid? This scenario probably occurs with some degree of frequency yet with little thought given to the potential ramifications.
So what should the retail agent do? There are a couple of options.
One involves advising the wholesaler of the need for the certificate and asking them to provide it. In most situations, this is not a practical approach. The wholesaler is probably not staffed to handle this task. In addition, if they are willing to handle it, what will be the turnaround time be? Most customers want their certs now…not 2 weeks from now.
The best approach and one that most retail agencies follow is to ask their wholesalers for authority and authorization to perform the issuance of certificates on their behalf. Retail agents should insist that this authorization from the wholesaler be in writing. The document should detail any key expectations such as:
- the exact specifics of the authorization
- what agency name should be noted on the certificate
- is there a specific individual that has this authority and thus should review and sign the certificates
- does the wholesaler want a copy of the certificates you have issued on their behalf
- how long is the authorization good for
Very honestly, without this authorization, retail agents are potentially asking for trouble if they are issuing certificates on that business written through wholesalers. If the event of an E&O claim involving certificates (and these are very common), the retail agent could find themselves in less of a defensible position. If you are counting on the support of your wholesaler during these times, think again. Bottom line – secure a written authorization and get it updated each year.