What is the difference between a Letter of Appointment and a Letter of Authority?

Letter of Appointment vs Letter of Authority

There is always some confusion between a letter of authority and a letter of appointment, although they are very different. 

Letter of Authority

A letter of authority gives permission for the insurance broker to collect information from insurers on behalf of their clients who currently work with another broker. An insurer will need this to release the requested policy information.

Berkley Insurance Australia’s (BIA) stance on a letter of authority may be slightly different to other insurers.

We will not acknowledge or produce the required information to an insurance broker who may send a ‘letter of authority’ who is not the placing broker via BIA.

Letter of Appointment

A letter of appointment is when the insured appoints the broker as their sole insurance broker and gives permission for the insurance broker to act on their behalf in obtaining insurance.  This includes future renewals and any fees or commissions for their services.

For further clarification, NIBA has outlined specific information about these letters.

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