Tips for Brokers About the Broker of Service

What is a Broker of Service?

The following features all apply:

1. Broker does not own the policy.
2. Broker will not be paid commission.
3. Broker cannot negotiate pricing for the policyholder.
4. Broker may represent the client’s interest with State Fund and may be provided with servicing information.
5. All automated communications and documents still go directly to the employer.

What is a valid Broker of Service letter?

The features of a valid Broker of Service letter are as follows:

1. The Letter must be on employer’s letterhead.
2. The Letter must express the employer’s intention to appoint the broker as the Broker of Service.
3. The Letter must be currently dated and State Fund must receive the Letter within 30 calendar days of the date of the Letter.
4. The Letter must be addressed to State Fund.
5. The Letter must specify the employer’s name and/or policy number.
6. The Letter must include the printed name and title of signer.
7. The Letter must specify the broker’s name and address, telephone and fax number, and if applicable, the broker’s State Fund access number.
8. The Letter must be signed and dated by the corporate officer, partner, sole proprietor, executive director (nonprofit entities only), or manager and/or managing members of Limited Liability Companies (LLCs). The signing individual must have the authority to enter the company into a contractual agreement and must be endorsed on State Fund policy records.

Note: If organization or corporation is nonprofit, provide Board Minutes. Often the policy is not updated with current members.

What determines the effective date of the Broker of Service letter?

The effective date of the Broker of Service letter will be determined on the basis of the date when State Fund receives the valid Broker of Service letter. Valid Broker of Service letters received on a weekend or Federal holiday or after 5:00 p.m., will be considered received on the next business day. State Fund’s business day ends at 5:00 p.m.

How and where can Broker of Service letters be sent?

Broker of Service letter can be sent to the State Fund Office servicing the account, or to any postal address, fax number and email address within State Fund offices. For your convenience, please refer to Broker of Record and Submissions Contact List.

Can a Broker of Service be appointed on a cancelled or expired brokered account?

Yes, for “claims servicing only” and upon request may be provided with the following claims servicing information:

1. Claims Narratives
2. Claims Resumes
3. Claims Review
4. Loss Runs

For the following servicing requests, State Fund requires that a signed written request specific for each document is received from insured. (No blanket request)

1. Cancellation Notices
2. Cancellation Warning Notices
3. Certificates (List of Issued Certificates)
4. Endorsements
5. Experience Modification
6. Payroll Reports
7. Premium Bills: Deposit Premium and Final Bill only
8. Rate Sheet (X-Mod Worksheet)

Note: State Fund is not paying commission to brokers working in this capacity.

Can a Broker of Service be appointed on direct accounts?

Yes. Upon request, a Broker of Service may be provided with the following servicing information:

1. Cancellation Notices
2. Cancellation Warning Notices
3. Certificates (List of Issued Certificates)
4. Claims Narratives
5. Claims Resumes
6. Claims Review
7. Endorsements
8. Experience Modification
9. Loss Runs
10. Payroll Reports
11. Premium Bills: Deposit Premium and Final Bill only
12. Rate Sheet (X-Mod Worksheet)

However, the ownership of direct accounts belongs to State Fund. As a result, State Fund is not paying commission to brokers working in this capacity on existing State Fund direct accounts or on direct accounts insured by State Fund within the past 12 months.

Renewal quote and all automated communications and documents go directly to the employer.

How does a broker/employer release Broker of Service representation on an account?

The broker/employer must submit a written request to the State Fund Office servicing the policy. The request must state: “release Broker of Service representation of this policy” or “remove as Broker of Service.”