In general insurance there are two letters which sound similar – a Letter of Authority and a Letter of Appointment. They have expressly different purposes for you, the insured, to give your ‘okay’ for Mitchell Insurance Management, as your insurance broker, to act in a specific capacity for you.

Letter of Authority

A Letter of Authority from you gives Mitchell Insurance Management the capacity to obtain information from insurers on your behalf so we may review and quote your insurances which are currently held by another broker. Or if your policy is held by another broker and you are experiencing problems with a difficult claim it gives us the ability to make enquiries on your behalf.

The letter may include certain exceptions and limits, such as:

• Restricting the amount of the time the letter of authority allows us to access information;
• Only allowing authority to retrieve information on specific insurances, eg insurance only relating to a specific asset;
• It may only allow us to access information on certain classes of insurances, for instance liability insurance only;
• The authority would usually exclude the terms of cover;
• The authority would include your claims history as relevant to the policy; and
• Exclude the details of the premiums previously paid.

A Letter of Authority does not entitle Mitchell Insurance Management to any commissions or payments going forward. The purpose is to expressly give the us the information required to be able to review and quote your insurances.

Letter of Appointment

A Letter of Appointment from you appoints Mitchell Insurance Management to manage your insurances going forward and to receive commission payments from the insurer for those insurances. The appointment may be for all of your insurances or for only specified insurances, and removes the previously appointed insurance broker from the policies.

Included in the appointment are all responsibilities ongoing for your insurances. The Letter of Appointment authorises us to be able to accept commissions and fees for service within the standards set by AFS licensing requirements through ASIC.

As your insurance broker, Mitchell Insurance Management’s duty is to follow your instructions. Either of the above situations can be exercised to potentially help you with your insurance program.

If you would like to know more on how Mitchell Insurance Management can support your activities, please contact us.