Glossary of Terms Used by AgentSync

Term	Definition
Addendum	An “addendum” is an additional document or attachment that is added to an insurance policy after it has been issued. An addendum may be added to an insurance policy to modify or clarify certain terms or conditions of the policy. It may also be added to include additional coverage, such as endorsements, riders, or exclusions.
Affiliation	AgentSync admins & org managers have the ability to create affiliations. These affiliations internally group agents by assigning the agents to affiliations. These are only seen by the org manager, producers cannot see what affiliations they’re tagged to..
Agency	An “agency” refers to a business or organization that is authorized to sell insurance policies on behalf of one or more insurance companies. An agency may also be referred to as an insurance agency, brokerage, or agent.
AML (Anti-Money Laundering) Approved Vendors	An “AML (Anti-Money Laundering) Approved Vendor” refers to a third-party service provider that has been approved by an insurance company or regulator to provide AML compliance services to insurance companies and their agents or brokers.
Annualization	“Annualization” refers to a method of calculating the premium for a policy that is not intended to run for a full year. This is typically used for policies that are written for a shorter period of time, such as six months or three months.
Annualization Value	The term “Annualization Value” refers to the amount of premium that would be charged for a policy if it were in effect for a full year, even if the policy is written for a shorter period of time. This is a method of calculating the premium for policies that are not intended to run for a full year. The annualization value is often used to compare policies with different term lengths, and to ensure consistency in pricing. Additionally, the annualization value is used to calculate the commission earned by agents or brokers, as their commission is typically a percentage of the annualization value.
Appointment	The term “Appointment” can be used interchangeably in the insurance industry. For contracting, it’s important to remember that an appointment is a relationship between an agent, a carrier, and a state. For instance, John Doe the agent is contracted with Mutual of Omaha (carrier). Mutual of Omaha will appoint John Doe in whichever states he wants to do business in.
Blanket E&O	A “Blanket E&O” policy helps protect a company or organization from potential lawsuits related to mistakes or negligence made by its employees or representatives. It covers a wide range of situations, providing broader coverage than a specific E&O policy that only covers certain types of risks. Many times agencies will apply for an E&O that covers their downline agents, this is so the individual agents do not have to purchase and E&O on their own. The carrier will ask for the blanket E&O certificate and cover page which lists all the agents covered under the blanket E&O.
Broker General Agents (BGAs)	“Broker General Agents (BGAs)” are intermediaries that work between insurance carriers and retail agents. They act as wholesalers and provide access to insurance products and underwriting expertise to retail agents who may not have direct access to the insurance carrier.
Business Entity/Firm	A “business entity” refers to a legal structure that is recognized as a separate entity from its owners or shareholders. Business entities can purchase insurance coverage to protect themselves from various risks and liabilities.
Captive Agent/Producer	A “Captive” agent/producer is someone who works exclusively for a single insurance company. Captive agents typically sell only the insurance products of the company they work for and do not offer products from other insurers. This type of agent is “captivated” by the single insurance company they represent, and their compensation may be tied to the amount of business they generate for that company.
Carrier	A “carrier” refers to a company that provides insurance coverage, such as an insurance company or health plan. Carriers assume the risk of providing insurance coverage to policyholders in exchange for premium payments.
Carrier Contract	A “carrier contract” in insurance refers to a legally binding agreement between an insurance carrier (such as an insurance company or health plan) and a policyholder or group sponsor. The contract outlines the terms and conditions of the insurance coverage being provided and defines the responsibilities of both parties.
Commission	“Commissions” refer to the compensation paid to insurance agents/brokers for selling insurance policies. Insurance companies rely on agents and brokers to market and sell their products to potential customers, and commissions are one way to incentivize these intermediaries to make sales.
Contract	The contract is the legally binding agreement between John Doe and Mutual of Omaha for the agent to solicit the carrier’s products. Whereas the appointment is the state regulation that allows John Doe to sell that carrier’s product in that state.
Contract Assignment	A “Contract Assignment” is a product + producer combination assigned to an organization. It has its own separate status that comes from Assignment Status.
Contract Assignment Change	A “Contract (Assignment) Change” is any change to a contract assignment, whether for an initial contract or other change type. It has its own separate status that comes from Assignment Status.
Contract Template	Org managers build “Contract Templates” based on BGA carrier relationships and business needs. These contract templates bundle contracting forms to compile all necessary contracting requirements. Once a producer is assigned to a contract template, they receive a package of contracting requirements and producer details that they must complete in order to contract with those carriers and their products.
Doing Business As (DBA)	“Doing Business As (DBA)” refers to a fictitious or assumed business name that an individual or company uses instead of its legal name when conducting business with customers or clients.
Downline	A “downline” refers to the network of agents/brokers who are directly or indirectly recruited and managed by another agent or broker. The agent or broker who recruits and manages the downline is often referred to as the “upline.”
Employer Identification Number (EIN)	An “Employer Identification Number (EIN)” is a unique identification number assigned by the Internal Revenue Service (IRS) to businesses for tax purposes. Insurance companies may require businesses to provide their EIN when applying for certain types of insurance coverage, such as workers’ compensation or liability insurance.
Errors and Omissions (E&O)	“Errors and omissions (E&O)” refer to professional liability insurance coverage that protects individuals and companies from claims of negligence, errors, or omissions made in the course of providing professional services to clients.
Errors and Omissions (E&O) Limit	An “errors and omissions (E&O) limit” refers to the maximum amount of coverage that an errors and omissions insurance policy will pay out in the event of a covered claim. The E&O limit is typically specified in the insurance policy and is chosen by the insured when purchasing the policy.
Field Marketing Organization (FMO)	A “Field Marketing Organization” (FMO) is a company that provides support and resources to insurance agents and brokers. FMOs work with multiple insurance carriers and offer a variety of insurance products to agents and brokers to sell to their clients. FMOs may provide training and education to agents, as well as access to technology, marketing materials, and administrative support. They may also negotiate contracts and commission rates with insurance carriers on behalf of their agents.
Form Name	A “form name” typically refers to the title or descriptive name given to a specific insurance policy form or contract.
Form Number	A “form number” is a unique identification number assigned to each type of insurance policy or contract. This number helps the insurance company identify the specific terms, coverage limits, and other details that apply to that policy.
Guarantee	In some cases where an agent has a significant background issue or poses a risk to the carrier, the carrier may require an upline or IMO to sign a “Guarantee Letter” on behalf of the agent. This letter effectively transfers the risk of contracting with the agent from the carrier to the upline or IMO, as a result, allowing the agent to get approved for contracting.
Hierarchy	A “hierarchy” refers to the organizational structure of an insurance company, which outlines the different levels of management, authority, and responsibility within the company. The hierarchy of an insurance company can vary depending on the size and complexity of the organization.
IGO	In good order
Independent Marketing Organization (IMO)	An “Independent Marketing Organization” (IMO) is a company that works with insurance agents and brokers to provide access to insurance products and support services. IMOs work with multiple insurance carriers and offer a range of insurance products to agents and brokers to sell to their clients. IMOs can also negotiate contracts and commission rates with insurance carriers on behalf of their agents, which can help them be more competitive in the marketplace.
Just In Time (JIT)	“Just In Time” (JIT) is a phrase used with carriers and states. JIT is a concept that refers to the practice of insurers providing coverage only when it is needed, rather than maintaining a large inventory of policies. This approach allows insurers to manage their risk more effectively by ensuring that they only provide coverage for risks that they are willing to assume. JIT insurance can also help insurers to reduce costs by avoiding the need to maintain a large portfolio of policies that may not be profitable. However, it is important for insurers to be able to respond quickly to requests for coverage to avoid potential lost business opportunities.
Letter of Explanation (LOE)	If an insurance agent has a background issue or has had one in the past, the carrier may require a “Letter of Explanation (LOE)” to be submitted along with the agent’s application. An LOE provides additional information or clarification about the issue in question and is reviewed by the carrier before deciding whether to approve the agent’s application.
Line of Authority (LOA)	A “Line of Authority” refers to a type of insurance license that permits an insurance producer (agent or broker) to sell and service a specific category of insurance products. Each Line of Authority requires a separate license, which is issued by the state insurance department or other regulatory body.
Line of Business	A “line of business” refers to a category of insurance products or services that an insurance company offers to its customers. Each line of business typically covers a specific type of risk or set of risks, and may have its own underwriting criteria, pricing structure, and coverage limits.
License Only Agent (LOA) aka Solicitor	An “LOA or License Only Agent”, also known as a “Solicitor,” is a commission level offered by carriers in which the agent does not receive any commission payment from the carrier. Instead, the commission goes to the upline, who is responsible for paying the writing agent. In most cases, an LOA agent is not required to provide a voided check with their contracting paperwork, as the commission payments are not made directly to them. This arrangement is often used when an agent is new to the business or is not yet producing enough business to warrant a higher commission level.
Managing General Agent (MGA)	A “Managing General Agent (MGA)” is a company or an individual who is appointed by an insurance company to manage underwriting, policy issuance, and claims handling on behalf of the insurer. MGAs act as intermediaries between insurance companies and insurance agents or brokers.
National Association Of Insurance Commissioner (NAIC)	The “National Association of Insurance Commissioners (NAIC)” is a non-profit organization in the United States that assists state insurance regulators in regulating the insurance industry. The NAIC develops model laws and regulations that states can adopt to ensure that insurance companies operate in a fair and competitive marketplace. The organization also provides a forum for regulators to share information and collaborate on issues affecting the insurance industry.
National Producer Number (NPN)	A “National Producer Number” (NPN) is a unique identification number assigned by the National Association of Insurance Commissioners (NAIC) to licensed insurance producers (agents and brokers) in the United States. The NPN serves as a national identifier for insurance producers and allows for easier tracking of their licensing and compliance information across different states.
NIGO	Not in good order
Non-Captive Agent/ Producer	A “Non-Captive” agent/producer is free to sell insurance products from multiple insurance companies, rather than being limited to a single company. These agents may also be referred to as independent agents or brokers.
Packet	A “Packet” refers to a group of contract assignment changes that are combined into a single PDF file and submitted to a carrier. Unlike contract assignments, a packet does not have a separate status. There are two types of packets: 1. Contract packet, also known as the producer packet, is the version of the PDF file that the producer or agent can view. 2. Submission packet is the version of the PDF file that the organization manager can view and submit to the carrier.
National Association Of Insurance Commissioner (NAIC)	The “National Association of Insurance Commissioners (NAIC)” is a non-profit organization in the United States that assists state insurance regulators in regulating the insurance industry. The NAIC develops model laws and regulations that states can adopt to ensure that insurance companies operate in a fair and competitive marketplace. The organization also provides a forum for regulators to share information and collaborate on issues affecting the insurance industry.
Packet Bundle	A “Packet Bundle” is a group of packets that are combined together. A packet bundle has a separate status that is determined by its “Packet Bundle Status”. There are two types of packet bundles: 1. Contract packet bundle, which is created by a producer or agent. 2. Submission packet bundle, which is created by an organization manager and submitted to the carrier.
Principal	A “principal” refers to a person or entity who hires an agent or broker to act on their behalf in negotiating, selling, or servicing insurance policies. The principal can be an individual or a business, and they are ultimately responsible for the actions of the agent or broker who is acting on their behalf.
Producer	A producer, also known as an agent, is a user within AgentSync Contracting. Producers are responsible for filling out their Producer Profile and completing contracting tasks. They can view all outstanding contracting tasking, and contract assignment details. They also have the ability to save workflows in progress and do business as a firm.
Proof of Production	“Proof of Production” is a requirement requested by carriers when an agent is contracting at a high commission level. The carrier may ask for proof that the agent has written a certain amount of premium, which can be demonstrated through commission statements or tax forms. This requirement is in place to ensure that agents contracting at high commission levels have a proven track record of writing a significant amount of premium.
Release/Transfer Form	When a producer wants to switch from one agency to another, many insurance companies require them to get a “Release” or “Transfer” form signed by their old agency. This form allows the producer to move to the new agency without any restrictions or issues.
Self-Release	Most carriers allow an agent to move their contract to another agency without a signed release or transfer form after being contracted for 6 months or 6 months from the last piece of business.
Tax Identification Number (TIN)	A “Tax Identification Number” (TIN) is a special number given by the government to individuals or businesses for tax purposes. An insurance company may ask for the TIN to identify who bought the insurance and to report any money earned from the policy to the government. This is important for accurate tax reporting by both the policyholder and the insurance company.
Tasks	A “Task” is an assigned item that is expected to be marked as “completed” by a person. A task can be associated with a contract assignment change.
Temporary License	A “Temporary License” is a license issued by some states to agents who only wish to be licensed for a short period of time. However, it is important to note that some carriers may not allow agents with temporary licenses to write business with them.
Vector One	“Vector One” is a credit reporting agency equivalent for the insurance industry. It is used to record any debit balance issues that agents may have with insurance companies, such as commission advances that they owe. When new agents apply to work with an insurance company, it is common practice for the company to check with Vector One to verify the agent’s creditworthiness and history of financial responsibility. This helps the insurance company to ensure that they are working with reliable and responsible agents.
Writing Number	A “writing number” is a number issued by the carrier that is to be used by the agent/firm when writing business. This is the unique identifier the carriers use for the agents/firms

Glossary of Terms Used by AgentSync

Unlocking Terminology: Your Guide to Common Contracting terms and AgentSync-Specific Jargon