Broker transfer letters and AI confidentiality: what a letter of appointment gives away in ChatGPT or Claude.

When a client moves to a new broker, a letter of appointment tells the insurer to deal with the new broker and release the policy history. It looks like paperwork, which is why it is easy to drop into ChatGPT or Claude to tidy or to turn into a covering email. The signed letter and the new brokerage’s file note carry the client’s policy numbers, premiums, claims, its reasons for leaving the old broker and sometimes a note about who is able to sign. This page marks every item in a realistic transfer letter that the Code of Practice and the Privacy Act bear on, and shows how the same letter is handled on Ermos inside the brokerage.

The broker transfer letter

Signed by the client and lodged with the insurer before renewal so that the new broker can obtain the policy documents and claims history and negotiate the renewal.

An invented letter. The policy number is a placeholder. Hover or tap any highlighted item for the analysis; the full list is below.

What leaves the brokerage

1. 1
   The trust, the trustee and the directors

   A named family trust, its corporate trustee and two named directors. Personal information about the directors, and the structure through which the family holds property. Privacy Act guide.

2. 2
   The property and what is insured

   A named commercial building, its sum insured and the 12-month loss of rent limit. A statement of what the building is insured for and what rent it earns the family.

3. 3
   The policy number, renewal date and premium

   A policy reference, when it ends and what it costs. Confidential commercial terms, and a policy number is the key insurers use to find the policy.

4. 4
   The claims history

   A claim and its amount over five years. Claims history is what an insurer prices a risk on, and the client has authorised its release only to the new broker.

5. 5
   The reason for leaving, with a named broker

   A complaint about a named competitor, that it let an extension lapse. An allegation about a third party, drafted before it has been put to that brokerage.

6. 6
   The authority wording

   The authority for the insurer to release policy information and claims history to the new broker, and the statement that the letter overrides earlier appointments. One major insurer’s published instructions for a business policy transfer contain wording of this kind, and insurers’ requirements vary. The wording is standard and holds no client data.

7. 7
   The plan to sell

   That the trust may sell the property in 2027. A commercial intention the tenant, the other directors or a purchaser might not yet know.

8. 8
   The file note about who can sign

   An 81-year-old director’s diagnosis and a doubt about whether the signature is valid. Health information about an individual, which is sensitive information under the Privacy Act to the extent the brokerage is bound by it, and a legal question the brokerage has not resolved. Patient data guide.

9. 9
   The fee and the terms of engagement

   The broker’s fee and commission arrangement. Under the Code of Practice a brokerage’s terms of engagement include its remuneration (clause 4.2). It is information between the brokerage and its client.

What happens in Frontier Models (ChatGPT, Claude)

• The whole document is transmitted to the provider’s servers. On personal plans the user cannot choose where it is stored or processed, and for the major providers that has generally meant outside Australia, under that country’s legal process. Some business plans offer storage in Australia, but the provider still receives the content.
• On consumer tiers, prompts can be retained and used to train future models.
• The provider’s staff and systems can reach the content under the provider’s own policies.
• Once sent, the brokerage no longer controls it. Retention and deletion happen on the provider’s terms.

The same document on Ermos

Part of AI data leakage in insurance brokerages.

Common questions