C11 Back of Textbook chapter 4-6 Exam | Questions & 100% Correct Answers

Explain how insurers get their products to the consumer through the independent agency and brokerage system, exclusive agency system and direct writing system (6) : Independent agency & brokerage -Large insurance companies appoint independent brokers to be their sales force and to bring clients to them. -They pay a commission for each policy they issue on behalf of the broker's clients -Client list usually belongs to the broker , not the insurer Exclusive Agency System -Market their policies through exclusive agents who represent only one company - Not employees of the insurance company -Paid by commission and must pay their own expenses 2 | P a g e -Client list belongs to insurer -Commission higher for new business to encourage production -ex. Statefarm Direct Writing Companies -Deal directly with the public -Employ a force of producers to sell policies to prospective insureds -Producers are employees who are paid by salary, salary and cash bonus, or salary plus commission based on sales -Commission higher for new business to encourage production -Business belongs to insurer -Companies issues and services the policies and bills and collects the premium