American Agency System
Definition of "American agency system"
Marketing of insurance through independent agents; also called independent agency system. Independent agents usually represent several insurance companies and try to insure the risk according to availability of coverage and most favorable price. Independent agents are paid a commission in the form of a percentage of the premiums generated by the policy sold. They own all the records of the policies sold and have the right to solicit renewals. They are not restricted to maintaining business with just one company and can transfer the business upon renewal to another company.
Popular Insurance Terms
Expense of soliciting and placing new insurance business on a company's books. It includes agent's commissions, underwriting expenses, medical and credit report fees, and marketing support ...
Table charting relative costs of a group of cash value life insurance policies derived by using the net cost method of comparing costs (traditional net cost method of comparing costs; net ...
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process of discovering sources of loss concerning the liability risk faced by individuals and business firms. The first step in risk management is to identify the causes of a loss by ...
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Fund that comes into existence because premiums for ordinary life insurance policies in their early years are higher than necessary for the pure cost of protection. These excess premiums, ...
Coverage for an insured firm if its business debtors fail to pay their obligations. The insured firm can be a manufacturer or a service organization but it cannot sell its products or ...
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