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
Accrediting body for the CPCU (Chartered Property and Casualty Underwriter) designation. The institute provides undergraduate and continuing education in property and casualty insurance ...
Reinsurance of & re insurer such that the re insurer protects itself from a catastrophe occurrence. Just as an insurer must decide to cede to the re insurer a portion of a risk it has ...
Right to insurable interest in property such as the right of a secured creditor in the property pledged as security. ...
Clause in a surety bond contract providing for restoration of coverage after a loss without requirement of a restoration premium. ...
Lump sum premium paid in advance instead of the frequency of premium payments stipulated in the insurance policy. This lump sum premium payment will be less than the present value of the ...
Offer and acceptance upon which an agreement is based. For a contract to be legal (and thus enforceable in a court of law), an offer must be made by one party to another party, who accepts ...
Unit of the life office management association (LOMA), which prepares and administers educational materials for the Fellow Life Management Institute (FLMI) Program. Upon successful ...
Length of time required to amortize the excess expenses of acquiring a given group of life insurance policies. In acquiring a policy, a life insurance company may incur expenses (such as ...
Personal property insurance that provides all-risks coverage for wedding presents, wherever they may be in the world, until they are permanently located. Because the new owners of wedding ...
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