Types of Agency Organization

Four agency systems are used in the life-insurance business, viz:

1. The general-agency system, according to which a general agent is given exclusive control of a certain territory with power to organize his efforts as he may deem best and to employ agents to assist him on such terms as he may see fit.

2. The branch-office system, according to which .branch offices are operated in various sections of the country, each being in charge of a manager and a cashier. Under this system the home office approves the contracts made with local agents, although the manager appoints and directs the same.

3. The direct-agency system, according "to which the agents are appointed and supervised from the home office with or without the assignment of exclusive territory.

4. The brokerage system (of relatively much less importance than the other plans), according to which the contract is effected directly with the company but without any arrangement for the allotment of exclusive territory or the payment of renewal commissions.