In which insurance system is the agent considered an employee?

The direct writing system is characterized by insurers employing agents who are considered company employees rather than independent contractors. In this system, the agents do not operate their own business but instead represent the insurance company and promote its products solely. This structure allows the insurance company to maintain more control over the agents' activities, including branding, sales tactics, and customer service practices.

The agents in a direct writing system typically receive a salary along with commissions, which ensures they are focused on the company's offerings, rather than potentially representing multiple insurers, as seen in other systems. This employment model can lead to a more cohesive branding strategy and a standardized approach to customer interactions and policy management.

On the other hand, the exclusive agency system involves agents who work with one insurance company but are considered independent contractors. The independent agency system allows agents to represent multiple insurance carriers, operating their own businesses. Lastly, the direct response system utilizes advertising and marketing to sell insurance directly to consumers without the use of agents.