In the independent agency system, which of the following is true about independent agents?

• A. They represent only one insurer
• B. They retain ownership of policy records
• C. They are employed directly by the insurer
• D. They charge no commissions

Answer: (B)

Independent agents operate as representatives for multiple insurers, not a single company. A defining feature is that they keep ownership of the client policy records and files, which means the insured’s history and policy documents are managed by the agent’s agency rather than owned by one insurer. This setup supports their independence and ability to work with different carriers while maintaining client continuity.

They aren’t employees of an insurer; they’re independent contractors who contract with several insurers to sell their products. And they earn commissions from the insurers they represent, rather than charging no commissions. So retaining ownership of policy records is the best statement about independent agents in this system.