The exclusive agency system is characterized by:

• A. Independent agents who represent multiple insurers
• B. Exclusive agents who represent a single insurer or group
• C. Brokers who work directly with customers
• D. Direct marketing by company employees

Answer: (B)

The question tests how insurance sales channels are structured, specifically what the exclusive agency system looks like. In this setup, exclusive agents are tied to a single insurer or a group of related insurers and are not free to represent competing companies. They sell only that insurer’s products and usually receive commissions from that insurer, with the insurer maintaining control over appointments, underwriting, and product offerings. This arrangement contrasts with the independent agency system, where agents represent multiple insurers and can place business with several companies, and with brokers or direct company sales, where the insured or the company directly handles the sale. Therefore, the description of exclusive agents who represent a single insurer or group best fits the exclusive agency system.