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general agency distribution system

Part of the insurance agency system for selling individual life insurance. Each field office is independent and under contract to the insurance company. The office is directed by a general agent who employs a staff and pays the salaries and office expenses. Sales agents contract with the general agent and not the insurance company. Usually the insurance company pays all commissions to the general agent who retains a portion of each commission (overriding commission) and the remaining commission is paid to the sales agent. However, some offices use a different procedure and pay commissions directly to the sales agents and overriding commissions directly to general agents.

General Agent

(i) In liability Insurance, an Agent who solicits business from the public and earns a commission from those Insurers the gent represents. (ii) In property Insurance, an individual having an exclusive territory and supervising an Insurer’s independent Agent’s in that territory. A general Agent does not sell Insurance Directly to the general public. (iii) In health Insurance, an individual appointed by an Insurer to conduct business in a given territory on a commission basis (perhaps also receiving additional expense allowances).

general agent (GA)

Insurance company representative licensed by the state that is under contract with an insurance company and sells insurance policies and services the policyholder for the insurer. Usually a general agent is in charge of a field office of the insurance company that uses a general agency distribution system and is compensated primarily by an overriding commission. Life insurance agents may also be called life underwriters . Also called insurance agent or insurance broker .