California Personal Lines Broker Practice Test 2025 - Free Practice Questions and Study Guide

In an independent agency system, the agency has agreements with multiple insurers and operates as a separate entity. This structure allows the agency to own the expiration list, which consists of the records of the clients’ policy renewal dates and details. Since the agency represents various insurers, it has the prerogative to handle renewals and other client relationships independently.

In contrast, the direct writing system and exclusive agency system are structured such that the insurer has a more direct relationship with the policyholder. In these systems, the insurer typically retains ownership of the expiration list, which means they have control over the renewal process and customer relationships directly.

The direct response system, which utilizes marketing strategies that generate leads directly from consumers (such as online or telephone solicitations), also means that the insurer retains ownership of customer information and expiration lists.

Thus, in the independent agency system, the agents can maintain their own lists, which allows them to serve their clients with more autonomy. This characteristic distinguishes it from the other systems where the insurer retains ownership of customer data, including expiration lists.