Think of a store shelf. Some shops stock only one brand, some stock many brands, and some brands sell straight from their own website. Insurance reaches buyers the same three ways, and the exam calls them distribution systems.
The agency system uses producers in the field:
Independent agent: represents several insurers, so the client can compare companies.
Captive (exclusive) agent: represents one insurer or one group of insurers only, and the insurer usually owns the customer records.
Broker: acts on the client's behalf rather than for an insurer.
Direct response: the insurer reaches the consumer itself through channels such as mail, television and telephone, with no field agent.
Online direct sales: the consumer buys on the insurer's own website. Like direct response, there is no field agent in between and no in-person meeting is needed. Neither system has anything to do with whether the insurer is admitted.