means of selling and servicing property and casualty insurance through agents who represent different companies. The agents own the records of the policies they sell.

company formed to insure the risks of its parent corporation. Reasons for forming a captive insurance company include:

1. Instances when insurance cannot be purchased from commercial insurance companies for a business risk. In many instances companies within an industry form a joint captive insurance company for that reason.
2. Premiums paid to a captive insurance company are deductible as a business expense for tax purposes according to the Internal Revenue Service. However, sums set aside in a self insurance program are not deductible as a business expense.
3. Insurance can be obtained through the international reinsurance market at a more favorable premium, with higher limits of coverage.
4. Investment returns can be obtained directly on its invested capital.

However, competent personnel to manage and staff the company could be excessively expensive; and further, a catastrophic occurrence or series of occurrences could bankrupt the company.

independent service organization that contracts with advertisers (firms or individuals attempting to find customers for their products and services) to manage their advertising. Historically, advertising agency services are of a creative nature, but the agency concept has expanded to include research services and media planning and buying. Agencies are typically classified by the type of business they handle (e.g., financial, industrial, or consumer packaged goods) or the range of services they offer (e.g., creative, media, or full service).

Compensation for services is derived from three different sources: (1) 15% commissions from the media on the rate charged for media space or time; (2) fees charged for services (usually noncommissionable, such as a market survey); however, situations will occur when the price-value relationship between media placement and creative services is out of balance (e.g., when a client uses the same broadcast commercial for a long period of time, incurring no creative costs, but incurring millions of dollars in broadcast billing), and agencies will be compensated by the substitution of a fee system in place of the 15% commission; and (3) percentage charges on materials and services used in the preparation of advertisements; in this area, clients are charged cost plus 17.65%

The structure of a typical full-service advertising agency is shown in the table below. In smaller agencies, many of these jobs will be combined or filled by freelancers. Additionally, some smaller agencies will hire outside companies to supply the services that are provided by entire departments in the larger agency.

business that sells periodical subscriptions to the public in return for a commission from the publisher, which is expressed in terms of a percentage of the subscription selling price. There are various types of subscription agents, who earn commissions ranging from 100% to 5% of the selling price, depending upon how badly the publisher needs them and the subscriptions they bring in. Most subscription agents handle more than one publication. Publishers employ subscription agents because the publishers may not have the financial resources to sell as many subscriptions as agents can or as quickly as agents can or because a publisher may not want to spend money up front to sell subscriptions.