Final answer:
The life and health insurance marketing system with non-employee agents representing a single company is known as an exclusive or captive agency distribution system.
Step-by-step explanation:
The life and health insurance marketing system you are referring to employs non-employee agents who exclusively represent one insurance company and are compensated with an allowance to cover office expenses and staffing. This model is commonly associated with exclusive or captive agency distribution systems. The primary intent of these systems is to have dedicated agents who are committed to selling products of a single insurer, providing them with a sense of loyalty and providing the insurer with a controlled method of distributing their products.
In the U.S. health insurance market, challenges such as adverse selection are addressed by selling insurance through groups, often based on place of employment or through state government-sponsored health exchange markets like those established under The Affordable Care Act. Employers who provide health insurance help create a pooled risk environment, which is beneficial to the insurance companies. This system helps in mitigating the risk of insuring only high-risk individuals as the risk is spread across a larger group of insured parties.