An insurance broker engages in selling insurance, but is independent of any particular insurance carrier. An insurance agent, on the other hand, represents only one insurance carrier, selling products for that carrier alone and no others. Through affiliation with just one insurance company, the agent maintains a strict alliance to that company and stands in confidential relationship with the company. In that sense, the insurance agent does not represent the buyer of insurance, but only the seller. Alternatively, the insurance broker works with a number of different carriers so that the broker may secure the most effective coverage for an insurance buyer. Brokers may represent insurance buyers seeking coverage. The functions of agent and broker are similar, but insurance policies each has available for sale and methods of selling differ. An insurance broker may be thought of as an independent insurance agent, and in some cases brokers are referred to in this way. Insurance agents and brokers are both licensed by state agencies in the United States and similar agencies in other countries. In Australia, for instance, licensing is through the Australian Securities and Investments Commission. In American states, licensing procedures and requirements are different for agents and brokers. Requirements also vary some from state to state. Both agents and brokers must pass an examination that is specific to the job they will perform. The agent's examination tests general knowledge and understanding of principals of insurance, including licensing requirements, types of insurance available, specific details of various types of coverage, along with annuities and other insurance-related investments. There are courses and study materials available for the agent's exam, and most applicants complete one or more courses before taking the exam. The insurance broker must pass the same exam as the agent, but must also pass the supplementary broker's exam. Brokers are expected to have a much higher degree of knowledge than agents, and the broker exam is designed to measure that knowledge. The broker is tested on state and federal regulations over insurance and insurance sellers; general insurance concepts, including risk management and methods of risk adjustment; rules of agency; contracts as employed in insurance; premium determination; and specifics of various types of insurance, including life, health, and property and casualty; and concepts of annuities, as offered by insurance carriers. The broker examination requires advanced knowledge of many concepts pertaining to insurance and the selling of insurance. In some states, before someone can become an insurance broker, they must first work as agent for a period of one year or longer. Some states also require a bond from a broker to ensure the broker's fiduciary responsibility regarding premiums. Some states have come to blend the distinction between agent and broker. In some states, there is no longer a separate broker's designation, but instead what is called Producer. The Producer combines the functions of agent and broker. Where the distinction still exists, insurance brokers and insurance agents perform similar and sometimes even identical functions in the insurance field. It is sometimes considered advantageous to a policyholder to deal with a broker rather than an agent because the broker can get quotes and terms from several different carriers, in an attempt to obtain the most effective and cost efficient coverage available. Brokers work on commission just like agents, and the cost of buying insurance through a broker will be the same as through an agent. The important distinction is that an agent works for just one insurance carrier, and does not represent the buyer. A broker works with many different carriers, and can represent the insurance buyer directly.