Fiduciary accounts: Deposits; records; withdrawals.
1. All insurance charges and premiums collected by an administrator on behalf of an insurer and return premiums received from an insurer are held by the administrator in a fiduciary capacity.
2. Money must be remitted within 15 days to the person or persons entitled to it, or be deposited within 15 days in one or more fiduciary accounts established and maintained by the administrator in a bank, credit union or other financial institution in this state. The fiduciary accounts must be separate from the personal or business accounts of the administrator.
3. If charges or premiums deposited in an account have been collected for or on behalf of more than one insurer, the administrator shall cause the bank, credit union or other financial institution where the fiduciary account is maintained to record clearly the deposits and withdrawals from the account on behalf of each insurer.
4. The administrator shall promptly obtain and keep copies of the records of each fiduciary account and shall furnish any insurer with copies of the records which pertain to him upon demand of the insurer.
5. The administrator shall not pay any claim by withdrawing money from his fiduciary account in which premiums or charges are deposited.
6. Withdrawals must be made as provided in the agreement between the insurer and the administrator for:
(a) Remittance to the insurer.
(b) Deposit in an account maintained in the name of the insurer.
(c) Transfer to and deposit in an account for the payment of claims.
(d) Payment to a group policyholder for remittance to the insurer entitled to the money.
(e) Payment to the administrator of his commission, fees or charges.
(f) Remittance of return premiums to persons entitled to them.
7. The administrator shall maintain copies of all records relating to deposits or withdrawals and, upon the request of an insurer, provide the insurer with copies of those records.
Last modified: February 27, 2006