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Insurance Fiduciary Duty and Trust Accounts

Insurance Fiduciary Duty and Trust Accounts

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Quick Overview

P&C insurance agents & brokers are mandated by state laws to receive transacted premiums in a fiduciary capacity, that is, not as owners but "trustees" or "custodians" of premium funds. Fiduciary relationship of independent agents and brokers with the owners of premium funds defines the essence of insurance fiduciary duty. Premiums and return premiums must be maintained in a "trust" bank account, separate from the agency business operating funds, and be disbursed only to their legal owners.

$129.00

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Duration 1 hour
Location Online Webinar
Formats On-Demand
Instructor Chris MarinescuChris Marinescu

P&C insurance agents & brokers are mandated by state laws to receive transacted premiums in a fiduciary capacity, that is, not as owners but "trustees" or "custodians" of premium funds. Fiduciary relationship of independent agents and brokers with the owners of premium funds defines the essence of insurance fiduciary duty. Premiums and return premiums must be maintained in a "trust" bank account, separate from the agency business operating funds, and be disbursed only to their legal owners.

Insurance trust accounting is complex due to the unique character of insurance premium transaction. All attempts to customize business general ledger accounting to insurance trust financial management have remained futile. Despite the fact they own the insurance trust bank account, agency owners have been unable to this day to monitor and control its financial solvency and therefore compliance with fiduciary mandates.

As agency owners and "custodians" of premium funds, independent insurance agents and brokers are personally held responsible for violation of fiduciary duty. Many states have on the books the loss of business license and/or legal prosecution for theft for violations of fiduciary duty.

$129.00
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