R590. Insurance, Administration.R590-170. Fiduciary and Trust Account Obligations.
R590-170-1. Authority.
This rule is promulgated by the commissioner pursuant to Section 31A-2-201.
R590-170-2. Purpose and Scope.
(1) The purpose of this rule is to set minimum standards for a licensee's trust account obligations.
(2) This rule applies to a licensee holding funds in a fiduciary capacity.
R590-170-3. Definitions.
Terms used in this rule are defined in Section 31A-1-301. Additional terms are defined as follows:
(1) "Trust account" means a checking or savings account where funds are held in a fiduciary capacity.
(2) "Accounts receivable" means a licensee's invoiced premiums, fees, or taxes.
(3) "Accounts payable" means:
(a) premiums or fees due to insurers that a licensee is responsible for invoicing and collecting from insureds on an insurer or licensee's behalf; and
(b) premium taxes due to taxing entities.
(4) "Licensee" means a person licensed under:
(a) Title 31A, Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and Reinsurance Intermediaries; or
(b) Title 31A, Chapter 25, Third Party Administrators.
R590-170-4. Establishing a Trust Account.
(1)(a) Each record relating to a trust account shall be identified with the wording "trust account" or wording similar to the term "trust account," including the term "premium fund account."
(b) A trust account record includes a:
(i) check;
(ii) bank statement;
(iii) general ledger; or
(iv) bank-retained record pertaining to the trust account.
(2) A licensee shall open a trust account with a Federal Employer Identification number or a Social Security number.
(3)(a) A trust account shall be a separate and distinct account from the licensee's operating and personal accounts.
(b) The trust account shall have:
(i) a separate account number;
(ii) a separate account register; and
(iii) separate checks, deposit slips, and withdrawal slips.
(4) A person other than a licensee may be a signatory on a licensee's trust account only if that person:
(a) is an employee of the licensee; and
(b) has specific responsibility for the licensee's trust account.
R590-170-5. Maintaining a Trust Account.
(1) Funds deposited into a trust account shall be limited to:
(a) premiums, which may include commissions;
(b) return premiums;
(c) fees or taxes paid with premiums;
(d) financed premiums;
(e) funds held pursuant to a third-party administrator contract;
(f) funds deposited with a title insurance agent regarding an escrow settlement or closing;
(g) funds necessary to cover trust account bank charges; and
(h) interest on the trust account, except as provided under Subsection 31A-23a-406(2)(b).
(2) Disbursements from a trust account shall be limited to:
(a) premiums paid to insurers;
(b) return premiums to policyholders;
(c) commission and fee transfers;
(d) fees or taxes collected with premiums paid to an insurer or taxing authority;
(e) funds paid pursuant to a third-party administrator contract;
(f) funds a title insurance agent disburses regarding an escrow settlement or closing; and
(g) accrued interest transfers.
(3) Personal or business expenses may not be paid from a trust account, even if the trust account has sufficient commissions to cover the personal or business expenses.
(4) A commission may not be disbursed from a trust account before the beginning of the policy period for which the premium is collected.
