State RegulationsGA specificDifficulty 3/5
A Georgia producer collects premiums from clients, deposits them into his personal operating account, and later pays the insurers from that account after using part of the balance for personal expenses. Which statement is correct under Georgia's premium fiduciary rules?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under O.C.G.A. § 33-23-35, a producer receives premiums in a fiduciary capacity and may not commingle them with personal funds. Willful violation is a misdemeanor, and under O.C.G.A. § 33-23-35(c) felony treatment can attach when amounts are large enough, with license discipline by the Insurance Commissioner possible in any event.
Why the other options are wrong
- A) Eventual remittance does not cure commingling; O.C.G.A. § 33-23-35 imposes a fiduciary duty from the moment premiums are received.
- C) The interest status of the account is irrelevant; O.C.G.A. § 33-23-35 forbids commingling with personal funds outright.
- D) The producer holding premium money is the fiduciary under O.C.G.A. § 33-23-35; the duty is not exclusive to insurers.
Memory hook
Premium money is trust money — fiduciary hands only, never your own pocket.