§ 56-6-406 — Administrator's duties as fiduciary

All insurance charges or premiums collected by an administrator on behalf of or for an insurer or insurers, and return premiums received from the insurer or insurers, shall be held by the administrator in a fiduciary capacity. The funds shall be immediately remitted to the person or persons entitled to the funds, or shall be deposited promptly in a fiduciary bank account established and maintained by the administrator. If charges or premiums so deposited have been collected on behalf of or for more than one (1) insurer, the administrator shall cause the bank in which the fiduciary account is maintained to keep records clearly recording the deposits in and withdrawal from the account on behalf of or for each insurer. The administrator shall promptly obtain and keep copies of all the records and, upon request of an insurer, shall furnish the insurer with copies of the records pertaining to deposits and withdrawals on behalf of or for the insurer. The administrator shall not pay any claim by withdrawals from the fiduciary account. Withdrawals from the account shall be made, as provided in the written agreement between the administrator and the insurer, for: (1) Remittance to an insurer entitled to the remittance; (2) Deposit in an account maintained in the name of the insurer; (3) Transfer to and deposit in a claims paying account, with claims to be paid as provided in § 56-6-407 ; (4) Payment to a group policyholder for remittance to the insured entitled to the remittance; (5) Payment to the administrator of its commission, fees or charges; or (6) Remittance of return premiums to the person or persons entitled to the remittance.

Legislative History

Acts 1980, ch. 640, § 6.