PLMImedium
A Michigan personal lines producer collects a homeowners premium from a client. How must the producer treat those funds under the Insurance Code?
As fiduciary funds held in trust for the insurer, separate from personal funds
BAs personal income that may be commingled with the producer's operating account
CAs a loan that the producer may invest in personal securities until remittance
DAs a non-refundable processing fee owned by the producer
Why this is the answer
MCL 500.1207 imposes a fiduciary duty on Michigan producers receiving premium funds. Premiums belong to the insurer (or the insured if a refund is due) and must be held separately from the producer's personal or operating accounts, typically in a designated premium trust account. Commingling, misappropriation, or failure to remit promptly violates the statute and can lead to license suspension or revocation under MCL 500.1239.
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