PLNJmedium
A New Jersey personal lines producer collects a homeowners premium from a client. How must the producer handle those funds under N.J.A.C. 11:17A?
AAs personal income that may be deposited in the producer's general operating account, provided the premium is remitted to the insurer within 30 days
BAs a personal loan to the producer until the carrier statement is issued
CAs a non-refundable agency fee owned outright by the producer
As fiduciary funds deposited in a Premium Trust Fund Account, separate from personal and operating funds
Why this is the answer
N.J.A.C. 11:17A-1.6 requires a New Jersey producer to hold all premium funds in a separately titled Premium Trust Fund Account. Funds belong to the insurer (or to the insured if a return premium is due) and must be remitted in accordance with the producer's agreement with each carrier. Commingling is grounds for license action under N.J.S.A. 17:22A-40 and may also support a theft prosecution.
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