P&CPennsylvaniamedium
A Pennsylvania producer collects $4,200 in policyholder premium that is owed to the insurer. Under 40 P.S. § 310.96, how must the producer handle those funds?
Hold them as fiduciary funds, segregated from personal money, and remit promptly to the insurer
BDeposit them in a personal operating account and remit monthly to the insurer
CApply the producer's commission first, then forward the remaining balance to the insurer within 90 days
DPay them directly to the policyholder's mortgagee for escrow
Why this is the answer
Under 40 P.S. § 310.96 a Pennsylvania producer holds premium funds in a fiduciary capacity for the insurer or insured. The producer must segregate those funds from personal or operating money, typically in a trust or premium account, and remit them promptly in the ordinary course of business. Commingling, conversion, or failure to remit is grounds for license suspension or revocation under 40 P.S. § 310.91 and may trigger fraud exposure under 18 Pa.C.S. § 4117.
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