Code of Maine Rules
02 - DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION
031 - BUREAU OF INSURANCE
Chapter 540 - PREMIUM TRUST ACCOUNT FIDUCIARY DUTIES
Section 031-540-4 - REQUIREMENTS FOR PREMIUM TRUST ACCOUNTS

Universal Citation: 02 ME Code Rules ยง 031-540-4

Current through 2024-38, September 18, 2024

A. A premium trust account shall be in the name of the insurance producer or the producer's agency and include the words "premium trust account." Checks drawn on the trust account shall contain the insurance producer's or insurance agency's name and the words "premium trust account." If a producer or agency business name is used, it must be a name under which the producer or agency is licensed. Notwithstanding this subsection, insurance producers and agencies may continue to use supplies of noncomplying checks existing on the effective date of this Rule.

B. A non-licensee may not be a signatory on a licensee's trust account, unless the non-licensee is an employee of the licensee and has specific written responsibility for the licensee's trust account.

C. An insurance producer shall not deposit any funds other than premiums, commissions, and return premiums to a premium trust account, except as follows:

(1) Funds contributed by or on behalf of the producer to the extent reasonably sufficient to pay bank charges;

(2) Funds an insurance producer may deem necessary for advancing premiums or establishing reserves for the paying of return premiums;

(3) Fees paid by or on behalf of the policyholder as permitted under 24-A M.R.S. §1450(3);

(4) Nonadmitted premium taxes payable by the producer and premium tax refunds received by the producer; and

(5) Funds for contingencies that may arise in the course of receiving and transmitting premiums, return premiums, or other fiduciary funds.

D. Disbursements or withdrawals from a premium trust account shall be made only for:

(1) Charges imposed by the financial institution for operating the premium trust account;

(2) Payments of premiums and return premiums directly to the persons entitled thereto, including any amounts identified as relating to premium taxes on admitted insurance;

(3) Payments of earned compensation to the insurance producer, but only to the extent that the funds were held in the trust account as unearned compensation;

(4) Payments of earned compensation belonging to another insurance producer as provided under 24-A M.R.S. §1450, but only to the extent that the funds could otherwise be withdrawn as earned compensation under Paragraph (3);

(5) Withdrawals of contributed reserve funds belonging to the producer, to the extent that they are no longer needed for the purposes for which they were contributed; and

(6) Transfers of fiduciary funds to another premium trust account which meets the requirements of this section.

E. An insurance producer that is a business entity may use one or more premium trust accounts for premiums and return premiums received by its affiliated producers. The affiliated producers shall deposit these funds directly into the premium trust account of the business entity.

F. An insurance producer who is employed by another insurance producer may, if authorized by the appointing insurer, deposit premiums and return premiums into the premium trust account of the employing insurance producer.

G. A premium trust account may be, but is not required to be, an interest-bearing account. Absent any agreement to the contrary between the insurance producer and an affected customer or insurer, the producer may use interest to offset bank charges or may treat the interest as reserve funds that may be withdrawn when no longer needed for that purpose.

H. A nonresident producer may fulfill his or her fiduciary obligation by holding Maine fiduciary funds in a trust account maintained in compliance with the requirements of the producer's state of residence and the requirements of the state where the account is maintained if different, if the Superintendent determines that those requirements provide a level of protection substantially equivalent to the requirements of this Rule.

Disclaimer: These regulations may not be the most recent version. Maine may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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