State RegulationsGA specificDifficulty 1/5
Which practice violates Georgia's rules on the handling of premium funds?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under O.C.G.A. § 33-23-35, premiums are held in a fiduciary capacity and may not be commingled with the producer's personal funds. Sweeping client premium dollars into a personal checking account is the textbook commingling violation, because it erases the separation between trust money and the producer's own assets. Willful violation carries criminal exposure, escalating to a felony when the amounts involved are large.
Why the other options are wrong
- A) A separate fiduciary account is exactly the safeguard the statute contemplates, not a violation of it.
- B) Timely remittance within the settlement period is proper fiduciary performance, not misconduct.
- D) Commissions are the producer's own compensation once settlement occurs; retaining them is entirely lawful.
Memory hook
Personal checking plus client premiums equals commingling — keep the walls up.