State RegulationsGA specificDifficulty 1/5
When a Georgia producer collects a premium from an applicant, the producer holds those funds:
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under O.C.G.A. § 33-23-35, premiums collected by a Georgia producer are held in a fiduciary capacity — the producer is a trustee for the insurer, the applicant, or both, depending on the status of the transaction. The funds are not the producer's property, and willful conversion of them carries criminal exposure. This fiduciary status is the foundation for the separate-account discipline and the commingling prohibition.
Why the other options are wrong
- A) The producer never owns the premium; ownership stays with the applicant or insurer as the fiduciary law provides.
- C) Collected premiums are not loans to the producer; treating them as borrowed money is precisely the misuse the statute targets.
- D) There is no automatic joint-ownership rule; the producer holds the funds as fiduciary, not as co-owner with the insurer.
Memory hook
Premiums in hand = trust in hand: the producer is a fiduciary, not an owner.