State RegulationsGA specificDifficulty 1/5
Under Georgia law, premiums collected by a licensed producer from policyholders are held by the producer:
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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, a producer who receives premiums holds them in a fiduciary capacity and may not treat them as personal funds. Willful misuse of fiduciary premium funds is a crime — a misdemeanor, rising to a felony when the amount involved exceeds $1,000 under O.C.G.A. § 33-23-35(c).
Why the other options are wrong
- A) Fiduciary funds never become the producer's personal property, even temporarily before remittance.
- B) Commissions are earned under the agency contract; premiums remain trust funds owed to the insurer or policyholder.
- D) No state-controlled joint account exists; the duty of fiduciary handling rests on the producer himself.
Memory hook
Premiums pass through your hands — they were never yours.