State RegulationsGA specificDifficulty 1/5
In Georgia, premiums collected by a licensed producer from applicants must be treated as:
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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 received by a producer are held in a fiduciary capacity - they belong to the transaction, not to the producer's pocket. The producer may not treat them as personal assets, and willful misappropriation is criminal: a misdemeanor, rising to a felony where the amount exceeds $1,000 under § 33-23-35(c). The fiduciary duty is the foundation for Georgia's commingling rules as well.
Why the other options are wrong
- A) Premiums are not the producer's income; § 33-23-35 imposes a fiduciary capacity on their handling from the moment of receipt.
- C) No ninety-day conversion rule exists; the fiduciary duty attaches immediately under O.C.G.A. § 33-23-35.
- D) Premiums are not a loan to the producer; they are fiduciary funds held for the insurer transaction.
Memory hook
Premiums pass through the producer, never into the pocket.