State RegulationsGA specificDifficulty 2/5
A Georgia producer collects premium payments from clients and deposits them into his personal checking account, using the funds to cover personal expenses until commissions are paid. Under Georgia law, this conduct is best described as:
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under O.C.G.A. § 33-23-35, premiums collected by a Georgia producer are held in a fiduciary capacity and must not be commingled with the producer's own funds; using client premium money for personal expenses breaches that fiduciary duty. Willful violation is a crime — a misdemeanor, rising to a felony where the amount involved exceeds $1,000 — and it also exposes the producer's license to disciplinary action by the Insurance Commissioner.
Why the other options are wrong
- A) A temporary repayment intent is no defense; the duty is to hold premiums fiduciarily and unmixed with personal funds at all times.
- B) Collected premiums remain fiduciary funds owed to the insurer or returnable to clients; they do not become the producer's property on collection.
- C) Georgia law requires fiduciary handling and separation from personal accounts; it does not direct producers to house premium funds in personal interest-bearing accounts.
Memory hook
Premiums are held in trust — your wallet is off-limits.