State RegulationsGA specificDifficulty 2/5
A licensed Georgia producer collects premium payments from policyowners and later spends part of the money on office expenses. Under Georgia law, how must premiums collected by a producer be handled?
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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 acts as a trustee of the insurer's and insured's money and may not commingle premium funds with personal or business funds. Commingling or misappropriation exposes the producer to license discipline and criminal liability.
Why the other options are wrong
- A) Depositing premiums into a personal account is exactly the commingling that O.C.G.A. § 33-23-35 forbids; the fiduciary duty attaches immediately upon collection, not after a commission is earned.
- C) Premiums are remitted to the insurer under the fiduciary rules of O.C.G.A. § 33-23-35; they are not paid to the Insurance Commissioner on any weekly schedule.
- D) The producer's fiduciary obligation begins when the premium is received; it does not wait for, and is not measured by, any free-look or return period on the policy.
Memory hook
Premium money is trust money — a Georgia producer holds it as a fiduciary, never as personal cash.