An insurance producer shall deposit and pay premium funds
received as provided in this rule. When deposit is required, the insurance
producer shall deposit the funds not later than the seventh day after they are
received. When a payment is owed to an insured, the insurance producer shall
pay the premium funds not later than the 30th day after the receipt of the
funds. The following provisions also apply to the deposit and payment of
premium funds:
(1) A return premium
and the insurance producer's share of any premium funds required to be
refunded, including unearned commissions, shall be deposited and paid to the
insured or other person entitled to the funds. When a return premium is paid in
the form of a credit to the account of an insurance producer, the insurance
producer shall deposit the equivalent of the credit in money into the
account.
(2) When an insurance
producer receives a payment of premium funds in the form of an instrument, such
as a check, made payable to an insurer, another insurance producer, a surplus
line licensee or a premium finance company, the insurance producer may forward
the instrument directly to the payee without depositing the instrument in the
trust account, if that can be done without endorsement or alteration. Such a
payment need not be accounted for with respect to the trust account.
(3) Except as otherwise provided in this
section, when an insurance producer receives a payment of premium funds in the
form of cash or an instrument requiring endorsement by the insurance producer,
the insurance producer shall deposit the premium funds in the trust account or
endorse and forward the instrument to the insurer, another insurance producer,
the surplus lines licensee or the premium finance company that is entitled to
the premium funds received. An insurance producer:
(a) Need not deposit premium funds that are
paid in cash if the insurance producer does not maintain a premium trust
account because the insurance producer does not engage in transactions for
which a trust account must be established, and if the insurance producer
complies with all of the following requirements:
(A) Upon receiving the cash, the insurance
producer must give the payor a receipt showing the amount of money received,
the date on which the money was received, the policy number and the name of the
policyholder;
(B) Within 72 hours
after receiving the cash, the insurance producer must convert the cash into a
guaranteed negotiable instrument, such as a money order, certified check or
cashier's check, that is made out to the insurer and forward the money order or
check to the insurer;
(C) The
insurance producer must keep records of such moneys so received and
forwarded.
(b) May
deposit the premium funds under procedures established by the insurer entitled
to the funds if the procedures meet the requirements of this section and the
insurer has given those procedures to the insurance producer in writing. Such
other procedures must:
(A) Recognize that the
insurance producer is receiving premiums directly on behalf of the
insurer;
(B) Direct the insurance
producer to give adequate receipts on behalf of the insurer;
(C) Require deposit of the proceeds into the
account of the insurer.
(4) An insurance producer may remove gross
commissions from the trust account and pay them to the operating account of the
insurance producer.
(5) An
insurance producer shall not pay out premium funds from a trust account to pay
premiums that have not been paid into the trust account.
Notes
Or. Admin. Code
§
836-074-0025
ID 9-1987, f. 12-22-87,
cert. ef. 1-1-88; ID 8-2005, f. 5-18-05, cert. ef.
8-1-05
Stat. Auth.: ORS 731
Stats. Implemented: ORS
744.083
