38.2-1813 - Reporting and accounting for premiums.
§ 38.2-1813. Reporting and accounting for premiums.
A. All premiums, return premiums, or other funds received in any manner by anagent or a surplus lines broker shall be held in a fiduciary capacity andshall be accounted for by such agent or surplus lines broker. The agent orsurplus lines broker shall, in the ordinary course of business, pay the fundsto the insured or his assignee, insurer, insurance premium finance company oragent entitled to the payment.
B. With the exception of premium funds made payable to insurers or insuredsfor remittance and funds referred to in subsection D of this section, on andafter January 1, 1993, all funds referred to in subsection A of this sectionshall be maintained in a fiduciary account separate from all other businessand personal funds. Funds deposited into the separate fiduciary account maynot be commingled or combined with other funds except for the purpose ofadvancing premiums, establishing reserves for the payment of return premiums,or establishing funds to maintain a minimum balance or to guarantee theadequacy of the account. The agent or surplus lines broker shall maintain anaccurate record and itemization of the funds deposited into this account. Thecommission portion of any premiums deposited to this separate account may bewithdrawn at the discretion of the agent or surplus lines broker.
C. For the purposes of this section, the separate fiduciary account of alicensed business entity shall be considered the fiduciary account of anindividual agent or surplus lines broker acting on behalf of the licensedbusiness entity.
D. This section shall not require any agent who is a duly appointed agent ofan insurer and who has a written contractual relationship with such insurerwhich includes provisions regarding remittance of funds to maintain aseparate fiduciary account for the funds. Such funds shall be held separatelyfrom any personal or nonbusiness funds and shall be reasonably ascertainablefrom the books of accounts and records of the agent.
(1979, c. 513, § 38.1-327.12; 1986, c. 562; 1992, c. 49; 1993, c. 145; 2001,c. 706.)