California Insurance Code & EthicsQuestion 53 of 315
Premiums collected by an agent from a policyholder, before being remitted to the insurer, are held by the agent in what capacity?
a.As a loan to the insurer
b.Joint capacity with the policyholder
c.Fiduciary capacity, in a premium trust fund
d.Personal capacity, with no special duty
Explanation
§1733-1734 require licensees to hold all funds received from premiums in a fiduciary capacity, typically in a separately identifiable premium trust fund. Commingling with personal funds is grounds for license discipline.
Law Reference: Cal. Ins. Code §1734Practice all 315 questions free — no signup required.
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Sen Lin, PrepPass Founder · Verified against California Life & Health Insurance License Exam · How we review
Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)