California Insurance Code & EthicsQuestion 34 of 158
A personal lines broker-agent collects premium from a homeowner. Under §1733, those funds are held in what capacity?
a.Personal property of the broker that may be used for business expenses
b.An interest-bearing investment account owned by the broker
c.Fiduciary funds held in trust for the insurer or the insured
d.Refundable retainer that can be commingled with operating funds
Explanation
Insurance Code §1733 provides that all funds received by a licensee acting as an agent or broker on account of any insurance transaction are received and held in a fiduciary capacity. The licensee must remit them to the insurer, insured, or other person entitled to them and may not divert them to personal use.
Law Reference: Cal. Ins. Code §1733Practice all 158 questions free — no signup required.
Related questions on this topic
- After receiving a complete proof of loss for a residential property claim, an insurer must accept or deny the claim, in whole or in part, within how many calendar days?
- Once the insurer and the insured reach written agreement on the amount payable for a homeowners loss, payment must be issued within how many calendar days?
- A California personal lines broker-agent renewing a license for the second time must complete how many hours of continuing education during each two-year license period, including the ethics requirement?
- Under §1668, the Commissioner may deny a personal lines broker-agent license application for any of the listed grounds. Which of the following is NOT a statutory ground for denial?
- An unlicensed assistant in a personal lines office quotes an auto policy premium to a walk-in customer and binds coverage by signing a temporary cover note. Under §1631, this conduct is:
- Which statement best captures the legal distinction between an 'insurance agent' and an 'insurance broker' under California law?
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