Which act by a P&C licensee best illustrates a violation of the premium trust statutes (§1733-§1734)?
a.Remitting net premium to the insurer within the time stated in the agency agreement
b.Maintaining a separate fiduciary account labeled "premium trust"
c.Depositing client premiums into the broker's personal checking account to pay rent
d.Returning unearned premium to the insured within 25 days of cancellation
Explanation
Sections 1733-1734 require premiums to be held in fiduciary trust and not commingled or converted. Depositing client premiums into the broker's personal account is the textbook example of commingling and conversion. The other choices describe lawful conduct.
Law Reference: Cal. Ins. Code §1733This topic, taught in full in the California Property & Casualty Broker-Agent guide. California Property & Casualty Broker-Agent Study Guide — 2026 Edition — PDF + EPUB, $24.99 · 14-day refund →
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