Section 1734 - Duties upon receipt of fiduciary fundsThis section applies to a person licensed, hereinafter "licensee," whether under a permanent license, restricted license, temporary license, or certificate of convenience, to act in any of the capacities specified in Section 1733. If fiduciary funds, as defined in Section 1733, are received by the licensee, the licensee shall do one of the following:
(a) Remit premiums, less commissions, and return premiums received or held by the licensee to the insurer or the person entitled thereto.(b) Maintain those fiduciary funds at all times in a trust account in a bank or savings and loan association, within any state of the United States, which account is insured by the Federal Deposit Insurance Corporation (FDIC), and is licensed by any state government within the United States or by the United States government, separate from any other account, in an amount at least equal to the premiums and return premiums, net of commissions, received by the licensee and unpaid to the persons entitled thereto or, at their direction or pursuant to written contract, for the account of those persons. However, that person may commingle with those fiduciary funds in the account those additional funds as the licensee may deem prudent for the purpose of advancing premiums, establishing reserves for the paying of return commissions, or for those contingencies as may arise in the licensee's business of receiving and transmitting premium or return premium funds.(c) Maintain those fiduciary funds pursuant to Section 1734.5.Amended by Stats 2021 ch 133 (SB 272),s 22, eff. 7/23/2021.Amended by Stats 2017 ch 69 (AB 1460),s 1, eff. 1/1/2018.