Or. Admin. Code § 836-074-0025

Current through Register Vol. 63, No. 10, October 1, 2024

Section 836-074-0025 - Deposit and Payment of Funds

An insurance producer shall deposit and pay premium funds received as provided in this rule. When deposit is required, the insurance producer shall deposit the funds not later than the seventh day after they are received. When a payment is owed to an insured, the insurance producer shall pay the premium funds not later than the 30th day after the receipt of the funds. The following provisions also apply to the deposit and payment of premium funds:

(1) A return premium and the insurance producer's share of any premium funds required to be refunded, including unearned commissions, shall be deposited and paid to the insured or other person entitled to the funds. When a return premium is paid in the form of a credit to the account of an insurance producer, the insurance producer shall deposit the equivalent of the credit in money into the account.

(2) When an insurance producer receives a payment of premium funds in the form of an instrument, such as a check, made payable to an insurer, another insurance producer, a surplus line licensee or a premium finance company, the insurance producer may forward the instrument directly to the payee without depositing the instrument in the trust account, if that can be done without endorsement or alteration. Such a payment need not be accounted for with respect to the trust account.

(3) Except as otherwise provided in this section, when an insurance producer receives a payment of premium funds in the form of cash or an instrument requiring endorsement by the insurance producer, the insurance producer shall deposit the premium funds in the trust account or endorse and forward the instrument to the insurer, another insurance producer, the surplus lines licensee or the premium finance company that is entitled to the premium funds received. An insurance producer:

(a) Need not deposit premium funds that are paid in cash if the insurance producer does not maintain a premium trust account because the insurance producer does not engage in transactions for which a trust account must be established, and if the insurance producer complies with all of the following requirements:

(A) Upon receiving the cash, the insurance producer must give the payor a receipt showing the amount of money received, the date on which the money was received, the policy number and the name of the policyholder;

(B) Within 72 hours after receiving the cash, the insurance producer must convert the cash into a guaranteed negotiable instrument, such as a money order, certified check or cashier's check, that is made out to the insurer and forward the money order or check to the insurer;

(C) The insurance producer must keep records of such moneys so received and forwarded.

(b) May deposit the premium funds under procedures established by the insurer entitled to the funds if the procedures meet the requirements of this section and the insurer has given those procedures to the insurance producer in writing. Such other procedures must:

(A) Recognize that the insurance producer is receiving premiums directly on behalf of the insurer;

(B) Direct the insurance producer to give adequate receipts on behalf of the insurer;

(C) Require deposit of the proceeds into the account of the insurer.

(4) An insurance producer may remove gross commissions from the trust account and pay them to the operating account of the insurance producer.

(5) An insurance producer shall not pay out premium funds from a trust account to pay premiums that have not been paid into the trust account.

Or. Admin. Code § 836-074-0025

ID 9-1987, f. 12-22-87, cert. ef. 1-1-88; ID 8-2005, f. 5-18-05, cert. ef. 8-1-05

Stat. Auth.: ORS 731

Stats. Implemented: ORS 744.083