Current through Register Vol. 54, No. 52, December 28, 2024
Section 37a.22 - [Effective 2/12/2025] Producer accounts(a) Insurance producers who have the express written consent of their insurance entities to mingle all funds received or collected as an insurance producer with their own funds in accordance with section 696-A of the act (40 P.S. § 310.96), regarding fiduciary capacity of an insurance producer, may do so if the following exist: (1) Moneys held in a fiduciary capacity are reasonably ascertainable from the books of accounts and records of the insurance producers.(2) Amounts due entities are equal to or less than the combined accounts receivable and current bank balances.(b) Insurance producers who do not have the express consent of their insurance entities to mingle all funds received or collected as an insurance producer with their personal funds shall hold the funds separate from other funds in accordance with the following: (1) Insurance producers who do not make prompt remittance to their insurance entities may not deposit funds received or collected as an insurance producer in office operating accounts but shall keep the moneys in a separate bank account from which disbursement may not be made other than for the payment of premiums to the insurance entities, the return of premiums to the insured, the transfer of commissions or the withdrawal of voluntary deposits.(2) Voluntary deposits in the account for funds received or collected as an insurance producer in excess of premiums collected and unpaid to insurance entities may be made for the purpose of maintaining a minimum balance, to guarantee the adequacy of the account or for the purpose of the payment of premiums to the insurance entities in advance of their collection. These deposits may not be withdrawn except to the extent that the remaining balance is equal to the total of net premiums collected and unpaid to insurance entities.(3) The deposit of all funds received or collected as an insurance producer in a separate bank account may not be construed as a mingling by the producer of the net premium and of the commission portion of the premium. The commission portion of the premiums may be withdrawn from the separate bank account at the discretion of the insurance producer.(4) The maintenance in a separate bank account of at least the net balance of premiums collected and unpaid to the insurance entities by insurance producers shall be construed as compliant with this section and section 696-A of the act, if the funds so held are readily ascertainable from the books of account and records of producers.(5) Insurance producers who make prompt remittance of collections to their insurance entities need not maintain separate bank accounts for these collections. To constitute prompt remittance, payment to entities shall be remitted not later than the close of the fifth business day following receipt of the funds.(6) When both an operating account and an account for all funds received or collected are maintained by insurance producers under this section for purposes of segregating premiums collected, the funds account balance shall include moneys sufficient to pay premiums collected and any amount delinquent or in dispute with the insurer represented. Upon reconciliation of delinquent or disputed accounts, excess moneys remaining in the funds account may be withdrawn as if the excess moneys had been voluntary deposits.(7) Insurance producers may deposit funds received or collected as an insurance producer in an interest-bearing account when not required to make prompt remittance to the insurer of premium moneys, if all of the following are met: (i) The moneys are not placed in an account upon which a penalty may be levied against the principal for early withdrawal.(ii) The moneys are placed in an account insured by the United States Government or instruments secured by the United States Government.Adopted by Pennsylvania Bulletin, Vol 54, No. 50. December 14, 2024, effective 2/12/2025