Trust account solvency management is part of insurance agents/brokers’
fiduciary obligations. Premium funds received by insurance
agents/brokers in a fiduciary capacity must be maintained
in separate trust bank accounts and their solvency secured.
Trust account management is labor intensive and costly. It
requires adequate financial tools and a uniform reporting
system.
Class
topics:
v
TA
operation vs. agency business operation
- Distinct
operations with different management
standards
- TA
operation objectives
- TA
operation complexity
v
TA
management functions
- Premiums
Receivable management
- Agency
commission management
- Company
remittance management
- Return
premium credit and refunds
v
TA
management’s objectives:
- Production
management
- Financial
management
v
Premium
accounting
v
Definition
of TA solvency
v
Financial
solvency reporting
- Premium
Float Statement
- Balance
Sheet
- Trust
Funds Beneficiaries Statement
v
Documents
record keeping
