§ 27-20.7-8 - Premium collection and payment of claims. - Rhode Island Statutes

SECTION 27-20.7-8

   § 27-20.7-8  Premium collection and paymentof claims. – (a) All insurance charges or premiums collected by an administrator on behalfof or for an insurer or insurers, and the return of premiums received from thatinsurer or insurers, shall be held by the administrator in a fiduciarycapacity. The funds shall be immediately remitted to the person or personsentitled to them or shall be deposited promptly in a fiduciary accountestablished and maintained by the administrator in a federally or state insuredfinancial institution. The written agreement between the administrator and theinsurer shall provide for the administrator to periodically render anaccounting to the insurer detailing all transactions performed by theadministrator pertaining to the business underwritten by the insurer.

   (b) If charges or premiums deposited in a fiduciary accounthave been collected on behalf of or for one or more insurers, the administratorshall keep records clearly recording the deposits in and withdrawals from theaccount on behalf of each insurer. The administrator shall keep copies of allthe records and, upon requests of an insurer, shall furnish the insurer withcopies of the records pertaining to the deposits and withdrawals.

   (c) The administrator shall not pay any claim by withdrawalsfrom a fiduciary account in which premiums or charges are deposited.Withdrawals from the account shall be made as provided in the written agreementbetween the administrator and the insurer. The written agreement shall address,but not be limited to, the following:

   (1) Remittance to an insurer entitled to remittance;

   (2) Deposit in an account maintained in the name of theinsurer;

   (3) Transfer to and deposit in a claims paying account, withclaims to be paid as provided for in subsection (d) of this section;

   (4) Payment to a group policyholder for remittance to theinsurer entitled to the remittance;

   (5) Payment to the administrator of its commissions, fees orcharges; and

   (6) Remittance of return premium to the person or personsentitled to the return premium.

   (d) All claims paid by the administrator from funds collectedon behalf of or for an insurer shall be paid only on drafts or checks of and asauthorized by the insurer.