31A-23a-409 - Trust obligation for monies collected. - Utah Statutes

31A-23a-409. Trust obligation for monies collected.
(1) (a) Subject to Subsection (7), a licensee is a trustee for monies received or collectedfor forwarding to insurers or to insureds.
(b) (i) Except as provided in Subsection (1)(b)(ii), a licensee may not commingle trustfunds with:
(A) the licensee's own monies; or
(B) monies held in any other capacity.
(ii) This Subsection (1)(b) does not apply to:
(A) amounts necessary to pay bank charges; and
(B) monies paid by insureds and belonging in part to the licensee as a fee or commission.
(c) Except as provided under Subsection (4), a licensee owes to insureds and insurers thefiduciary duties of a trustee with respect to money to be forwarded to insurers or insureds throughthe licensee.
(d) (i) Unless monies are sent to the appropriate payee by the close of the next businessday after their receipt, the licensee shall deposit them in an account authorized under Subsection(2).
(ii) Monies deposited under this Subsection (1)(d) shall remain in an account authorizedunder Subsection (2) until sent to the appropriate payee.
(2) Monies required to be deposited under Subsection (1) shall be deposited:
(a) in a federally insured trust account in a depository institution, as defined in Section7-1-103, which:
(i) has an office in this state, if the licensee depositing the monies is a resident licensee;
(ii) has federal deposit insurance; and
(iii) is authorized by its primary regulator to engage in the trust business, as defined bySection 7-5-1, in this state; or
(b) in some other account, approved by the commissioner by rule or order, providingsafety comparable to federally insured trust accounts.
(3) It is not a violation of Subsection (2)(a) if the amounts in the accounts exceed theamount of the federal insurance on the accounts.
(4) A trust account into which monies are deposited may be interest bearing. The interestaccrued on the account may be paid to the licensee, so long as the licensee otherwise complieswith this section and with the contract with the insurer.
(5) A depository institution or other organization holding trust funds under this sectionmay not offset or impound trust account funds against debts and obligations incurred by thelicensee.
(6) A licensee who, not being lawfully entitled to do so, diverts or appropriates anyportion of the monies held under Subsection (1) to the licensee's own use, is guilty of theft underTitle 76, Chapter 6, Part 4, Theft. Section 76-6-412 applies in determining the classification ofthe offense. Sanctions under Section 31A-2-308 also apply.
(7) A nonresident licensee:
(a) shall comply with Subsection (1)(a) by complying with the trust account requirementsof the nonresident licensee's home state; and
(b) is not required to comply with the other provisions of this section.

Amended by Chapter 349, 2009 General Session