(a)  All insurance charges or premiums collected by an administrator on behalf of or for an insurer or insurers, and the return of premiums received from that insurer or insurers, shall be held by the administrator in a fiduciary capacity. The funds shall be immediately remitted to the person or persons entitled to them or shall be deposited promptly in a fiduciary account established and maintained by the administrator in a federally or state insured financial institution. The written agreement between the administrator and the insurer shall provide for the administrator to periodically render an accounting to the insurer detailing all transactions performed by the administrator pertaining to the business underwritten by the insurer.

Terms Used In Rhode Island General Laws 27-20.7-8

  • Administrator: means a person who directly or indirectly solicits or effects coverage of, underwrites, collects charges or premiums from, or adjusts or settles claims on residents of this state, or residents of another state from offices in this state, in connection with life or health insurance coverage or annuities, except any of the following:

    (i)  An employer on behalf of its employees or the employees of one or more subsidiaries or affiliated corporations of the employer;

    (ii)  A union on behalf of its members;

    (iii)  An insurer which is authorized to transact insurance in this state with respect to a policy lawfully issued and delivered in and pursuant to the laws of this state or another state;

    (iv)  A producer licensed to sell life or health insurance in this state, whose activities are limited exclusively to the sale of insurance;

    (v)  A creditor on behalf of its debtors with respect to insurance covering a debt between the creditor and its debtors;

    (vi)  A trust and its trustees, agents and employees acting pursuant to the trust established in conformity with 29 U. See Rhode Island General Laws 27-20.7-2

  • Fiduciary: A trustee, executor, or administrator.
  • Insurer: includes all persons, firms or corporations offering and/or insuring health services on a prepaid basis, including, but not limited to, policies of accident and sickness insurance as defined by chapter 18 of this title, nonprofit hospital or medical service plans as defined by chapters 19 and 20 of this title, or any other entity whose primary function is to provide diagnostic, therapeutic or preventive services to a defined population on the basis of a periodic premium. See Rhode Island General Laws 27-20.7-2
  • person: may be construed to extend to and include co-partnerships and bodies corporate and politic. See Rhode Island General Laws 43-3-6

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

(c)  The administrator shall not pay any claim by withdrawals from a fiduciary account in which premiums or charges are deposited. Withdrawals from the account shall be made as provided in the written agreement between 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 the insurer;

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

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

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

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

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

History of Section.
P.L. 2001, ch. 83, § 1; P.L. 2001, ch. 242, § 1.