Contract: A legal written agreement that becomes binding when signed.
Fiduciary: A trustee, executor, or administrator.
Home state: means :
(a)
a state or territory of the United States or the District of Columbia in which an insurance producer, limited lines producer, consultant, managing general agent, or reinsurance intermediary licensee:
(i)
maintains the licensee's principal:
(A)
place of residence; or
(B)
place of business; and
(ii)
is licensed to act as a resident licensee; or
(b)
if the resident state, territory, or the District of Columbia described in Subsection (3)(a) does not license for the line of authority sought, a state, territory, or the District of Columbia:
(i)
in which the licensee is licensed;
(ii)
in which the licensee is in good standing; and
(iii)
that the licensee has designated as the licensee's designated home state. See Utah Code 31A-23a-102
a risk distributing arrangement providing for compensation or replacement for damages or loss through the provision of a service or a benefit in kind;
(ii)
a contract of guaranty or suretyship entered into by the guarantor or surety as a business and not as merely incidental to a business transaction; and
(iii)
a plan in which the risk does not rest upon the person who makes an arrangement, but with a class of persons who have agreed to share the risk. See Utah Code 31A-1-301
Insured: means a person to whom or for whose benefit an insurer makes a promise in an insurance policy and includes:
Insurer: is a s defined in Section 31A-1-301, except that the following persons or similar persons are not insurers for purposes of 7:
(a)
a risk retention group as defined in:
(i)
the Superfund Amendments and Reauthorization Act of 1986, Pub. See Utah Code 31A-23a-102
Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
producer: means a person licensed or required to be licensed under the laws of this state to sell, solicit, or negotiate insurance. See Utah Code 31A-1-301
State: when applied to the different parts of the United States, includes a state, district, or territory of the United States. See Utah Code 68-3-12.5
Title insurance: means the insuring, guaranteeing, or indemnifying of an owner of real or personal property or the holder of liens or encumbrances on that property, or others interested in the property against loss or damage suffered by reason of liens or encumbrances upon, defects in, or the unmarketability of the title to the property, or invalidity or unenforceability of any liens or encumbrances on the property. See Utah Code 31A-1-301
Trust account: A general term that covers all types of accounts in a trust department, such as estates, guardianships, and agencies. Source: OCC
Trustee: means "director" when referring to the board of directors of a corporation. See Utah Code 31A-1-301
Trustee: A person or institution holding and administering property in trust.
(a)
Subject to Subsection (7), a licensee is a trustee for money that is paid to, received by, or collected by a licensee for forwarding to insurers or to insureds.
(b)
(i)
Except as provided in Subsection (1)(b)(ii), a licensee may not commingle trust funds with:
(A)
the licensee’s own money; or
(B)
money held in any other capacity.
(ii)
This Subsection (1)(b) does not apply to:
(A)
amounts necessary to pay bank charges; and
(B)
money 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 the fiduciary duties of a trustee with respect to money to be forwarded to insurers or insureds through the licensee.
(d)
(i)
Unless money is sent to the appropriate payee by the close of the next business day after their receipt, the licensee shall deposit them in an account authorized under Subsection (2).
(ii)
Money deposited under this Subsection (1)(d) shall remain in an account authorized under Subsection (2) until sent to the appropriate payee.
(2)
Money required to be deposited under Subsection (1) shall be deposited:
(a)
into a federally insuredtrust account in a depository institution, as defined in Section 7-1-103, which:
(i)
has a branch in this state, if the individual title insuranceproducer or agencytitle insurance producer depositing the money 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 by Section 7-5-1, in this state; or
(b)
into some other account, that:
(i)
the commissioner approves by rule or order; and
(ii)
provides safety comparable to an account described in Subsection (2)(a).
(3)
It is not a violation of Subsection (2)(a) if the amounts in the accounts exceed the amount of the federal insurance on the accounts.
(4)
A trust account into which money is deposited may be interest bearing. The interest accrued on the account may be paid to the licensee, so long as the licensee otherwise complies with this section and with the contract with the insurer.
(5)
A depository institution or other organization holding trust funds under this section may not offset or impound trust account funds against debts and obligations incurred by the licensee.
(6)
A licensee who, not being lawfully entitled to do so, diverts or appropriates any portion of the money held under Subsection (1) to the licensee’s own use, is guilty of theft under 4. 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 requirements of the nonresident licensee’s home state; and
(b)
is not required to comply with the other provisions of this section.
Amended by Chapter 111, 2023 General Session Amended by Chapter 194, 2023 General Session
