Wyo. Code R. 044-0002-46
Effective Date: 04/30/1992 to 12/31/1996
Rule Type: Superceded Rules & Regulations
Reference Number: 044.0002.46.04301992
Effective April 30, 1992
(Section) 1 Authority This regulation governing premium trust accounts is promulgated pursuant to W.S. 26-2-109, W.S. 26-2-110,
W.S. 26-9-129 and W.S. 26-9-130 of the Wyoming Insurance Code and
W.S. 16-3-101, et seq. of the Wyoming Administrative Procedure Act.
(Section) 2 Purpose The purpose of this regulation is to provide
clarification of the statutory requirement of W.S. 26-9-130(a) to
account for and pay premiums and return premiums to the person entitled thereto 'in the regular course of business.' The regulation is also intended to set forth procedures required in maintaining a premium trust account in order to comply with the statutory prohibition regarding commingling of trust funds with funds of the licensee. By setting forth the procedures for the maintenance and use of premium trust accounts by agents, brokers, or solicitors the statutory requirements should be better defined and the interests of the public protected.
(Section) 3 Definitions
(a) 'Direct bill basis' means where the insured receives a premium notice directly from the insurer and pays premium directly to the insurer.
(b) 'Licensee' for the purposes of this regulation means an agent, a broker or a solicitor as defined in the Wyoming Insurance Code.
(c) 'Premium' has the same meaning as set forth in W.S. 26-1-102(a)(xxii).
(d) 'Recognized Financial Institution' means an institution that is organized or licensed under the laws of the United States or any state and is insured by an instrumentality of the United States government.
(e) 'Trust Account' or 'Premium Trust Account' means a bank account used for the purpose of holding monies in a fiduciary capacity. 'Trust Account' or 'Premium Trust Account' does not include accounts into which premiums are deposited if the account is owned by the insurer entitled to the premiums.
(Section) 4 Separate Account
(a) The trust account required pursuant to W.S. 26-9-130(b) shall be separate and distinct from the licensee's operating and/or personal accounts. The trust account shall have a separate account number, a separate check register and different checks. The checks, check register and bank records for the account shall be clearly identified with the wording 'Premium Trust Account.'
(b) The trust account shall be maintained in a recognized financial institution located within Wyoming.
(a) The licensee may open the trust account by making an initial deposit into the trust account with the licensee's own funds if such deposit is required by the financial institution to open the account or to avoid bank charges or fees for maintaining the account. The deposit of the licensee's own funds shall be equal to the amount required by the financial institution to open the account or to avoid bank charges or fees.
(b) Upon the first deposit of any premiums or return premiums to the account, the licensee shall immediately withdraw all of the funds described in subsection (a) or shall maintain all of those funds within the account and separately account for those funds in all books and records of the licensee.
(c) No bank charges or bank fees shall be paid from funds deposited in the trust account. Such charges or fees shall be paid from the licensee's own funds. If the recognized financial institution deducts any bank charges or fees from the trust account balance, the licensee shall reimburse the trust account in the amount of those fees within ten business days following receipt of written notice of the deduction.
(a) All premium and return premiums received by a licensee are trust funds received in a fiduciary capacity and the licensee shall either remit such funds to the appropriate payee, credit such funds to the account of the appropriate payee or deposit such funds in the licensee's trust account by the close of the fifth business day following their receipt. Subsequent transmittals of premiums and return premiums shall be made in accordance with the remainder of this section.
(b) All premiums received, less commissions if authorized, shall be remitted to the insurer or its agent entitled thereto on or before the contractual due date or within forty-five days after receipt thereof if there is no contractual due date.
(c) All return premiums shall be paid to the insured or credited to the insured's account by the close of the fifth business day following receipt of the funds from the insurer or its agent. If the return premium is reflected as a credit on the licensee's billing statement from the insurer or its agent, the licensee shall pay the return premium or credit the insured's account by the close of the fifth business day subsequent to payment of the statement or the due date of the statement, whichever is sooner. If the return premium is to be credited to the insured's account, the credit must be shown and applied to the next billing
statement sent to the insured. If the credit results in a credit balance on the insured's account, the credit shall be returned by the close of the fifth business day following the billing statement unless the licensee receives written authorization from the insured to retain the credit balance and other developed credit balances for a period of no more than twelve months from the date of authorization. Such authorization must contain a notification to the insured that he has the right to withdraw the authorization in writing and that the return premium will be refunded within fifteen days of the authorization withdrawal. A copy of the authorization shall be maintained in the licensee's file and a copy shall be given to the insured at the time that the authorization is obtained. If authorization is obtained, the licensee shall send monthly written notification to the insured which clearly reflects a credit owed to the insured.
(Section) 7 Commissions Any fees or commissions earned by the licensee and deposited in the trust account with any premium shall be withdrawn and paid into an operating or business account on or before the contractual due date of the premiums to the insurer or within forty-five days after receipt thereof if there is no contractual due date.
(Section) 8 Interest No licensee shall establish an interest bearing trust account and retain the interest or income thereon except in accordance with the following:
(a) The licensee shall obtain prior written authorization from the insurer on whose behalf the funds are being held, and the insured with respect to return premiums.
(b) Any interest or income earned on the funds in the trust account shall be transferred from the trust account no later than ten business days following receipt of written notice of the interest or income earned.
(Section) 9 Exception A trust account need not be maintained if a licensee does not receive funds in a fiduciary capacity, i.e., where the insured pays premium on a direct bill basis or where the licensee simply forwards the insured's premium check or money order to the insurer and such check or money order is made payable to the insurer. A trust account need not be maintained if the licensee deposits within five business days from receipt, all premium received from an insured directly into an account owned by the insurer entitled to the premiums.
(Section) 10 Record Keeping All licensees who maintain and use a trust account shall maintain, at the principal place of business, accurate accounting records kept on a consistent basis which will facilitate an audit trail. The records shall show, at a minimum, the following:
(a) Any written authorization from the insured to retain credit balances, interest, or income or funds placed in the premium trust account or from an insurer to retain interest or income on funds placed in the premium trust account;
(b) The existence and the source of any fees and commissions in the trust account;
(c) That a generally accepted form of reconciliation has been completed on a monthly basis showing transfers into and out of the account.
(d) Any other information necessary to establish compliance with
these rules and regulations as specified by bulletins issued by the Insurance Commissioner.
(Section) 11 Separability If any provision of this regulation or
the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of the regulation and the application of such provision to other persons or circumstances shall not be affected thereby.
(Section) 12 Effective Date
This regulation becomes effective immediately upon filing with the Secretary of State.