Taking receipt of premiums and holding them for the insurance company is an example of

Taking receipt of premiums and holding them for the insurance company is an example of

A. Commingling

B. Misappropriation

C. Theft

D. Fiduciary responsibility

Answer. D. Fiduciary responsibility

Making sure the premiums reach the insurance company is a part of the core service and therefore considered fiduciary duty. The fiduciary is a person who has been committed to take charge of certain assets or money under management by another group, say, insurance companies or public bodies. A fiduciary status is usually validated when agents collect insurance premiums from customers and keep them in temporary escrow before remitting them to the insurance company. This is called a fiduciary responsibility, which is the concept of underscoring honesty, integrity and displaying unreserved loyalty to the insured (insurer) as main priority and not one’s personal interest. A trustee or long-term care director who misuses or mismanages this money would be in violation of their fiduciary duty.