§ 58-56-31. Premium collection and payment of claims.
§58‑56‑31. Premium collection and payment of claims.
(a) All insurancecharges or premiums collected by a TPA on behalf of or for an insurer, and thereturn of premiums received from that insurer, shall be held by the TPA in afiduciary capacity. These funds shall be immediately remitted to the personentitled to them or shall be deposited promptly in a fiduciary accountestablished and maintained by the TPA in a federally or State insured financialinstitution. The agreement between the TPA and the insurer shall require theTPA to periodically render an accounting to the insurer detailing alltransactions performed by the TPA pertaining to the business underwritten bythe insurer.
(b) If charges orpremiums deposited in a fiduciary account have been collected on behalf of orfor one or more insurers, the TPA shall keep records clearly recording thedeposits in and withdrawals from the account on behalf of each insurer. TheTPA shall keep copies of all the records and, upon request of an insurer, shallfurnish the insurer with copies of the records pertaining to the deposits andwithdrawals.
(c) The TPA shall notpay any claim by withdrawals from a fiduciary account in which premiums orcharges are deposited. Withdrawals from this account shall be made only asprovided in the agreement between the TPA and the insurer. The agreement shalladdress, but not be limited to, the following:
(1) Remittance to aninsurer entitled to remittance.
(2) Deposit in anaccount maintained in the name of the insurer.
(3) Transfer to anddeposit in a claims‑paying account, with claims to be paid as provided insubsection (d) of this section.
(4) Payment to a grouppolicyholder for remittance to the insurer entitled to the remittance.
(5) Payment to the TPAof its commissions, fees, or charges.
(6) Remittance of areturn premium to the person entitled to the return premium.
(d) All claims paid bythe TPA from funds collected on behalf of or for an insurer shall be paid onlyon drafts or checks of and as authorized by the insurer. (1991,c. 627, s. 1.)