31A-25-305 - Fiduciary requirements for third party administrators.
31A-25-305. Fiduciary requirements for third party administrators.
(1) All money received by a third party administrator in that capacity shall be held by thethird party administrator as a fiduciary. The money shall be paid in a timely manner to thepersons entitled to it. While any money is being held by the third party administrator, it shall bedeposited promptly in one or more fiduciary bank accounts maintained by the third partyadministrator pursuant to any rules the commissioner adopts to protect the integrity of the funds.
(2) If premiums deposited in a fiduciary account have been collected on behalf of morethan one insurer or more than one class of insureds, the third party administrator shall keeprecords clearly recording the deposits and withdrawals from the account by or for the benefit ofpersons beneficially entitled to them, if there are not separate accounts for that purpose. The thirdparty administrator shall furnish the insurer or policyholder with copies of the records pertainingto deposits and withdrawals on behalf of the insurer or policyholder.
(3) The third party administrator may not pay any claim by withdrawals from a fiduciaryaccount. Withdrawals from the account may be made as provided in the written agreementbetween the third party administrator and the insurer, or between the third party administrator andthe policyholders, as required under this chapter, for the following:
(a) remittance to an insurer entitled to the remittance;
(b) deposit in an account maintained in the name of the insurer;
(c) transfer to and deposit in a claims-paying account, with claims to be paid as providedby Section 31A-25-306;
(d) payment to a group policyholder for remittance to the insurer entitled to theremittance;
(e) payment to the third party administrator of its commission, fees, or charges; or
(f) remittance of return premiums to the persons entitled to them.
Enacted by Chapter 242, 1985 General Session