Final answer:
Agents must have a trust account to collect premiums from clients. A trust account ensures transparency, accountability, and separates the collected premiums from an agent's personal funds.
Step-by-step explanation:
The kind of bank account that an agent must have if he collects premiums from clients is a trust account. A trust account is a financial account that is held by an agent or broker on behalf of their clients. It ensures that the collected premiums are securely held and segregated from the agent's personal funds.
By having a trust account, agents are able to demonstrate transparency and accountability to their clients. It helps to build trust and ensures that the premiums are used for their intended purpose, such as paying insurance claims or investing on behalf of the clients.
For example: If an insurance agent collects premiums for a policy, those funds are deposited into a trust account. When it is time to fulfill a claim or provide payout, the funds are withdrawn from the trust account and transferred to the intended recipient.
Learn more about Bank account for agents collecting premiums