Question

When may a property broker-agent, casualty broker-agent or surplus lines agent offset funds due an insured for return premiums?

1. when it is from the same insurance company
2. when it is for the spouse of the insured for unpaid premiums on any other policy
3. when it is from the same insured for unpaid premiums on the same or any other policy
4. when the agent has noticed that the client is late paying premiums, the funds can be held to pay future premiums

Answer 1

An insurance broker-agent may offset funds due for return premiums if it is from the same insurance company or owed by the same insured across any policy. Offsetting for premiums due by others or for future premiums is not allowed.

Step-by-step explanation:

In the context of insurance practices, a property broker-agent, casualty broker-agent, or surplus lines agent may offset funds due an insured for return premiums under specific circumstances. Primarily, offsetting can occur:

1. When it is from the same insurance company.
2. When it is from the same insured for unpaid premiums on the same or any other policy.

Offsetting is generally not allowed for funds due from different insurers, nor for premiums owed by another person, such as a spouse, unless they are legally responsible for the debt. Furthermore, it is not permissible to hold funds to cover future premiums if the client is late in paying.

It's important to note that these practices adhere to regulations that prevent potential financial harm to the client and ensure proper fiscal management within insurance companies.