Key Takeaways
- Georgia producers have fiduciary duties to handle client funds properly
- Premiums collected must be held in trust and remitted promptly to insurers
- Producers must maintain accurate records and provide required disclosures
- Commingling of personal and client funds is prohibited
- Continuing education includes mandatory ethics training
Producer Conduct and Fiduciary Duties
Georgia insurance producers have legal and ethical obligations to their clients and the public. Understanding these duties is essential for professional conduct and exam success.
Fiduciary Duties
A fiduciary is someone who acts in another's best interest. Insurance producers owe fiduciary duties regarding client funds:
Key Duties
| Duty | Description |
|---|---|
| Trust | Hold premiums in trust for insurer |
| Prompt Remittance | Forward premiums to insurer promptly |
| Separate Accounts | Keep client funds separate from personal funds |
| Accurate Records | Maintain detailed records of all transactions |
| Good Faith | Act honestly in all dealings |
Agent vs. Broker
| Producer Type | Primary Duty |
|---|---|
| Agent | Represents insurance company |
| Broker | Represents consumer/insured |
Exam Tip: While agents represent insurers and brokers represent consumers, both have ethical obligations to handle funds properly and treat all parties fairly.
Handling of Funds
Producers must handle premiums and client funds according to strict rules:
Premium Collection
| Requirement | Rule |
|---|---|
| Deposit | Promptly to insurer or trust account |
| Commingling | Cannot mix with personal funds |
| Trust Account | Required for holding premiums |
| Records | Must maintain detailed records |
| Remittance | Forward to insurer per agreement |
Trust Account Requirements
- Separate from personal accounts
- Clearly designated as trust account
- Detailed records of all transactions
- Regular reconciliation
- Available for Commissioner examination
Consequences of Mishandling
- License suspension or revocation
- Required restitution
- Civil liability
- Potential criminal charges (theft, embezzlement)
Disclosure Requirements
Georgia producers must disclose:
Required Disclosures
- License status and lines of authority
- Company representation
- Material conflicts of interest
- Compensation basis (if asked)
- All material terms and conditions of products
When Disclosure Required
| Situation | Disclosure |
|---|---|
| Before Sale | Licensed status, company representation |
| At Sale | Product terms, limitations, exclusions |
| Upon Request | Compensation information |
| Replacement | Comparison of policies |
Record Keeping
Georgia requires producers to maintain records:
Required Records
| Record Type | Retention Period |
|---|---|
| Applications | 5 years |
| Policy documents | 5 years |
| Client correspondence | 5 years |
| Premium records | 5 years |
| Replacement forms | 5 years |
| Transaction records | 5 years |
Access to Records
- Commissioner can examine records during investigations
- Must provide records upon request
- Failure to maintain records is a violation
- Records must be legible and organized
Ethics in Practice
Client Communication
Best practices for ethical client communication:
- Be Truthful - Never exaggerate or mislead
- Be Clear - Use language client understands
- Be Complete - Disclose all material information
- Be Responsive - Address questions promptly
- Be Professional - Maintain appropriate boundaries
Continuing Education
Georgia requires ethics training as part of CE:
- 3 hours of ethics every renewal period
- Part of 24-hour total requirement
- Covers industry standards and regulations
- Includes case studies and examples
What is prohibited regarding handling of client premium funds in Georgia?
How long must Georgia insurance producers retain client records?