§ 36-1465. Compensation - Fiduciary duties.

A.  Money, commissions, brokerages, or allowances of anything of value, including service fees, for or on account of solicitation for or negotiation or effecting of policies or contracts for life or accident and health insurance may be paid by:

1.  a company duly licensed to do business in this state only to its duly licensed agent or agency or to a duly licensed life or accident and health insurance broker; or

2.  an agent or agency only to a duly licensed agent or agency for the same company acting under his direct supervision, or to a duly licensed life or accident and health insurance broker; or

3.  a life or accident and health insurance broker only to a duly licensed life or accident and health insurance broker.

B.  Nothing in this section shall be construed as prohibiting the payment of renewal commissions on lawfully written life insurance.

C.  Nothing in this section shall be construed as prohibiting the payment of compensation to licensed agents or agencies for other services rendered not involving the solicitation for or negotiation or effecting of policies or contracts for insurance.

D.  No life or accident and health insurance broker shall have any right to compensation, other than commissions deductible from premiums on life or accident and health insurance policies or contracts for life or accident and health insurance, from any insured or prospective insured for or on account of the negotiation or procurement of or other services in connection with any policy or contract for life or accident and health insurance made or negotiated in this state, unless said right to compensation is based upon a written memorandum signed by the party to be charged, and specifying clearly the amount or extent of said compensation. Nothing herein contained shall affect the right of any said life or accident and health insurance broker to recover from the insured the amount of any premium or premiums for insurance effected by or through said life or accident and health insurance broker.

E.  Every life or accident and health insurance broker acting as such in this state shall be responsible in a fiduciary capacity for all funds received or collected as a life or accident and health insurance broker and shall not mingle any such funds, without the express consent of his principal, with the broker's own funds or with funds held by the life or accident and health insurance broker in any other capacity.  Nothing in this section shall be construed to require any broker to maintain a separate bank deposit if the funds of each principal are clearly ascertainable from the books of account and records of the life or accident and health insurance broker.

Added by Laws 1983, c. 165, § 5, eff. Nov. 1, 1983.