Texas General Lines — Property and CasualtyTexas Laws and RegulationsMedium
A Texas-licensed producer receives a premium payment from a client. According to Texas regulations, how long does the producer generally have to remit this premium to the insurer or deposit it into a trust account?
- AWithin 10 business days of receipt.
- BWithin 5 business days of receipt.
- CWithin 30 calendar days of receipt.
- DImmediately upon receipt.
Show answer & explanationAnswer & explanation
Correct answer: A. Within 10 business days of receipt.
Texas law generally requires a producer to remit premiums to the insurer or deposit them into a trust account within 10 business days of receipt. This ensures timely handling of client funds and prevents commingling.
Why the other options are wrong
- B. 5 business days is too short; the standard is 10 business days.
- C. 30 calendar days is too long and would violate Texas regulations for premium remittance.
- D. While promptness is good, 'immediately' is not the specific regulatory deadline.
Premium Remittance Deadline (Texas)
The maximum time a producer has to forward premiums to the insurer or place them in a trust account.
- Typically 10 business days from receipt.
- Protects client funds from misuse.
- Prevents commingling of funds.
Memory trick: Ten business days, no more, for premiums to secure the shore.