DEPARTMENT OF REGULATORY AGENCIES
Division of Insurance
3 ccr 702-1
ADMINISTRATIVE PROCEDURES
REPEALED AND REPROMULGATED REGULATION 1-2-1
CONCERNING PRODUCER FIDUCIARY RESPONSIBILITIES
Section 1	Authority
Section 2	Scope and Purpose
Section 3	Applicability
Section 4	Rule
Section 5	Enforcement 
Section 6	Severability
Section 7	Effective Date
Section 8	History
Section 1	AUTHORITY
This regulation is promulgated under the authority of §§ 10-1-109, 10-2-104, 10-2-704, and 10-3-1110 Colorado Revised Statutes (C.R.S.)
Section 2	SCOPE and PURPOSE
The purpose of this regulation is to clarify the responsibility of insurance producers to treat each insurance policy and premiums handled thereon as a separate account of their insureds unless specific authorization has been obtained from insureds to commingle multiple obligations and funds.
Section 3	APPLICABILITY
This regulation shall apply to all insurance producers and agencies over whom the Division of Insurance has authority.
Section 4	RULE
A.	No insurance premium or refund received by an insurance producer or agency by reason of the application for, issuance or termination of any particular policy may be credited to any other obligation owed by the insured to such producer, agency or other insurer unless specific written authorization has been obtained from the insured to so credit, or a blanket authorization has been obtained from the insured to handle all policies and obligations from one account.
B.	Upon receipt, the insurance producer or agency shall treat all premiums and returned premiums in a fiduciary capacity, including but not limited to the following:
1.	Upon receipt the insurance producer or agency must treat all premiums and return premiums as trust funds and segregate them from his own funds; 
2.	The insurance producer or agency must keep an accurate record of all fiduciary funds;
3.	The insurance producer or agency must not treat insurance premiums or returned premiums as a personal or business asset;
4.	The insurance producer’s or agency’s financial statement should not reflect fiduciary funds as an asset or as income to the insurance producer or agency;
5.	An insurance producer or agency may not use fiduciary funds as collateral for a personal or business loan, but the insurance producer or agency may receive interest on such funds and use as a compensation balance with the financial institution; and
6.	Any deposit of such premium and returned premium funds into a bank or savings account must be into a separate insurance trust account until actually remitted to the insurer or person entitled thereto. Such deposits will be subject to the uniform fiduciary's law as delineated in § 15-1-101, et seq, C.R.S.
Section 5	ENFORCEMENT 
Noncompliance with this regulation, whether defined or reasonably implied, may result, after proper notice and hearing, in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance or other laws which include the imposition of fines, issuance of cease and desist orders and/or suspensions or revocation of license.
Section 6	SEVERABILITY
If any of the provisions of this regulation or the application thereof to any person or circumstances is for any reason held invalid or unenforceable, this regulation shall be construed as if not containing such provisions and the validity, legality and enforceability of the remaining provisions of this regulation shall not be affected or impaired in any way.
Section 7	EFFECTIVE DATE
This regulation is effective November 1, 2008
Section 8	HISTORY

Originally promulgated in 1978 as 78-12
Amended Regulation in 1980
Re-codified as Regulation 1-2-1 in 1992
Repealed and repromulgated November 1, 2008