                                 CODE OF VIRGINIA

REPORTING AND ACCOUNTING FOR PREMIUMS (§ 38.2-1813)

A. All premiums, return premiums, or other funds received in any manner by an
agent or a surplus lines broker shall be held in a fiduciary capacity and shall
be accounted for by such agent or surplus lines broker. The agent or surplus
lines broker shall, in the ordinary course of business, pay the funds to the
insured or his assignee, insurer, insurance premium finance company or agent
entitled to the payment.

B. With the exception of premium funds made payable to insurers or insureds for
remittance and funds referred to in subsection D of this section, on and after
January 1, 1993, all funds referred to in subsection A of this section shall be
maintained in a fiduciary account separate from all other business and personal
funds. Funds deposited into the separate fiduciary account may not be commingled
or combined with other funds except for the purpose of advancing premiums,
establishing reserves for the payment of return premiums, or establishing funds
to maintain a minimum balance or to guarantee the adequacy of the account. The
agent or surplus lines broker shall maintain an accurate record and itemization
of the funds deposited into this account. The commission portion of any premiums
deposited to this separate account may be withdrawn at the discretion of the
agent or surplus lines broker.

C. For the purposes of this section, the separate fiduciary account of a
licensed business entity shall be considered the fiduciary account of an
individual agent or surplus lines broker acting on behalf of the licensed
business entity.

D. This section shall not require any agent who is a duly appointed agent of an
insurer and who has a written contractual relationship with such insurer which
includes provisions regarding remittance of funds to maintain a separate
fiduciary account for the funds. Such funds shall be held separately from any
personal or nonbusiness funds and shall be reasonably ascertainable from the
books of accounts and records of the agent.

HISTORY: 1979, c. 513, § 38.1-327.12; 1986, c. 562; 1992, c. 49; 1993, c. 145;
2001, c. 706.