Why Would an Agency Retain Trust Account Service?

[mhutch69]

CA. historically required a separate Trust Account from all other Agency expenses.

I assume that has not changed.

If you audited agencies in CA., I would be more than 1 out of 3 is out of Trust. Trust means every dollar of UNearned Commissions remain in the Trust Account per Chris Packer, CA. DOI.

But, most agencies pay half to the producer on day one.

[patriot]

It amazes me that insurance agents don't understand their FIDUCIARY DUTY. If you ask an escrow agent, an attorney, a real estate broker or a property manager about FIDUCIARY DUTY or TRUST ACCOUNT MANAGEMENT they will know exactly what is required of them. The problem is that most agencies use an agency management system such as Applied or AMS which is setup to use general ledger accounting. You cannot prove your trust account solvency using general ledger accounting. I have even seen agencies managing their trust accouting with QuickBooks or Peachtree. WRONG WRONG WRONG. Try to prove your trust account solvency to the DEPARTMENT OF INSURANCE with one of the above accounting systems. At best they will take your license and fine you, at worst, they charge you with theft, terminate your license and you do a little jail time.

WAKE UP INDEPENDENT AGENTS........if you don't get it join Farmers, Allstate or State Farm.