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Agent Fiduciary Responsibilities

It is not inside the business scope of Red's Anytime Bail Bonds to act as legal counsel to any of it's customers; However, we would like to assist our customers in knowing more about the regulations and regulatory bodies governing Bail Bonds in Denver, and Colorado in General. We will be publishing the statutes as published through DORA. You may visit DORA's (Division of Regulatory Agencies) website here.

The following regulation concerns the Fiduciary Responsibility of a Bail Bonds Agent in Denver, or Colorado in General. According to my interpretation of this particular statute, it would suggest that a Bail Bonds Agent in Colorado may not commingle funds for a client with another clients premium. Every Bail Bonds Agent in the State of Colorado must keep accurate records on premiums received.

REGULATION 1-2-1

CONCERNING AGENT FIDUCIARY RESPONSIBILITIES

I. AUTHORITY

This regulation is promulgated under the authority of §§ 10-1-108(8), 10-1-109, 10-2-220 and 10-3-1110,

Colorado Revised Statutes (C.R.S.).

II. PURPOSE

The purpose of this regulation is to clarify the responsibility of insurance agents and brokers 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.

III. RULE:

A. No insurance premium or refund received by an insurance agent, broker 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 agent, broker, 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 must treat all premiums and returned premiums in a fiduciary capacity, including but not limited to the following:

1. Upon receipt the insurance producer must treat all premiums and return premiums as trust funds and segregate them from his own funds, and

2. the insurance producer must keep an accurate record of all fiduciary funds, and

3. the insurance producer must not treat insurance premiums or returned premiums as a personal or business asset, and

4. the insurance producer's financial statement should not reflect fiduciary funds as an asset or as income to the insurance producer, and

5. an insurance producer may not use fiduciary funds as collateral for a personal or business loan, but the insurance producer 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 § 15-1-101e, t seq, C.R.S.

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