While directly handling policyholders’ money is a much smaller part of every agency’s daily activities due to marketplace evolution, Ohio and every other state has specific laws as to how agents must handle monies collected for premiums. OIA has done an analysis of the laws in our state and best practices on premium trust accounts. In compiling information for the Ohio Agent’s Guide on Premium Trust Accounts, we cover the basics of a premium trust account, review the rules and regulations and best practice recommendations from industry experts.

A Premium Trust Account allows insurance agencies to efficiently manage the unique requirements regarding collecting insurance premiums. This account handles all incoming clients’ monies and/or deposits, monies to insurance companies via sweep and commissions, and outgoing refunds.

If you are in a Trust State, you must follow the specific laws and regulations within your state on a Premium Trust Account. It may require two separate bank accounts, one for the Premium Trust Account and Operating Account pays the rent and phones, buys office supplies, and disburses payroll, to name a few for the agency so that you refrain from commingle funds.

The state of Ohio is not a Trust State. An agency can use one bank account but must keep the funds separate in its internal accounting system. Accounting can identify the fiduciary funds (incoming clients’ monies and/or deposits, monies to insurance companies via sweep and commissions, and outgoing refunds) at any time. In Ohio, you can voluntarily set up a Premium Trust Account.

We encourage you to review the Ohio Agent’s Guide on Premium Trust Accounts to learn whether your agency is in compliance with Ohio’s regulations and best practices. Please contact OIA’s Resource Center Advisor Jeanie Geisler at Jeanie@ohioinsuranceagents.com for more information on this topic and others affecting your agency operations.