What must an insurance agent avoid when handling premiums?

An insurance agent must avoid commingling premiums with personal funds because doing so violates the fiduciary responsibilities they have to their clients and the insurance company. Premiums collected from clients are considered trust funds, which must be held separately from the agent's personal finances. This separation ensures that the funds are readily available for payment to the insurer when due and prevents the potential misuse of clients' funds.

Maintaining a distinct boundary between an agent's private finances and the premiums they collect mitigates the risk of financial mismanagement or accusations of fraud. Proper handling of premiums is essential not only for regulatory compliance but also for maintaining trust with clients and the insurer. Thus, by ensuring that they do not mix personal and client funds, agents fulfill their ethical and legal obligations.