No. 26976: R590-170. Fiduciary and Trust Account Obligations

DAR File No.: 26976
Filed: 03/01/2004, 04:51
Received by: NL

 

NOTICE OF REVIEW AND STATEMENT OF CONTINUATION

Concise explanation of the particular statutory provisions under which the rule is enacted and how these provisions authorize or require the rule:

Subsection 31A-2-201(3) gives the commissioner rulemaking authority to implement the provisions of Title 31A. Sections 31A-23a-406 and 409 do not have specific rulemaking authority. They both deal with the title business and how the funds received by a title agent should be maintained. This is covered in Section R590-170-5 of the rule which is entitled "Maintaining the Trust Account." Subsection 31A-23a-412(2)(b)(iii)(C) gives the commissioner the authority to require certain records be kept regarding an insurance licensee's business. Section R590-170-7 of the rule specifies accounting records that are to be maintained by the licensee. Subsection 31A-25-305(1) gives the commissioner the authority to adopt rules that will protect the integrity of a fiduciary account. The purpose of this rule is to set minimum standards that shall be followed for fiduciary and trust account obligations.

 

Summary of written comments received during and since the last five-year review of the rule from interested persons supporting or opposing the rule:

The department has not received any written comments regarding this rule in the past five years.

 

Reasoned justification for continuation of the rule, including reasons why the agency disagrees with comments in opposition to the rule, if any:

This rule sets minimum standards to be followed by licensees who hold insurers' or insureds' funds in a fiduciary capacity. It is very important to keep these minimum standards intact by continuing this rule in order to protect the payee's funds that are held in trust by the licensee. Trust violations continue to occur, therefore the department needs the standards set by this rule to regulate the marketplace, and so this rule should be continued.

 

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Insurance
Administration
Room 3110 STATE OFFICE BLDG
450 N MAIN ST
SALT LAKE CITY UT 84114-1201

 

Direct questions regarding this rule to:

Jilene Whitby at the above address, by phone at 801-538-3803, by FAX at 801-538-3829, or by Internet E-mail at [e-mail]

 

Authorized by:

Jilene Whitby, Information Specialist