Massachusetts: premium trust account rules
What Massachusetts requires of insurance producers holding premium funds, and what happens when those funds are diverted.
Citation
§§ 175:162R; 175:176; 175:177I
Source chart last reviewed this jurisdiction: 2/25
What the jurisdiction requires
An agent who receives money as a premium shall be deemed to hold the premium in trust for the company. Managing general agent shall hold in a fiduciary capacity all funds that are collected for the account of an insurer.
Penalties for diversion
If the agent fails to pay the premium over to the company after written demand, failure shall be prima facie evidence that he has used or applied the premium for a purpose other than paying the same over to the company, and he may be found guilty of larceny. The commissioner may place on probation, suspend, revoke, or refuse to renew a license, or levy a civil penalty, if the licensee improperly withheld, misappropriated or converted moneys.
This reference is not legal advice. Citations and summaries are transcribed from the NAIC's Fiduciary Responsibilities—Premiums chart (Spring 2025) and reflect that chart's own review dates, which vary by jurisdiction. Statutes change, and the chart may lag the current code. Confirm the current text of any provision with the jurisdiction's insurance department or your own counsel before relying on it.
Tie out a Massachusetts trust account
Tie your premium trust account out three ways — bank, ledger and what you owe — with Massachusetts's cited rule beside the worksheet. Runs in your browser; nothing is uploaded.
Trust account reconciliation worksheetKeep your trust account provably in balance
Policy Balance Hub tracks premium held in trust against what you owe each carrier, so the reconciliation an examiner asks for already exists.