Michigan: premium trust account rules
What Michigan requires of insurance producers holding premium funds, and what happens when those funds are diverted.
Citation
§§ 500.1207; 500.1239; 500.1244; 500.1409
Source chart last reviewed this jurisdiction: 2/25
What the jurisdiction requires
Agent shall be a fiduciary for all moneys received or held by the agent in the agent’s capacity as an agent. Managing general agent shall hold in a fiduciary capacity all funds that are collected for the account of an insurer.
Penalties for diversion
Failure by an agent to turn money over in a timely manner is prima facie evidence of violation of the agent’s fiduciary capacity. The director may place on probation, suspend, or revoke a producer’s license or may levy a fine or any combination for improperly withholding, misappropriating, or converting any money received during the course of business. In lieu of or in addition to this, a civil fine up to $1,000 for each violation, or if the person knew or reasonably should have known that such person is in violation, then up to $5,000 for each violation with no fines exceeding $50,000.
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 Michigan trust account
Tie your premium trust account out three ways — bank, ledger and what you owe — with Michigan'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.