(1) All charges and premiums collected by a third-party administrator on behalf of or for an insurer or insurers and the return of premiums received from that insurer or insurers shall be held by the third-party administrator in a fiduciary capacity. Such funds shall be immediately remitted to the person or persons entitled to them or shall be deposited promptly in a fiduciary account established and maintained by the third-party administrator in a federally insured or state-insured financial institution. The written agreement between the third-party administrator and the insurer shall provide for the third-party administrator to periodically render an accounting to the insurer detailing all transactions performed by the third-party administrator pertaining to the insurance business underwritten by the insurer.
(2) If charges and premiums deposited in a fiduciary account have been collected on behalf of or for one or more insurers, the third-party administrator shall keep records clearly recording the deposits in and withdrawals from the fiduciary account on behalf of each insurer. The third-party administrator shall keep copies of all the records pertaining to such deposits and withdrawals and, upon request of an insurer, shall furnish the insurer with copies of the records.
(3) The third-party administrator shall not pay any claim by withdrawals from a fiduciary account in which charges and premiums are deposited. Withdrawals from such account shall be made as provided in the written agreement between the third-party administrator and the insurer. The written agreement shall address, but not be limited to, the following: (a) Remittance to an insurer entitled to remittance; (b) Deposit in an account maintained in the name of the insurer; (c) Transfer to and deposit in a claims-paying account, with claims to be paid as provided for in subsection
(4) of this section; (d) Payment to a group policyholder or group contract holder for remittance to the insurer entitled to such remittance; (e) Payment to the third-party administrator of its commissions, fees, or charges; and (f) Remittance of return of premium to the person or persons entitled to such return of premium.
(4) All claims paid by the third-party administrator from funds collected on behalf of or for an insurer shall be paid only on drafts or checks of and as authorized by the insurer.