Premium fund trust accounts (PFTAs) are fiduciary accounts (similar in that respect to IOLTA accounts for lawyers). Insurance producers (also known as brokers) must place the insurance premiums they collect from clients in PFTAs (unless they send the premiums directly to the insurance broker). The Illinois Insurance Code regulations require any entity that has to be licensed under Title XXXI of the Insurance Code to hold deposited insurance premium payments in PFTAs. 50 Ill. Adm. Code 3113.40(c).  

The regulations impose several requirements on “licensees,” meaning the brokers that establish the accounts. As a result, most of these requirements do not apply to your institution. However, a few requirements may impact how your institution handles these accounts: Every PFTA must be designated as a “Premium Fund Trust Account” in bank records and on the face of the checks of that account. 50 Ill. Adm. Code 3113.40(b). If a customer wants to place account funds in interest bearing or income producing assets (including checking and savings accounts), it must obtain the insurance written authorization. 50 Ill. Adm. Code 3113.40(k). The regulations include a sample form for that written authorization. Also, it may be a best practice to obtain the licenses from the insurance brokers (also known as producers) when opening PFTAs.

Whether you want to allow the owner of a PFTA to authorize multiple signers for the account is a business decision for your institution.