(a) A client who appoints an insurance producer as its broker in this state or relative to a subject resident, located, or to be performed in this state shall execute a written contract that specifically sets out the duties, functions, powers, authority, and compensation of the insurance producer, if the broker is compensated by a fee paid by the client or by a combination of a fee paid by a client and a commission paid by an insurer with which coverage has been placed. The written contract shall be kept in the permanent records of the insurance producer and be open to inspection by the director.

(b) The insurance producer may not knowingly accept payment of a premium for coverage until the coverage has been authorized by the insurer. This subsection does not apply to renewal of existing coverage placed by the insurance producer or to a premium deposit for the purchase of insurance. A premium deposit shall be returned to the client if coverage is not obtained within 10 working days.

(c) An insurance producer appointed as a client's broker may only receive compensation if the compensation is a

(1) fee that requires the insurance producer to offset or reimburse the client for the full amount of a commission earned by the insurance producer;

(2) combination of a fee paid by a client and a commission paid by an insurer with which coverage is placed that may offset or reimburse a client for all or part of a commission earned by the insurance producer if the amount of the commission is disclosed to the client; or

(3) commission paid by an insurer with which coverage has been placed.

(d) A contract between a client and an insurance producer may not be assigned in whole or in part by the insurance producer.

(e) An insurance producer appointed as a broker by a client may act as an appointed agent of an admitted insurer and may accept an application, bind coverage, and collect a premium from the client on behalf of the admitted insurer.

(f) [Repealed, § 52 ch 34 SLA 2015.]

(g) Money paid by a client to an insurance producer for insurance premiums shall be held by the insurance producer as a fiduciary.

(h) An insured shall be entitled to coverage or a return premium and the premium shall be considered received by the insurer if the premium payment made to the insurance producer was, at the time made, designated for specific coverage, and the insurer accepted or acknowledged coverage by issuing a policy binder or other evidence of temporary insurance, or the insurance producer received information from the insurer in the normal course of business that the insurance had been granted.

(i) Except as provided under (c) and (e) of this section, this section does not alter the common law of agency as applied to transactions under this title.