What is wrongful withholding or misappropriation of premiums by a producer called?

The term used to describe the wrongful withholding or misappropriation of premiums by a producer is commingling of funds. Commingling occurs when a producer mixes client premiums with their personal or business funds, which is a serious violation of ethical and legal obligations in the insurance industry. This behavior can lead to misappropriation, where the producer uses the funds for personal gain rather than for their intended purpose—payment of insurance premiums.

Understanding the implications of commingling is critical for insurance producers, as it not only jeopardizes the trust between the producer and clients but also can lead to regulatory penalties, including loss of licensure. This distinction emphasizes the need for producers to maintain separate accounts for client funds and their own to uphold fiduciary responsibilities.

The other options, while they may represent unethical behaviors in general, do not specifically refer to the act of mixing client premiums with personal funds as effectively as commingling does.