Starr Indemnity & Liability Company has accused a Florida brokerage and its principals of failing to remit more than $180,000 in premium funds meant to be held in trust.
Starr Indemnity & Liability Company filed a lawsuit in the United States District Court for the Southern District of Florida on Oct. 8, naming Quantum Insurance Group, Inc. and its principals, Victor Quijano and Janet Quijano, as defendants. The complaint alleges Quantum, a licensed insurance broker, failed to remit premium payments collected on Starr’s behalf, violating both statutory and contractual fiduciary duties.
Quantum was appointed as a producer for Starr Indemnity under a Producer/Carrier Agreement. The agreement authorized Quantum to solicit, receive, and transmit applications for certain Starr Indemnity insurance products in Florida and to issue Certificates of Insurance. It required Quantum to collect premium payments, hold them in a fiduciary capacity, and remit them to Starr Indemnity within thirty days of billing. The complaint states that all premiums collected were to be treated as trust funds, and Quantum and its principals were fiduciaries under both the agreement and Florida insurance law.
The dispute centers on three invoices for insurance coverage arranged through Quantum, totaling $110,114.78, $5,207.00, and $81,139.28, respectively. Starr Indemnity alleges Quantum received payment for these invoices but failed to remit the funds as required. The complaint further claims Quantum either deposited the premium funds into a premium trust account or, on information and belief, into its general operating account, contrary to contractual and statutory obligations.
Florida Statute §626.561, cited in the complaint, requires that all premiums, return premiums, or other funds belonging to insurers received by an agent or agency are trust funds received in a fiduciary capacity and prohibits their misappropriation. Starr Indemnity alleges Quantum, Victor Quijano, and Janet Quijano breached fiduciary duties by failing to hold, segregate, and remit the premiums, instead acting in their own self-interest. The complaint also asserts that both Victor and Janet Quijano, as officers and directors of Quantum, had fiduciary duties to Starr Indemnity and participated in or oversaw the alleged conduct.
The legal action brings counts against the defendants for breach of fiduciary duty under Florida law and contract, conversion, breach of contract, money had and received, unjust enrichment, and theft. Starr Indemnity seeks compensatory damages, treble damages, attorney’s fees, and other relief as provided by law. As this is a complaint, all allegations remain unproven, and the case has not yet been adjudicated.
No specific insurance policy clauses are cited in the complaint, but the case turns on the Producer/Carrier Agreement’s requirements for premium handling and trust fund management, as well as statutory obligations under Florida insurance law.
This case underscores the importance of trust fund management and fiduciary responsibility in the insurance industry. For insurance professionals, the allegations highlight the risks and regulatory scrutiny that come with handling client funds and the consequences that can result from breaches of trust.
