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CASH AND RESTRICTED CASH
 9 Months Ended
Sep. 30, 2021
CASH AND RESTRICTED CASH  
NOTE 3 - CASH AND RESTRICTED CASH

NOTE 3 – CASH AND RESTRICTED CASH

 

The following table provides a reconciliation of cash and restricted cash reported within the consolidated balance sheets to the amounts shown in the consolidated statements of cash flows:

 

 

 

September 30,

 2021

 

 

December 31, 

2020

 

Cash

 

$15,367,821

 

 

$2,747,737

 

Restricted cash

 

 

422,949

 

 

 

1,210,243

 

Total

 

$15,790,770

 

 

$3,957,980

 

 

Under the CIC, an insurance agent or broker that receives funds as premium or return premium is required to hold such funds in a fiduciary capacity for the benefit of the insurer for whom such premium is received or for the benefit of the policyholder for whom payment of return premium is required. The applicable provisions of the CIC make it unlawful for an agent or broker to divert or appropriate such fiduciary funds for purposes other than the foregoing. The CIC imposes other requirements, which include maintaining premium and return premium funds in a trust account. The trust account must be separate and segregated from any other account and the trust account must be maintained in an amount at least equal to the premiums and return premiums, net of commissions received by the agent or broker. Unifax is an agent and broker subject to the requirements of the CIC relating to fiduciary funds. Unifax transferred unearned premium due Crusader from the separate account maintained as a trust account to its operating account. At various times through September 30, 2021, the fund maintained by Unifax as its trust account did not equal at least the amount of the premiums and unearned premiums required to be maintained as fiduciary funds. As of September 30, 2021, and December 31, 2020, Unifax had a Premium Trust Deficiency due to Crusader of $2,452,835 and $1,595,135, respectively, which eliminates in consolidation. A computer system owned by Unico was transferred to Crusader in January 2022 as discussed in Note 1, which leaves a deficiency as of March 1, 2022, of $390,567.