State RegulationsCO specificDifficulty 1/5
The Colorado Division of Insurance identifies an entity transacting insurance in the state without authorization. Which enforcement tool is expressly available to the Division?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
C.R.S. § 10-3-906 authorizes the Commissioner of Insurance to issue cease-and-desist orders against entities transacting insurance without authorization. The order compels the entity to stop the unlawful activity, and continued violation can trigger further enforcement. The Division acts through administrative orders like this, not through summary imprisonment or retroactive licensing.
Why the other options are wrong
- A) The Division is an administrative agency; imprisonment is a judicial sanction and is not imposed summarily by the Division.
- B) Retroactive authorization upon payment is not an enforcement tool; unauthorized transacting is prohibited and cannot be cured by back payment.
- D) The Division's enforcement targets the unauthorized activity itself; it does not void policies on a wholesale basis.
Memory hook
Unauthorized seller? The Commissioner's first word is 'cease' — and 'desist' follows.