State RegulationsCO specificDifficulty 2/5
A Colorado home office learns that its marketing unit has been making deceptive statements about policy benefits, and the evidence shows the insurer knew — or reasonably should have known — it was violating part 11. After a hearing, under C.R.S. § 10-3-1108 what is the maximum penalty for the insurer?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
C.R.S. § 10-3-1108(1)(a) creates a separate, higher penalty tier for an insurer that knew, or reasonably should have known, it was violating part 11: not more than $30,000 per act, capped at $750,000 annually. The Commissioner may also order suspension or revocation where knowledge is shown, so the financial and licensing exposure both escalate for a knowing insurer.
Why the other options are wrong
- A) The $3,000 per act / $30,000 aggregate tier under C.R.S. § 10-3-1108(1)(a) applies to ordinary violators, not to a knowing insurer.
- C) $10,000 per act belongs to C.R.S. § 10-3-1109(1) penalties for violating an existing cease and desist order, and that statute fixes the amount rather than leaving it uncapped.
- D) $500 per act is the individual penalty for violating an existing order under C.R.S. § 10-3-1109(1); it never applies to a knowing insurer's part 11 violation.
Memory hook
Knowing insurers pay ten times more: 30 per act, 750 a year.