A Colorado Division of Insurance hearing establishes that an insurer knew, or reasonably should have known, that it was violating part 11 of article 3 of title 10. Under C.R.S. § 10-3-1108(1)(a), what penalty framework applies to this insurer?

Why D is correct

C.R.S. § 10-3-1108(1)(a) elevates the penalty when the violator is an insurer that knew, or reasonably should have known, it was violating part 11: not more than $30,000 per act, subject to an annual cap of $750,000. The knowledge finding is the statutory trigger that moves the insurer out of the ordinary $3,000-per-act framework, and the Commissioner may also order suspension or revocation where knowledge is shown.

Why the other options are wrong

• A) The $3,000-per-act and $30,000-aggregate framework applies to violations without a knowledge finding, so it is too low here.
• B) The $500-per-act figure is the penalty for an individual who violates an existing cease and desist order under C.R.S. § 10-3-1109.
• C) C.R.S. § 10-3-1108(1)(a) fixes numeric per-act and annual caps; penalties are not free-floating discretionary fines.

Memory hook

Insurer knew? Think big: $30,000 an act, $750,000 a year.