State RegulationsCO specificDifficulty 3/5
A Colorado producer rebates premium on numerous policies. After a hearing, the Commissioner finds a violation of the unfair-competition provisions. Under C.R.S. § 10-3-1108, the maximum penalty the producer faces is:
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
C.R.S. § 10-3-1108(1)(a) authorizes a penalty of not more than $3,000 per act, capped at $30,000 in the aggregate, for unfair-competition violations found after a hearing. The higher $30,000-per-act and $750,000 annual caps apply only to an insurer that knew or reasonably should have known it was violating part 11.
Why the other options are wrong
- A) The $10,000 per act figure belongs to C.R.S. § 10-3-1109 penalties for violating an existing cease and desist order, not to this initial violation.
- C) The $30,000 per act and $750,000 annual caps apply only to a knowing insurer, not to an individual producer.
- D) The $500 per act figure belongs to C.R.S. § 10-3-1109 and applies to individuals who violate an existing order.
Memory hook
First violation: 3 per act, 30 in all — knowing insurers pay 30 and 750.