State RegulationsCO specificDifficulty 3/5
A Colorado insurance producer who is subject to a cease and desist order issued by the Commissioner continues the conduct prohibited by that order. The producer is an individual, not an insurer. Under C.R.S. § 10-3-1109, what penalty may be imposed?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
C.R.S. § 10-3-1109(1) provides that violating an existing cease and desist order exposes an individual to a penalty of not more than $500 per act and an insurer to not more than $10,000 per act, in addition to suspension or revocation of the license by the Colorado Commissioner of Insurance. The order-violation penalties are separate from the first-violation penalties under C.R.S. § 10-3-1108.
Why the other options are wrong
- B) $3,000 per act with a $30,000 aggregate cap is the C.R.S. § 10-3-1108 penalty for a first unfair-competition violation, not for violating an existing order.
- C) $10,000 per act is the cap for an insurer under C.R.S. § 10-3-1109; an individual is capped at $500 per act.
- D) C.R.S. § 10-3-1109 authorizes a per-act monetary penalty and license sanctions; a warning-only response is not what the statute provides.
Memory hook
Breaking the order: ten grand insurers, five hundred folks.