State RegulationsCO specificDifficulty 1/5
After a hearing under C.R.S. § 10-3-1107, the Colorado Commissioner of Insurance finds that a producer committed an unfair method of competition in violation of part 11. What is the maximum monetary penalty the Commissioner may impose for each act?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under C.R.S. § 10-3-1108(1)(a), after a hearing under C.R.S. § 10-3-1107, a violation of the unfair-competition and deceptive-practices provisions draws a penalty of not more than $3,000 per act, with an aggregate cap of $30,000. The Colorado Commissioner of Insurance must hold the hearing before the penalty attaches, and repeated acts accumulate toward the aggregate cap.
Why the other options are wrong
- A) $500 per act is the cap for an individual who violates an existing cease and desist order under C.R.S. § 10-3-1109, not for a first part 11 violation.
- C) $10,000 per act is the per-act cap for an insurer that violates an existing cease and desist order under C.R.S. § 10-3-1109, a different statute.
- D) $30,000 per act applies to an insurer that knew or reasonably should have known it was violating part 11; a general violation is capped at $3,000 per act.
Memory hook
First-strike unfair practices: $3K per act, $30K total — order-breakers get their own numbers.