A hearing before the Colorado Division of Insurance establishes that an insurer KNEW it was violating Colorado's unfair-competition provisions when it issued deceptive advertising across the state. Under C.R.S. § 10-3-1108, what is the maximum penalty?

Why B is correct

C.R.S. § 10-3-1108(1)(a) imposes the enhanced penalty tier 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, capped at $750,000 annually. The Commissioner may additionally order suspension or revocation and payment of any contractual claim the violation caused to go unpaid. This knowledge-based escalation is the reason a Colorado insurer cannot treat a first deception finding as a minor cost of business; the per-act exposure multiplies by 10 once knowledge is shown.

Why the other options are wrong

• A) That is the standard penalty tier under C.R.S. § 10-3-1108 for conduct without knowledge, which the stem expressly rules out.
• C) $10,000 per act is the C.R.S. § 10-3-1109 penalty for violating an existing cease and desist order, not the knowing-insurer penalty.
• D) Monetary penalties are expressly available against a knowing insurer, and license action is an additional remedy rather than the only one.

Memory hook

Knew or should have known? The caps jump to $30,000 per act and $750,000 a year.