State RegulationsMA specificDifficulty 1/5
Under M.G.L. c. 175, § 223D, what is the maximum civil penalty for committing a fraudulent life settlement act or another violation of the state's life settlement provisions?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
M.G.L. c. 175, § 223D authorizes a civil penalty of up to $10,000 per violation for a fraudulent life settlement act or any other violation of the life settlement provisions. For a licensee, the consequences compound: a fraudulent life settlement act constitutes insurance fraud, and the licensee's license is revoked for at least 1 year. The penalty structure signals that the settlement marketplace — broker licensing under M.G.L. c. 175, § 213, disclosure under § 220, fraud prohibitions under § 223A — is enforced with real monetary and license consequences.
Why the other options are wrong
- A) $250,000 is the guaranty association limit for an annuity's present value, not the life settlement civil penalty under M.G.L. c. 175, § 223D.
- C) $100,000 is a guaranty association coverage figure, not the life settlement civil penalty under M.G.L. c. 175, § 223D.
- D) $300,000 is the guaranty association's life death benefit limit, unrelated to life settlement penalties.
Memory hook
Ten grand per violation — and fraud costs the licensee the license for at least a year.