State RegulationsMI specificDifficulty 1/5
After investigating a Michigan insurer's sales practices, the director concludes the insurer is engaging in unfair methods of competition. What is a cease and desist order?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under the Michigan Insurance Code, including M.C.L. 500.2038, the director may issue a cease and desist order when a person has engaged or is about to engage in conduct that violates the Code. The order directs the person to stop the activity, and violating it exposes the person to monetary penalties and license suspension or revocation.
Why the other options are wrong
- A) A cease and desist order is an administrative order issued by the director, not a criminal warrant from a court.
- C) A cease and desist order has nothing to do with license renewal.
- D) Premium refunds are not the function of the order — it compels cessation of the violative conduct.
Memory hook
Cease and desist = stop it now, from the director, not a court.