State RegulationsMI specificDifficulty 1/5
An insurer repeatedly violates the timely claims payment provisions of the Michigan Insurance Code. What civil fine may be imposed per violation?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
M.C.L. 500.2006(13) imposes a civil fine of $1,000 per violation of the claims payment provisions, with an aggregate cap of $10,000. This claims-specific fine is separate from the licensing fines in M.C.L. 500.1244 and from the $20,000 trade-practice cease and desist penalty in M.C.L. 500.2040.
Why the other options are wrong
- A) $500 is the ordinary licensing fine under M.C.L. 500.1244(1)(a), not the claims fine.
- C) $2,500 is the enhanced licensing fine for knowing conduct under M.C.L. 500.1244(1)(a).
- D) $20,000 is the trade-practice cease and desist penalty under M.C.L. 500.2040(1)(a).
Memory hook
Slow claims cost $1,000 each, $10,000 total.