The director issues a cease-and-desist order against an insurer for repeatedly misrepresenting policy benefits. The insurer continues the same practice after the order takes effect. Under the Michigan Insurance Code's trade-practice enforcement provisions, what is the maximum monetary penalty for each violation of the order?

Why D is correct

M.C.L. 500.2040(1)(a) of the Michigan Insurance Code provides that violating a cease-and-desist order issued for an unfair trade practice is punishable by a monetary penalty of up to $20,000 per violation (raised from $10,000 by 2019 PA 21) or by suspension or revocation of the violator's license. Continuing a misrepresentation practice after an order therefore carries this elevated per-violation exposure in addition to the underlying trade-practice liability.

Why the other options are wrong

• A) $1,000 per violation is the civil fine for violating the claims-payment section of the Code under M.C.L. 500.2006(13), not the penalty for violating a trade-practice cease-and-desist order.
• B) $10,000 per violation was the pre-2019 penalty amount under M.C.L. 500.2040 and is also the current Chapter 12 cease-and-desist figure under M.C.L. 500.1244(3); it is superseded for trade-practice order violations.
• C) $25,000 is the aggregate cap on the Chapter 12 producer-level fine schedule under M.C.L. 500.1244(1)(a), not the per-violation trade-practice order penalty.

Memory hook

Post-order trade-practice defiance costs up to $20,000 a pop — double the old $10,000 figure.