State RegulationsNC specificDifficulty 1/5
After notice and a hearing, the Commissioner finds that an insurer has engaged in an unfair method of competition in the business of insurance. Under Article 63, what may the Commissioner do about the ongoing practice?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under G.S. 58-63-32, when the Commissioner finds after notice and hearing that a person has engaged in an unfair method of competition or an unfair or deceptive act in the business of insurance, the Commissioner may issue a cease-and-desist order requiring the practice to stop. If the order is later willfully violated while in effect, a forfeiture of $1,000 to $5,000 per violation follows under G.S. 58-63-50.
Why the other options are wrong
- A) Enforcement of unfair trade practices is administrative under Article 63, not a grand jury referral; criminal exposure arises only under separate statutes.
- B) No provision of Article 63 automatically revokes a company's articles of incorporation; the tool is the cease-and-desist order under G.S. 58-63-32.
- C) The Commissioner holds primary administrative enforcement authority over unfair methods of competition; policyholder suits are not the exclusive remedy.
Memory hook
Unfair practice proven? The Commissioner orders it stopped — cease and desist.