The Commissioner of Insurance finds that a producer violated a provision of Chapter 58 and orders a civil penalty instead of suspending the producer's license. For each violation, what penalty range may the Commissioner order?

Why B is correct

Under G.S. 58-2-70(d), the Commissioner may order payment of a civil penalty of not less than $100 nor more than $1,000 for each violation of Chapter 58, in addition to or instead of suspending or revoking a license. Each day a continuing violation persists is treated as a separate violation, so penalties can accumulate daily, and restitution may be pursued through Wake County Superior Court.

Why the other options are wrong

• A) $1,000 to $5,000 is the forfeiture range for willfully violating a cease-and-desist order under G.S. 58-63-50, a different trigger.
• C) $2,000 to $10,000 is the fine a court may impose on an entity for willfully false statements under G.S. 58-2-180, not the Commissioner's per-violation civil penalty.
• D) $50 to $500 matches no penalty tier in the North Carolina Insurance Code and understates the statutory range.

Memory hook

General civil penalty: one hundred to a grand, per violation, per day.

Why D is correct

Under G.S. 58-2-70(d), the Commissioner may order a civil penalty of not less than $100 nor more than $1,000 for each violation of Chapter 58, in addition to or in lieu of suspension or revocation of the license. Under G.S. 58-2-70(c), each day a continuing violation persists is treated as a separate violation, so penalties can accumulate for ongoing misconduct.

Why the other options are wrong

• A) $1,000 to $5,000 is the forfeiture range for willfully violating a cease-and-desist order under G.S. 58-63-50, not the general civil penalty range.
• B) $2,000 to $10,000 is the fine a court imposes on an entity for willful false statements under G.S. 58-2-180, not the Commissioner's general civil penalty.
• C) $5,000 to $25,000 is not a penalty range found in North Carolina insurance law at all.

Memory hook

General civil penalty: one hundred to one grand per hit.

Why C is correct

Under G.S. 58-2-70(d), the Commissioner may order a civil penalty of not less than $100 nor more than $1,000 per violation of Chapter 58, in addition to or instead of suspension or revocation. Each day of a continuing violation is a separate violation, so ongoing noncompliance multiplies the financial exposure.

Why the other options are wrong

• A) The $1,000-$5,000 range is the forfeiture for willfully violating a cease-and-desist order under G.S. 58-63-50, not the general civil penalty.
• B) The $2,000-$10,000 fine is what a court may impose on an entity for willful false statements under G.S. 58-2-180.
• D) G.S. 58-2-70(d) expressly authorizes a civil penalty instead of, or in addition to, license suspension or revocation.

Memory hook

General violation: one hundred to one thousand dollars — per violation, per day.

Why A is correct

Under G.S. 58-2-70(d), the Commissioner may order a civil penalty of not less than $100 nor more than $1,000 per violation of Chapter 58, in addition to or instead of suspension or revocation. Each day of a continuing violation is treated as a separate violation, and restitution may also be pursued through Wake County Superior Court.

Why the other options are wrong

• B) The $1,000 to $5,000 range is the forfeiture for willfully violating a cease-and-desist order under G.S. 58-63-50, not the general civil penalty.
• C) The $2,000 to $10,000 fine is what a court imposes on an entity for a willful false statement under G.S. 58-2-180.
• D) No provision of G.S. 58-2-70 authorizes a blended range reaching $10,000 for an ordinary civil penalty.

Memory hook

General civil penalty: one hundred to one grand per violation - each day counts as a new one.