State RegulationsNY specificDifficulty 1/5
A New York insurer learns that a terminated agent had been forging client signatures, but it never files the required termination report with the Superintendent. Under N.Y. Ins. Law §2112(i), what is the maximum penalty for each failure to report?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under N.Y. Ins. Law §2112(i), an insurer that fails to make the required report of a producer's termination for cause — or of the producer's fraudulent or dishonest conduct — is liable to the state for up to $5,000 for each violation. The penalty exists to force insurers to surface problem producers instead of quietly letting them move to a competitor.
Why the other options are wrong
- B) $500 is the per-violation penalty for rebating under §2324, not the penalty for failing to report a terminated producer.
- C) Reporting a for-cause termination is the insurer's duty, and §2112(i) attaches a monetary penalty for each failure to report.
- D) §2112(i) provides for a fine; revocation of the insurer's certificate of authority is not the specified consequence.
Memory hook
Stay silent about a bad producer, pay $5,000 per failure.