State RegulationsNY specificDifficulty 2/5
An insurer knowingly fails to report a for-cause termination of a New York agent to the Superintendent of Financial Services as §2112(d) requires. What is the maximum monetary penalty for each failure?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under N.Y. Ins. Law §2112(i), an insurer that fails to make the required report of a for-cause termination is liable for a civil penalty of up to $5,000 for each violation. The steep penalty reinforces the reporting system that keeps unfit agents from silently moving between insurers.
Why the other options are wrong
- A) $500 per violation is the penalty ceiling for a rebating violation under §2324, a different provision.
- C) $25 is the maximum value of a gift an agent may give an insured under §2324, not a penalty figure here.
- D) $50,000 is a figure from the life insurance limits on minors under §3207 and has no application to termination reports.
Memory hook
Skip the termination report: up to $5,000 per miss.