State RegulationsPA specificDifficulty 2/5
The Pennsylvania Insurance Department receives credible evidence that a producer has engaged in unfair methods of competition in the insurance business. Under 40 P.S. § 1171.7, what may the Commissioner do?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
40 P.S. § 1171.7 empowers the Insurance Commissioner, acting through the Pennsylvania Insurance Department, to investigate suspected unfair methods of competition and unfair claims and trade practices, and to bring enforcement proceedings when a violation is found. This investigative and enforcement authority is the mechanism by which the unfair practices statutes acquire practical force. The Commissioner acts administratively and through lawful proceedings, not by private penal decrees.
Why the other options are wrong
- A) A private civil judgment by policyholders is not a prerequisite; the Commissioner may act on the department's own credible evidence under 40 P.S. § 1171.7.
- B) The Commissioner enforces the law against licensees; the department does not commandeer insurers to dissolve private agency contracts.
- C) Incarceration is a judicial outcome in the courts; the Commissioner's authority under 40 P.S. § 1171.7 is investigative and administrative enforcement, not imprisonment.
Memory hook
See it, investigate it, enforce it: the Commissioner polices unfair competition.