State RegulationsVA specificDifficulty 1/5
A Virginia licensee commits a violation of the insurance laws and knew, or reasonably should have known, of the violation at the time. What is the maximum civil penalty per act?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Va. Code § 38.2-218 sets the civil penalty for a violation at up to $5,000 per act when the person knew, or reasonably should have known, of the violation. The knowledge standard is the aggravating tier of Virginia's penalty scheme: willful or reckless ignorance costs five times what an innocent misstep does. The Commission applies this per-act figure in enforcement proceedings, with the aggregate exposure capped separately.
Why the other options are wrong
- A) $1,000 is the penalty tier for a person who did not know and had no reason to know of the violation, not the knowing tier.
- B) $10,000 is the aggregate cap per act under Va. Code § 38.2-218, not the knowing-violation maximum.
- C) $25,000 is not a Virginia civil penalty figure at all.
Memory hook
Knew or should have known? Five grand per act.