State RegulationsCO specificDifficulty 3/5
A Colorado insurer continues a marketing practice after the Commissioner has served it with a cease and desist order prohibiting that practice. Under C.R.S. § 10-3-1109(1), what penalty may be imposed for violating the existing order?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
C.R.S. § 10-3-1109(1) penalizes violating an existing cease and desist order at not more than $10,000 per act for an insurer and not more than $500 per act for an individual, and the Commissioner may additionally suspend or revoke the license. This order-violation penalty is separate from the part 11 penalty schedule of C.R.S. § 10-3-1108, and the two must never be blended.
Why the other options are wrong
- A) $3,000 per act is the ordinary penalty under C.R.S. § 10-3-1108(1)(a) for the initial part 11 violation, not for defying a cease and desist order.
- B) $30,000 per act is the knowing-insurer tier under C.R.S. § 10-3-1108(1)(a); the order-violation statute sets its own $10,000 figure.
- D) This reverses the amounts in C.R.S. § 10-3-1109(1): $10,000 per act applies to an insurer and $500 per act to an individual.
Memory hook
Defy an order: 10 grand for the company, 500 for the person.