State RegulationsCO specificDifficulty 2/5
After a hearing conducted under C.R.S. § 10-3-1107, the Commissioner finds that a Colorado producer committed an unfair method of competition in violation of part 11 of title 10, article 3. Under C.R.S. § 10-3-1108, what is the maximum monetary penalty for this violation?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under C.R.S. § 10-3-1108(1)(a), after a hearing under C.R.S. § 10-3-1107 (held under the State Administrative Procedure Act), a violation of the unfair-competition and deceptive-practices provisions draws a monetary penalty of not more than $3,000 per act, capped at $30,000 in the aggregate. The higher per-act and annual figures apply only to a knowing insurer, so a producer is exposed to the $3,000/$30,000 tier.
Why the other options are wrong
- B) $10,000 per act is the penalty for violating an existing cease and desist order under C.R.S. § 10-3-1109(1), not for the underlying part 11 violation penalized by § 10-3-1108.
- C) $500 per act is the individual penalty for violating an existing cease and desist order under C.R.S. § 10-3-1109(1); it is not the penalty for the initial violation.
- D) $30,000 per act capped at $750,000 annually is the penalty tier for an insurer that knew or reasonably should have known it was violating part 11, not the ordinary tier.
Memory hook
Fresh violations cost 3 a act and 30 in all; breaking an order costs 10 and 500.