State RegulationsGA specificDifficulty 1/5
Following notice and a hearing, the Georgia Insurance Commissioner finds that an insurer willfully violated the insurance laws by misrepresenting policy benefits in its sales materials. What civil penalty may the Commissioner impose for this violation?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under O.C.G.A. § 33-6-9, after notice and a hearing the Commissioner may impose a penalty of up to $10,000 for each act or violation, and may also suspend or revoke licenses. The per-act framing means repeated misrepresentations multiply the company's exposure. The 50%/$5,000 formula belongs to the separate bad-faith refusal-to-pay remedy, not to the Commissioner's administrative penalties.
Why the other options are wrong
- A) $1,000 is not the administrative penalty ceiling; O.C.G.A. § 33-6-9 authorizes up to $10,000 per act or violation.
- B) O.C.G.A. § 33-6-9 caps each act or violation at $10,000, not $5,000.
- D) The 50%/$5,000 formula is the bad-faith refusal-to-pay penalty under O.C.G.A. § 33-4-6, not the Commissioner's cease-and-desist penalty under O.C.G.A. § 33-6-9.
Memory hook
Cease and desist costs ten grand a swing — per act, not per case.