State RegulationsMI specificDifficulty 2/5
An insurer violates a cease and desist order that was issued for unfair trade practices under the Michigan Insurance Code. What is the maximum monetary penalty per violation?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
M.C.L. 500.2040(1)(a) sets the penalty for violating a trade-practices cease and desist order at up to $20,000 per violation, an amount the legislature raised from $10,000 in 2019. M.C.L. 500.2040(3) also bars the order from including fines for acts committed before the order was issued, so the penalty attaches only to post-order violations.
Why the other options are wrong
- A) $500 is the per-violation fine for ordinary licensing violations under M.C.L. 500.1244(1)(a).
- B) $10,000 is the superseded pre-2019 amount and the current licensing-chapter figure under M.C.L. 500.1244(3).
- D) $50,000 is the aggregate cap for knowing licensing-chapter cease and desist violations, not the per-violation trade-practice penalty.
Memory hook
Trade-practice C&D violation: $20,000 each — doubled in 2019.