The Commissioner issues a cease-and-desist order against an insurer, and the insurer willfully continues the prohibited practice. What forfeiture does each violation of the order carry?

Why A is correct

Under G.S. 58-63-50, a person who willfully violates a cease-and-desist order issued by the Commissioner forfeits not less than $1,000 nor more than $5,000 for each violation. This range is specific to defying a cease-and-desist order and is separate from the general civil penalty scheme the Commissioner applies to ordinary Code violations.

Why the other options are wrong

• B) $100 to $1,000 per violation is the general civil penalty range under G.S. 58-2-70(d), which applies to ordinary Code violations, not to willful defiance of a cease-and-desist order under G.S. 58-63-50.
• C) $2,000 to $10,000 is the fine a court imposes on an entity for willful false statements under G.S. 58-2-180, not the cease-and-desist forfeiture under G.S. 58-63-50.
• D) North Carolina law imposes no flat $50,000 forfeiture; G.S. 58-63-50 sets the $1,000 to $5,000 per-violation range.

Memory hook

Defy a C&D: one to five grand per violation.

Why A is correct

G.S. 58-63-50 provides that a person who willfully violates a cease-and-desist order forfeits not less than $1,000 nor more than $5,000 for each violation. This tier is distinct from the Commissioner's general civil penalty of $100 to $1,000 under G.S. 58-2-70, which applies to ordinary violations of Chapter 58 — defying a cease-and-desist order carries the higher range.

Why the other options are wrong

• B) $100 to $1,000 is the general civil penalty under G.S. 58-2-70 for ordinary violations, not the sanction for defying a cease-and-desist order.
• C) $2,000 to $10,000 is the court-imposed fine on an entity for willfully false statements under G.S. 58-2-180; it does not apply to cease-and-desist violations.
• D) No North Carolina penalty tier reaches $10,000 to $50,000 for an insurance law violation; the top of the cease-and-desist range is $5,000.

Memory hook

Ignore a cease-and-desist and pay one to five grand per violation.