An insurer willfully violates a cease-and-desist order that was issued by the North Carolina Commissioner of Insurance. What forfeiture may be imposed for this violation?

Why D is correct

Under G.S. 58-63-50, willful violation of a cease-and-desist order exposes the violator to a forfeiture of not less than $1,000 nor more than $5,000 per violation. This tier is separate from the general civil penalty range that applies to ordinary violations of Chapter 58.

Why the other options are wrong

• A) The $100-to-$1,000 range is the general civil penalty for violations of Chapter 58, not the sanction for defying a cease-and-desist order.
• B) The $2,000-to-$10,000 fine is a court-imposed fine on an entity for willful false statements, a different provision entirely.
• C) No $500-to-$5,000 range exists in the North Carolina insurance statutes.

Memory hook

Defy the order, pay 1,000 to 5,000.

Why A is correct

Under G.S. 58-63-50, a person who willfully violates a cease-and-desist order while it is in effect 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 range and from the court fine imposed on entities for false statements.

Why the other options are wrong

• B) The $100-$1,000 range is the general civil penalty under G.S. 58-2-70(d), not the sanction for defying a cease-and-desist order.
• C) The $2,000-$10,000 fine applies to an entity convicted of willful false statements under G.S. 58-2-180.
• D) Seventy-five dollars is the administrative fee that may be charged in lieu of a CE lapse under G.S. 58-33-130(c).

Memory hook

Defy a cease-and-desist and it costs you thousands.

Why B is correct

Under G.S. 58-63-50, a willful violation of a cease-and-desist order subjects the violator to a forfeiture of not less than $1,000 nor more than $5,000 per violation. This tier is distinct from the Commissioner's general civil penalty under G.S. 58-2-70(d), and the tenfold range reflects the added seriousness of defying an order the Commissioner has already issued.

Why the other options are wrong

• A) $100 to $1,000 per violation is the general civil penalty under G.S. 58-2-70(d), which applies to ordinary Chapter 58 violations rather than defied orders.
• C) $2,000 to $10,000 is the court fine on an entity for a willful false statement under G.S. 58-2-180.
• D) The statute prescribes a monetary forfeiture in a fixed range under G.S. 58-63-50; forfeiture of commissions is not the sanction.

Memory hook

Defying a C&D order costs $1k to $5k per violation - ten times the general tier.