An insurer neglects its duty to report a for-cause termination of a New York agent to the Superintendent. Under N.Y. Ins. Law §2112(i), the insurer faces a penalty of up to:

Why C is correct

Under N.Y. Ins. Law §2112(i), an insurer that fails to make the required report of a for-cause termination is subject to a penalty of up to $5,000 per violation. The size of the exposure reflects how important termination reports are to DFS's ability to police problem producers across the market.

Why the other options are wrong

• A) $500 per violation belongs to the penalty scale for rebating violations, not to an insurer's failure to report a termination.
• B) $10 is far below the exposure; the statutory ceiling for failing to report a termination is $5,000 per violation.
• D) $50,000 exceeds the statutory maximum for this failure; the ceiling is $5,000 per violation.

Memory hook

Skip the termination report: up to $5,000 each time.

Why A is correct

Under N.Y. Ins. Law §2112(i), an insurer that fails to make the required report of a producer's termination for cause — or of the producer's fraudulent or dishonest conduct — is liable to the state for up to $5,000 for each violation. The penalty exists to force insurers to surface problem producers instead of quietly letting them move to a competitor.

Why the other options are wrong

• B) $500 is the per-violation penalty for rebating under §2324, not the penalty for failing to report a terminated producer.
• C) Reporting a for-cause termination is the insurer's duty, and §2112(i) attaches a monetary penalty for each failure to report.
• D) §2112(i) provides for a fine; revocation of the insurer's certificate of authority is not the specified consequence.

Memory hook

Stay silent about a bad producer, pay $5,000 per failure.