State RegulationsCO specificDifficulty 1/5
Following a hearing, a Colorado insurer is found to have engaged in an unfair method of competition in violation of part 11 of article 3 of title 10. Under C.R.S. § 10-3-1108(1)(a), what is the maximum monetary penalty where the violation is NOT shown to have been knowing?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
C.R.S. § 10-3-1108(1)(a) authorizes, after a hearing under C.R.S. § 10-3-1107, a penalty of not more than $3,000 per act for an unfair-competition or deceptive-act violation, with an aggregate cap of $30,000. The elevated $30,000-per-act and $750,000-annual figures apply only when the violator is an insurer that knew or reasonably should have known it was violating part 11.
Why the other options are wrong
- A) The $10,000 figure belongs to penalties for violating an existing cease and desist order under C.R.S. § 10-3-1109, not to an initial part 11 violation.
- C) The $500-per-act figure is the individual penalty for violating an existing order under C.R.S. § 10-3-1109 and does not apply here.
- D) The $30,000-per-act and $750,000-annual caps apply only to a knowing insurer under C.R.S. § 10-3-1108(1)(a), which the stem excludes.
Memory hook
Non-knowing part 11 violation: $3,000 per act, $30,000 all in.