Two Virginia licensees each commit one violation of the same insurance provision on the same day. Licensee One knew of the violation when it occurred; Licensee Two had no knowledge and no reason to know of it. What civil penalty exposure does each face?

Why D is correct

Va. Code § 38.2-218 keys the civil penalty to culpability: up to $5,000 per act when the person knew or reasonably should have known of the violation, and up to $1,000 per act otherwise. Licensee One's actual knowledge lands in the higher tier; Licensee Two's genuine ignorance stays in the lower tier. The same-day timing is irrelevant — what separates the two outcomes is the knowledge standard, and both figures remain subject to the $10,000 aggregate cap per act.

Why the other options are wrong

• A) A flat $5,000 for both erases the statute's two-tier structure; only the knowing violator reaches that figure.
• B) The tiers are inverted; knowledge raises the exposure to $5,000 and ignorance keeps it at $1,000 under Va. Code § 38.2-218.
• C) A flat $1,000 for both ignores that Licensee One's knowing violation carries the fivefold higher maximum.

Memory hook

Same violation, different minds: knowledge is the $5,000 switch.