Texas General Lines — Property and CasualtyTexas Laws and RegulationsHard
A Texas-licensed producer is found to have violated a provision of the Texas Insurance Code and subsequently fails to comply with a cease and desist order issued by the Commissioner of Insurance. What is the maximum administrative penalty the Commissioner may impose for such a violation?
- A$5,000 per violation
- B$10,000 per violation
- C$1,000 per violation
- D$25,000 per violation
Show answer & explanationAnswer & explanation
Correct answer: D. $25,000 per violation
Under the Texas Insurance Code, if a person violates a cease and desist order, the Commissioner may impose an administrative penalty not to exceed $25,000 for each violation. This is a significant penalty reflecting the seriousness of defying a direct order from the regulatory authority.
Why the other options are wrong
- A. $5,000 is also too low for defying a Commissioner's order.
- B. $10,000 is a common penalty for other violations but not the maximum for violating a cease and desist order.
- C. $1,000 is too low for violating a cease and desist order.
Penalty for Violating Cease & Desist Order (Texas)
The maximum administrative fine imposed by the Commissioner for failing to comply with a cease and desist order.
- Up to $25,000 per violation.
- Reflects the seriousness of defying a direct regulatory order.
- In addition to penalties for the initial violation.
Memory trick: Defy the cease, and pay the twenty-five grand peace.