General prohibition and penalties

Engaging in unfair methods of competition can result in fines in an amount not greater than $2,500 for each non-willful violation and not greater than $20,000 for each willful violation, but these fines may not exceed a total amount of $10,000 for all non-willful violations or a total amount of $100,000 for all willful violations which arise out of the same action. The fines may be imposed in addition to other applicable penalties.

The offenses of "twisting" or "churning" result in a misdemeanor of the first degree and administrative fines not greater than $5,000 for each non-willful violation or not greater than $75,000 for each willful violation. A willful violation under the law must involve fraudulent conduct. Administrative fines for twisting, churning, or fraudulent signatures may not exceed a total amount of $50,000 for non-willful violations arising out of the same action.

When someone willfully submits fraudulent signatures on an application or policy-related document, the person commits a third-degree felony and may also incur fines not greater than $5,000 for each non-willful violation or not greater than $75,000 for each willful violation.

So be careful here. The fines for twisting and churning and fraudulent signatures are the same, but twisting and churning are misdemeanors while fraudulent signatures are a felony.

Hearings and cease and desist orders

The Department and OIR each have power to examine and investigate the affairs of every person involved in the business of insurance in this state in order to determine whether such person has been or is engaged in any unfair method of competition or in any unfair or deceptive act or practice.

Hearing on misconduct

The Department or OIR may conduct a hearing whenever they have reason to believe that any person has engaged in any unfair method of competition or deceptive act.

Cease and desist order; penalties for violation of act

If a hearing is conducted and it is determined that the person charged has engaged in an unfair or deceptive act, the Department or OIR will also issue an order requiring the violator to cease and desist from engaging in such activities. The Department or OIR also has discretion to order the suspension or revocation of the person's certificate of authority or license.

Violation of a cease and desist order may result in the following:

• A maximum fine of $50,000
• Suspension or revocation of such person's certificate of authority or license