§ 3690. Sanctions
(a) Any insurer failing, without just cause, to file any registration statement as required
in this subchapter shall be required, after notice and hearing, to pay a penalty of
not more than $1,000.00 for each day’s delay, to be recovered by the Commissioner
of Financial Regulation, and the penalty so recovered shall be paid into the General
Revenue Fund of this State. The maximum penalty under this section is $150,000.00.
The Commissioner may reduce the penalty if the insurer demonstrates to the Commissioner
that the imposition of the penalty would constitute a financial hardship to the insurer.
(b) Every director or officer of an insurance holding company system who knowingly violates,
participates in, or assents to, or who knowingly shall permit any of the officers
or agents of the insurer to engage in transactions or make investments that have not
been properly reported or submitted pursuant to subsection 3684(a), 3685(c), or 3685(f) of this subchapter, or which violate this subchapter, shall pay, in their
individual capacity, an administrative penalty of not more than $5,000.00 per violation,
after notice and hearing before the Commissioner. In determining the amount of the
penalty, the Commissioner shall take into account the appropriateness of the penalty
with respect to the gravity of the violation, the history of previous violations,
and such other matters as justice may require.
(c) Whenever it appears to the Commissioner that any insurer subject to this subchapter
or any director, officer, employee, or agent thereof has engaged in any transaction
or entered into a contract that is subject to section 3685 of this subchapter and
that would not have been approved had such approval been requested, the Commissioner
may order the insurer to cease and desist immediately any further activity under that
transaction or contract. After notice and hearing, the Commissioner may also order
the insurer to void any such contracts and restore the status quo if such action is
in the best interest of the policyholders, creditors, or the public.
(d) Any person who willfully violates any section of this subchapter shall be fined not
more than $25,000.00 or imprisoned not more than three years, or both.
(e) Any insurer, officer, director, or employee of an insurance holding company system
who willfully subscribes to, makes, or causes to be made any false statement, report,
or filing under this subchapter shall be imprisoned for not more than three years
or fined not more than $25,000.00, or both. Any fines imposed shall be paid by the
officer, director, or employee in his or her individual capacity.
(f) Whenever it appears to the Commissioner that any person has committed a violation
of section 3681 of this chapter that prevents the full understanding of the enterprise
risk to the insurer by affiliates or by the insurance holding company system, the
violation may serve as an independent basis for disapproving dividends or distributions
and for placing the insurer under an order of supervision under section 7041 of this title. (Added 1971, No. 72, § 2; amended 1991, No. 249 (Adj. Sess.), § 17; 1995, No. 180 (Adj. Sess.), § 38(a); 2011, No. 78 (Adj. Sess.), § 2, eff. April 2, 2012; 2013, No. 29, § 34, eff. May 13, 2013.)