Insurance regulation in a nutshell

Section V.5.Criminal Sanctions

Criminal sanctions may be imposed as part of an enforcement action. Under New York law, every violation of any provision of the New York Insurance Law is a misdemeanor, unless it constitutes a felony.⁸⁰

Section V.6.Receivership

Among the many grounds for placing a domestic insurer in rehabilitation or liquidation (see Section VIII.4.) is the following:
Within the previous five (5) years the insurer has willfully and continuously violated its charter or articles of incorporation, its bylaws, any insurance law of this state, or any valid order of the commissioner”⁸¹
Thus, a state insurance regulator may seek to place an insurer that continuously and willfully violates its domestic state insurance law into receivership.

Section V.7.Restitution

Some states may impose restitution as a sanction for an enforcement action. Under Florida law, an insurer that discovers a non-willful violation of the insurance law is required to correct the violation and, if restitution is due, make restitution to all affected persons.⁸² The failure of an insurer to make restitution when due as required constitutes a willful violation of Florida law.⁸³
Similarly, under Maryland law, instead of or in addition to suspending or revoking an insurer’s license, the Commissioner of Insurance may require the holder to make restitution to any person who has suffered financial injury because of the violation of the insurance law.⁸⁴

ARTICLE VI

Regulation of Intermediaries and Service Persons

Section VI.1.In General

State insurance laws regulate many different kinds of insurance intermediaries and service persons. The purpose of licensing is to: (i) in some cases, establish qualifications for licensing, (ii) require that fees be paid as a condition of licensing, and (iii) provide for the suspension or revocation of the license of a person who violates applicable law.
This Article identifies the kinds of intermediaries and service persons that are licensed under state insurance laws.