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Question

Difficulty: EasyLicense Discipline and Penalties

A licensed life insurance producer is convicted of a felony in a state court. Which of the following describes the most likely administrative action the State Insurance Commissioner will take regarding the producer's insurance license?

  1. Suspend or revoke the license after providing proper notice and an opportunity for a hearing.Answer
  2. B
    Immediately sentence the producer to a state prison facility for insurance fraud.
  3. C
    Reissue the producer's license as a temporary license for the duration of the felony probation.
  4. D
    Require the producer to pay a disciplinary penalty fee directly to the State Guaranty Association.

Answer

Suspend or revoke the license after providing proper notice and an opportunity for a hearing.
The correct answer accurately identifies that a felony conviction is a valid statutory ground for the Commissioner to suspend or revoke a producer's license, provided that administrative due process (notice and a hearing) is followed.

Step-by-Step Solution

1
Identify the violation in the scenario.
The producer has been convicted of a felony.
Understanding the nature of the misconduct determines what regulatory actions are triggered.
2
Determine the legal authority of the Commissioner regarding the violation.
The Commissioner has the authority to issue administrative penalties such as license suspension, revocation, or monetary fines.
The Commissioner enforces the insurance code but cannot impose criminal sentences.
3
Identify the correct procedural requirements for administrative penalties.
Before suspending or revoking a license, the Commissioner must typically provide the licensee with written notice and an opportunity for a hearing.
Licensees are entitled to administrative due process.

Key Concept

Grounds for License Discipline and Commissioner Authority
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Topics

License Discipline and Penalties

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