An established health insurance company is found to be utilizing unapproved policy forms that violate state minimum benefit standards. When addressing this regulatory violation, which of the following enforcement mechanisms are within the statutory powers of the Director of Insurance? (Select all that apply)
- Issue an order compelling the company to cease and desist from issuing the unapproved forms.Cevap
- Suspend the company's Certificate of Authority following a proper administrative hearing.Cevap
- CDraft and pass a new legislative act increasing the minimum benefit standards for health policies.
- DSentence the company's compliance officer to prison for committing regulatory fraud.
Cevap
The Director of Insurance has the authority to issue a cease and desist order and to suspend the company's Certificate of Authority after a hearing.
The correct answers reflect the valid administrative enforcement tools available to the Director of Insurance. Upon discovering a violation, the Director can immediately halt the non-compliant activity with a cease and desist order and penalize the insurer by suspending its Certificate of Authority, provided that administrative due process (such as a hearing) is followed.
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The Department of Insurance has administrative authority to enforce existing laws through mechanisms like cease and desist orders, fines, and license suspensions, but lacks the power to create laws or impose criminal sentences.