(a) The Insurance Commissioner by order may deny, suspend, revoke, or refuse to issue or renew a license of a licensee or applicant under this subchapter or may restrict or limit the activities of a licensee if the commissioner finds that:
(1) The order is in the public interest; and
(2) A licensee or applicant:
(A) Has filed an application for an initial license or a renewal of a license that as of its effective date or as of any date after the filing of the application, contains an omission or statement that in light of the circumstances under which it was made is false or misleading with respect to any material fact;
(B) Has violated or failed to comply with this subchapter, the insurance laws of this state, any rule adopted by the commissioner, or any order of the commissioner issued under this subchapter;
(C) Has pleaded guilty or nolo contendere to or has been found guilty in a domestic, foreign, or military court of:
(i) A felony;
(ii) An offense involving breach of trust, moral turpitude, money laundering, or fraudulent or dishonest dealing; or
(iii) An offense involving any aspect of the insurance business, the mortgage industry, the securities industry, or any other activity pertaining to financial services;
(D) Is permanently or temporarily enjoined by a court of competent jurisdiction from engaging in or continuing any conduct or practice involving any aspect of the insurance business, the mortgage industry, the securities industry, or any other activity pertaining to financial services;
(E) Is the subject of an order of the commissioner:
(i) Denying, suspending, revoking, restricting, or limiting a license issued under the insurance laws of this state; or
(ii) Directing the licensee or applicant to cease and desist an activity regulated by the commissioner;
(F) Is the subject of an order, including a denial, suspension, or revocation of authority to engage in a regulated activity by another state or federal authority to which the licensee or applicant is, has been, or has sought to be subject, entered in the past five (5) years, including without limitation the insurance industry;
(G) (i) Has failed to pay the proper fees as established by rule of the commissioner.
(ii) The commissioner may enter a denial order against a licensee or applicant under subdivision (a)(2)(G)(i) of this section if the licensee or applicant fails to pay the proper fees as established by rule of the commissioner, but the denial order shall be vacated by the commissioner if the fees are paid;
(H) Has engaged in fraudulent, coercive, or dishonest practices or demonstrated incompetence, untrustworthiness, lack of good personal or business reputation, or financial irresponsibility;
(I) Has forged another's name to an application for insurance or to any document related to an insurance transaction;
(J) Has improperly used notes or any other reference material to complete an examination for an insurance license;
(K) Has failed to provide a written response within thirty (30) days after receipt of a written inquiry from the commissioner or the commissioner's designee concerning transactions unless the commissioner waives the requirement of a timely response in writing;
(L) Has failed to comply with an administrative or court order imposing a child support obligation;
(M) Has failed to pay state income tax or comply with an administrative or court order directing payment of state income tax;
(N) Has refused to be examined or to produce an account, record, or file for examination at the request of the commissioner or the commissioner's designee; or
(O) Has failed to cooperate with the commissioner in an investigation.
(b) The commissioner by order may:
(1) (A) Impose a civil penalty on a licensee for a violation of this subchapter, the insurance laws of this state, a rule under this subchapter, or an order of the commissioner.
(B) The civil penalty shall not exceed ten thousand dollars ($10,000) for each violation under subdivision (b)(1)(A) of this section by a licensee;
(2) Summarily postpone or suspend the license of a licensee pending a final determination of a proceeding under this section; and
(3) Change or vacate an order or extend it until a final determination of a preceeding under this section if a hearing is requested or ordered by the commissioner.
(c) On entering an order under subdivision (b)(1) or subdivision (b)(2) of this section, the commissioner shall:
(1) Promptly notify the licensee by sending notice of the order and the reasons for issuing the order to the address of the licensee on file with the commissioner by first class mail, postage prepaid; and
(2) (A) Schedule a hearing under § 23-61-301 et seq. if a licensee contests the order.
(B) The licensee may contest an order entered under subdivision (b)(1) or subdivision (b)(2) of this section by delivering a written request for a hearing to the commissioner within thirty (30) days after the date on which notice of the order is sent by the commissioner.
(C) (i) The hearing shall be held within thirty (30) days after the commissioner receives a timely written request for a hearing.
(ii) At the request of the licensee, the hearing may be postponed for a reasonable amount of time.
(D) If a licensee does not request a hearing and the commissioner does not order a hearing, the order shall remain in effect until the order is modified or vacated by the commissioner.
(d) The commissioner by order may cancel a license or application if the commissioner finds that a licensee or applicant:
(1) Is no longer in existence;
(2) Has stopped doing business as a licensee;
(3) Is subject to an adjudication of mental incompetence or to the control of a committee, conservator, or guardian; or
(4) Cannot be located after a reasonable search by the commissioner.
(e) (1) In addition to other powers under this subchapter, on finding that an action of a person is in violation of this subchapter, the commissioner may summarily order the person to cease and desist the prohibited action.
(2) On entering the order under subdivision (e)(1) of this section, the commissioner shall:
(A) Promptly notify the person by sending notice of the order and the reasons for issuing the order to the last known address of the person by first class mail, postage prepaid; and
(B) (i) Schedule a hearing under § 23-61-301 et seq. if the person contests the order.
(ii) The person may contest an order entered under subdivision (e)(1) of this section by delivering a written request for a hearing to the commissioner within thirty (30) days after the date on which notice of the order is sent by the commissioner.
(iii) (a) The hearing shall be held within thirty (30) days after the commissioner receives a timely written request for a hearing.
(b) At the request of the person, the hearing may be postponed for a reasonable amount of time.
(iv) If a person does not request a hearing and the commissioner does not order a hearing, the order shall remain in effect until it is modified or vacated by the commissioner.
(3) (A) A person is subject to a civil penalty of up to twenty-five thousand dollars ($25,000) for each violation of the commissioner's cease and desist order committed after entry of the order if:
(i) The person under the cease and desist order fails to appeal the order under § 23-61-307 or if the person appeals and the appeal is denied or dismissed; and
(ii) The person continues to engage in the prohibited action in violation of the commissioner's order.
(B) The commissioner may file an action requesting the civil penalty under subdivision (e)(3)(A) of this section with the Pulaski County Circuit Court or another court of competent jurisdiction.
(C) The penalties of this section apply in addition to, but not instead of, other applicable law to a person for the person's failure to comply with an order of the commissioner.
(f) Unless otherwise provided, an action, hearing, or other proceeding under this subchapter is governed by § 23-61-301 et seq.
(g) If the commissioner has grounds to believe that a licensee has violated this subchapter or that facts exist that would be the basis for an order against a licensee, the commissioner or the commissioner's designee may investigate or examine the business of the licensee and examine the books, accounts, records, and files of a licensee relating to the complaint or matter under investigation.
(h) (1) The commissioner or the commissioner's designee may:
(A) Administer oaths and affirmations;
(B) Issue subpoenas to require the attendance of and to take testimony of a person whose testimony the commissioner considers relevant to the licensee's business; and
(C) Issue subpoenas to require the production of the books, papers, correspondence, memoranda, agreements, or other documents or records that the commissioner considers relevant or material to the inquiry.
(2) (A) When there is contumacy by or refusal to obey a subpoena issued to a licensee or applicant, the Pulaski County Circuit Court, on application by the commissioner, may issue an order requiring the person to appear before the commissioner or the commissioner's designee to produce evidence if so ordered or to give evidence touching the matter under investigation or in question.
(B) Failure to obey the order of the court may be punished by the court as a contempt of court.
(3) The assertion that the testimony or evidence before the commissioner may tend to incriminate or subject a person to a penalty or forfeiture shall not under § 23-61-302 excuse the person from:
(A) Attending and testifying;
(B) Producing any document or record; or
(C) Obeying the subpoena of the commissioner or the commissioner's designee.
(i) From time to time and with or without cause, the commissioner may conduct examinations of the books and records of a licensee or applicant to determine the compliance with this subchapter and the rules adopted under this subchapter.
(j) This section does not prohibit or restrict the informal disposition of a proceeding or allegations that may give rise to a proceeding by stipulation, settlement, consent, or default instead of a formal or informal hearing on the allegations or in place of the sanctions authorized by this section.
(k) (1) If it appears on sufficient grounds or evidence satisfactory to the commissioner that a person has engaged in or is about to engage in an act or practice that violates this subchapter, the commissioner may:
(A) Refer the evidence that is available concerning violations of this subchapter or a rule or order issued under this subchapter to the prosecuting attorney or regulatory agency that with or without the referral may otherwise begin criminal or regulatory proceedings under this subchapter; and
(B) (i) Summarily order the person to stop the act or practice under subsections (b) and (e) of this section and apply to the Pulaski County Circuit Court to enjoin the act or practice or to enforce compliance with this subchapter, rule, or order issued under this subchapter, or both.
(ii) The commissioner, without issuing a cease and desist order, may apply directly to the Pulaski County Circuit Court for injunctive or other relief.
(2) On proper showing, the court shall grant a permanent or temporary injunction, restraining order, or writ of mandamus.
(3) The commissioner may also seek and on proper showing the appropriate court shall grant any other ancillary relief that may be in the public interest, including:
(A) The appointment of a receiver, temporary receiver, or conservator;
(B) A declaratory judgment;
(C) An accounting;
(D) Disgorgement;
(E) Assessment of a fine of not more than ten thousand dollars ($10,000) for each violation; and
(F) Any other relief as may be appropriate in the public interest.
(4) The court shall not require the commissioner to post a bond.
Section: Previous 23-64-602 23-64-603 23-64-604 23-64-605 23-64-606 23-64-607 23-64-608 23-64-609 23-64-610 23-64-611 23-64-612 23-64-613 23-64-614 NextLast modified: November 15, 2016