2023 District of Columbia Code › Title 31 - Insurance and Securities › Chapter 7 - Holding Companies › Subchapter I - Holding Company System › § 31–710. Sanctions

§ 31–710. Sanctions.
(a)(1) 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 an administrative penalty of $1,000 for each day’s delay, to be recovered by the Mayor and the penalty so recovered shall be paid into the District of Columbia Treasury. The maximum penalty under this section shall be $100,000.
(2) The Mayor may reduce the penalty if the insurer demonstrates to the Mayor that the imposition of the penalty would constitute a financial hardship to the insurer.
(3) Adjudication of infractions under this section shall be pursuant to Chapter 18 of Title 2.
(b)(1) Every director or officer of an insurance holding company system who knowingly violates, participates in, or assents to, or who knowingly permits any of the officers or agents of the insurer to engage in transactions or make investments which have not been properly reported or submitted pursuant to § 31-705(a) or § 31-706(a)(2) or (b), or which violate this subchapter, shall pay, in their individual capacity, a civil administrative penalty of not more than $1,000 per violation, after notice and hearing before the Mayor.
(2) In determining the amount of the civil administrative penalty, the Mayor shall take into account the appropriateness of the forfeiture with respect to the gravity of the violation, the history of previous violations, and such other matters as justice may require.
(3) Adjudication of any infraction of this subsection shall be pursuant to Chapter 18 of Title 2.
(c)(1) Whenever it appears to the Mayor that any insurer subject to this subchapter, or any director, officer, employee, or agent, has engaged in any transaction or entered into a contract which is subject to § 31-706 and which would not have been approved had approval been requested, the Mayor may order the insurer to immediately cease and desist any further activity under that transaction or contract.
(2) After notice and hearing the Mayor may also order the insurer to void any contracts and restore the status quo if that action is in the best interest of the policyholders, creditors, or the public.
(d)(1) Whenever it appears to the Mayor that any insurer, or any director, officer, employee, or agent, has committed a willful violation of this subchapter, the Mayor may cause criminal proceedings to be instituted in the Superior Court of the District of Columbia against the insurer or the responsible director, officer, employee, or agent.
(2) Any insurer that willfully violates this subchapter may be fined not more than $1,000,000.
(3) Any individual who willfully violates this subchapter may be fined in his or her individual capacity not more than $750,000 or be imprisoned for not more than 1 to 3 years, or both.
(e) Any officer, director, or employee of an insurance holding company system who willfully and knowingly subscribes to, or makes or causes to be made, any false statements, false reports, or false filings with the intent to deceive the Mayor in the performance of his or her duties under this subchapter, upon conviction, shall be imprisoned for not more than 3 to 5 years or fined $100,000, or both. Any fines imposed shall be paid by the officer, director, or employee in his or her individual capacity.
(e-1) Whenever it appears to the Mayor that a person has committed a violation of § 31-703, which 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 in accordance with the insurance laws of the District of Columbia.
(f) Civil fines, penalties, and fees may be imposed as alternative sanctions for any infraction of the provisions of this subchapter, or any rules or regulations issued under the authority of this subchapter, pursuant to Chapter 18 of Title 2. Adjudication of any infraction of this subchapter shall be pursuant to Chapter 18 of Title 2.
(Oct. 21, 1993, D.C. Law 10-44, § 12, 40 DCR 6027; Mar. 11, 2015, D.C. Law 20-235, § 2(i), 62 DCR 461.)
Prior Codifications
1981 Ed., § 35-3710.
Section References
This section is referenced in § 31-706.
Effect of Amendments
The 2015 amendment by D.C. Law 20-235 added (e-1).
Editor's Notes
Because of the codification of D.C. Law 11-159 as subchapter II of Chapter 37 of Title 35 [subchapter II of Chapter 7 of Title 31, 2001 Ed.], and the designation of the preexisting text as subchapter I, “subchapter” has been substituted for “chapter” throughout the section.