Hawaii Insurance License Practice Exam

What is the fine per violation for unknowingly committing an unfair or deceptive act in the business of insurance?

1. $500

2. $1,000

3. $2,500

4. $5,000

The correct answer is: $1,000

The correct answer reflects the statutory penalty within the context of insurance-related violations. Under Hawaii law, the fine for unknowingly committing an unfair or deceptive act in the business of insurance is established to hold entities accountable while recognizing the absence of intent. A fine of $1,000 is set, affirming that while negligence may not warrant as severe a penalty as intentional misconduct, there is still a significant financial consequence meant to encourage compliance with regulatory standards and protect consumers. This specific amount is designed to deter insurance companies and professionals from engaging in practices that could mislead or harm consumers, fostering a more transparent and fair marketplace. The level of the fine is calibrated to balance the need for punishment and the acknowledgment that the violation was not committed with intentional malice or deceit. Other amounts do not accurately reflect the penalty outlined in the law for such violations, as lesser fines would not convey the seriousness of the issue while higher fines suggest a level of intentional wrongdoing that does not apply in this context.