New Jersey Life and Health State Practice Exam

If a producer disregards a subpoena issued by the Commissioner, what can the Commissioner do?

1. Dismiss the case

2. Impose an administrative penalty

3. Take legal action

4. Issue a warning

The correct answer is: Impose an administrative penalty

When a producer disregards a subpoena issued by the Commissioner, the Commissioner has the authority to impose an administrative penalty as a form of enforcement. This is crucial because subpoenas are legal documents that compel individuals to provide testimony or produce evidence in a legal proceeding. Ignoring such a subpoena undermines the regulatory process and the powers vested in the Commissioner to conduct investigations and ensure compliance with insurance laws. Administrative penalties may vary in severity and can include fines or other disciplinary measures designed to uphold the integrity of the insurance regulatory framework. By imposing penalties, the Commissioner can deter future non-compliance and maintain order within the insurance industry. Other potential actions, such as dismissing the case, taking legal action, or issuing a warning, may not apply or might be less effective in addressing the specific issue of non-compliance with a subpoena. Instead, the imposition of an administrative penalty serves both as a consequence for the producer and as a stern reminder of the legal obligations imposed on insurance professionals.