40-3311. Violations of act; penalties.
40-3311
40-3311. Violations of act; penalties.(a) Every director or officer of an insurance holding company system whoknowingly violates, participates in, or assents to, or who knowingly shallpermit any of the officers or agents of the insurer to engage in transactionsor make investments which have not been properly reported or submittedpursuant to subsection (a)of K.S.A. 40-3305 or subsections (c) or (d) of K.S.A.40-3306 and amendments thereto, or which otherwise violates this act, shallpay,in such directors' or officers' individual capacity, a civil forfeiture of notmore than $5,000 perviolation, after notice and hearing before the commissioner. In determiningthe amount of the civil forfeiture, the commissioner shall take into accountthe appropriateness of the forfeiture with respect to the gravity of theviolation, the history of previous violations, and such other matters asjustice may require.
(b) Whenever it appears to the commissioner that any insurersubject tothis act or any director, officer, employee or agent thereof has engaged in anytransaction or entered into a contract which is subject to K.S.A.40-3306 and amendments thereto and which would not have been approved had suchapproval been requested, the commissioner may order the insurer to cease anddesist immediately any further activity under that transaction or contract.After notice and hearing the commissioner may also order the insurer to voidany such contracts and restore the status quo if such action is in the bestinterest of the policyholders, creditors or the public.
(c) Whenever it appears to the commissioner that any insurer oranydirector, officer, employee or agent thereof has committed a willful violationof this act, the commissioner may cause criminal proceedings to be institutedby the district court for the county in which the principal office of theinsurer is located or if such insurer has no such office in this state, then bythe district court for Shawnee county against such insurer or the responsibledirector, officer, employee or agent thereof. Any insurer which willfullyviolates this act may be fined not more than $50,000. Any individual whowillfully violates this act may be fined in individual capacity not more than$10,000 or, be imprisoned for not more than one to three years, or both.
(d) Any officer, director or employee of an insurance holdingcompanysystem who knew or reasonably should have known they were subscribing to ormaking or causing to be made any false statements, false reports or falsefilings with the intent to deceive the commissioner in the performance ofduties under this act, upon conviction thereof, shall be imprisoned for notmore than five to 10 years or fined $100,000, or both. Any fines imposed shallbe paid by the officer, director or employee in such person's individualcapacity.
History: L. 1974, ch. 183, § 11; L. 1976, ch. 217, § 3;L. 1991, ch. 138, § 6;L. 1992, ch. 288, § 7;L. 1997, ch. 24, § 6; July 1.