Question 21

A cease and desist order issued against an agent prohibits a specific practice listed in the order.

A cease and desist order specifically targets certain practices, instructing the agent to refrain from engaging in those activities as outlined in the order.

A) prohibits a specific practice listed in the order.

This option is correct because a cease and desist order explicitly identifies and restricts particular actions or practices that an agent must stop. It serves as a formal notice to ensure compliance with regulatory standards.

B) prevents the agent from receiving commissions.

This option is incorrect as a cease and desist order does not inherently affect the agent's ability to receive commissions. The order may pertain to specific practices rather than general financial remuneration.

C) terminates the agent's appointment with the insurer.

This option is also incorrect. A cease and desist order does not automatically terminate an agent's appointment; it merely restricts certain behaviors. Termination would require a separate action or decision by the insurer.

D) suspends the agent's license.

This option is incorrect since a cease and desist order is not the same as a suspension of an agent's license. The order may impose restrictions but does not revoke or suspend the license itself.

Conclusion

A cease and desist order is designed to prohibit specific practices, making option A the definitive correct answer. The other options fail as they misinterpret the nature of such an order, which focuses on restricting behavior rather than altering an agent's financial status or employment status.