New Jersey Life Producer Practice Exam

What is the standard penalty for failing to comply with a subpoena in an insurance investigation?

1. Criminal charge

2. Fine

3. Contempt of court

4. Revocation of license

The correct answer is: Contempt of court

The standard penalty for failing to comply with a subpoena in an insurance investigation is contempt of court. This is a legal term that signifies an individual's disobedience or disrespect towards the court's order. When a subpoena is issued, it represents a demand from the court that must be honored, and failing to comply can be seen as undermining the authority of the judicial process. Contempt of court can lead to various consequences, including fines or even imprisonment, as the court seeks to enforce compliance with its orders. The purpose of subpoenas in insurance investigations is to gather information crucial for determining the legitimacy of insurance claims or practices. Thus, refusing to comply not only impedes this process but also demonstrates a lack of cooperation with legal proceedings, warranting the classification of contempt. The other consequences listed, such as criminal charges, fines, or revocation of a license, may apply in different contexts or for different legal violations but are not the direct standard penalty for non-compliance with a subpoena specifically in the context of insurance investigations.