Administrative fine in lieu of suspension or revocation of license of association.

(1) If it is found that one or more grounds exist for the suspension, revocation, or refusal to renew the license of any association issued under this part, the office may, in lieu of such revocation or suspension, impose a fine upon the association.

(2) With respect to any nonwillful violation, such fine may not exceed $500 per violation. In no event may such fine exceed an aggregate amount of $5,000 for all nonwillful violations arising out of the same action. When an association discovers a nonwillful violation, the association shall correct the violation and, if restitution is due, make restitution to all affected persons. Such restitution shall include interest at 12 percent per year from either the date of the violation or the date of inception of the affected person’s policy, at the option of the association.

(3) With respect to any knowing and willful violation of a lawful order or rule of the office or commission or a provision of this part, the office may impose a fine upon the association in an amount not to exceed $2,500 for each such violation. In no event may such fine exceed an aggregate amount of $25,000 for all knowing and willful violations arising out of the same action. In addition to such fines, an association shall make restitution when due in accordance with the provisions of subsection (2).

(4) The failure of an association to make restitution when due, as required under this section, constitutes a willful violation of this code. However, if an insurer in good faith is uncertain as to whether any restitution is due or as to the amount of such restitution, it shall promptly notify the office of the circumstances, and the failure to make restitution pending a determination thereof will not constitute a violation of this part.