What is a Cease and Desist Order?

A Cease and Desist Order is a legal directive issued by a regulatory authority, such as an insurance regulatory agency, requiring an entity to stop engaging in practices that violate laws or regulations. In the context of insurance, this order is often issued when a company or individual is found to be in violation of insurance statutes, which may include unlawful sales practices, operating without a proper license, or other forms of misconduct that could harm consumers or disrupt the marketplace.

Receiving a Cease and Desist Order indicates that the regulatory body has identified specific issues that necessitate immediate action to protect the public interest and ensure compliance with legal standards. Compliance with such an order is crucial, as failure to adhere can result in further legal consequences, including fines or the loss of licensure to operate in the state. This context helps clarify why the other options do not align with the definition of a Cease and Desist Order, as they reference awards, approvals, or unfettered operation rather than the corrective action mandated by regulatory authorities.