A guest blog by Carrie Cope of Schuyler, Roche & Crisham, P.C.:

There are times when the unwelcome discovery of a regulatory violation, such as the inadvertent issuance of an insurance policy in a state where the company isn’t licensed, can put an insurer between that proverbial “rock and a hard place.” While disclosure to the governing regulatory agency may be the company’s preferred plan of action to resolve the problem, management may be concerned that voluntarily disclosing it may result in a fine or penalty or uncover more than hypothetical worms under that proverbial rock. As a result, it’s not surprising that insurance companies approach resolving such problems with different strategies.