If a claim is not properly notified to the excess carrier, which outcome is possible for the excess carrier?

• A. Three times the amount unlawfully collected.
• B. A fine levied by regulatory authorities.
• C. Imprisonment for noncompliance.
• D. A requirement to provide retroactive coverage.

Answer: (A)

Notifying the excess carrier promptly is essential for the proper coordination of any claim that may fall under the excess layer. When a claim isn’t properly notified, the law provides a civil remedy that can require the party at fault to pay three times the amount that was unlawfully collected. This treble-damages penalty is designed to deter failures to report and to ensure the excess layer is aware of claims that could impact its coverage, so settlements and payments are handled correctly within the policy structure.

In practice, this means the primary motive behind the penalty is to encourage timely and accurate reporting, rather than to impose ordinary fines, criminal penalties, or retroactive coverage requirements. The other options reflect different kinds of penalties or remedies that aren’t the standard consequence for failure to notify an excess carrier in this context.