(a)  Whenever an officer or director of an insurance company knows that a material false statement or representation has been made to the director, or the director’s designee, or that false testimony has been given, or that a material false entry has been made in the books of the insurance company, or that the assets, property, or securities of an insurance company have been materially overvalued, or that material information has been withheld from the director, or the director’s designee, in violation of § 27-54-1, he or she shall notify the director, or the director’s designee, of those matters as soon as reasonably possible but in no event later than ten (10) days after the officer or director knows or has reasons to know of those matters. Failure to report as such will subject the violator to a fine of up to one thousand dollars ($1,000) and imprisonment of up to one year, or both.

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(b)  The director, or the director’s designee, shall review each report and undertake any further investigations he or she deems necessary and proper to determine the validity of the allegations.