(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 of this chapter, 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 ($1000) and imprisonment of up to one year, or both.

(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.