NORTH CAROLINA STATUTES AND
REGULATIONS PERTINENT TO CASUALTY
INSURANCE | COMPREHENSIVE EXAM
PREP, PRACTICE QUESTIONS, CORRECT
ANSWERS AND STUDY GUIDE
| GRADED A+ | GUARANTEED SUCCESS
Updated 2026 Questions and Answers
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,INJUNCTIVE POWERS Commissioner may apply to court for a restraining order & injunction to prevent a person
from violating the insurance laws if a person is convicted of a criminal violation of the
insurance laws or enters a plea of no contest. Their license is automatically suspended
until reinstated by Commissioner
SURRENDER OF LICENSE If a licensee is accused of an act, omission, or misconduct, that would be grounds for
suspending or revoking a license, he or she may surrender the license. A person or entity
who surrenders a license is not eligible for another during the surrender period.
NOTIFICATION OF A CHANGE OF ADDRESS A person who applies for an insurance producer's license must give the Department a
residential address and an e-mail address. If the person changes either address, he or she
must notify the Department within 10 days. A person who violates this requirement must
pay a $50 administrative fee
NOTIFICATION OF CRIMINAL CONVICTIONS If a producer is convicted of a crime (other than a motor vehicle infraction), he or she
must notify the Commissioner in writing within 10 days after the date of conviction. A
conviction includes an adjudication of guilt, a guilty plea, or a plea of nolo contendere
(no contest).
IMMUNITY FOR REPORTING FRAUD When acting in good faith, a person who reports insurance fraud is immune from any
liability for providing information to or cooperating with the Commissioner or law
enforcement agencies. However, a person who does so with malice or in bad faith is not
granted the same protection.
HEARINGS & PENALTIES FOR VIOLATIONS ~A person who is charged with engaging in an unfair method of competition or
committing an unfair or deceptive act or practice is entitled to a hearing before the
Commissioner. The person must be notified of the time and place of the hearing in
advance. The notice will also specify the offenses and violations with which the person is
charged.
If the Commissioner determines that a violation has occurred, he or she may
•suspend or revoke a license or certificate of authority;
•petition a court to impose an order seeking restitution; and/or
•impose a fine between $100 and $1,000 for each violation.
, INVESTIGATION OF CHARGES ~Commissioner may examine the books & records of an insurer & may question its officers
and agents whenever he or she deems it necessary. Commissioner may also examine an
insurer & its agents if a person files a complaint stating that the insurer has violated the
insurance laws.
The insurer is responsible for paying all costs of an examination if Commissioner
determines that the company has violated the insurance laws.
FRAUDULENT CLAIMS ~A person who knowingly presents a false insurance claim, with the intent to defraud or
deceive, or who assists another in doing so, is guilty of a Class H felony.
A person convicted of insurance fraud will also be ordered to pay restitution to the
victims for the amount of money that was obtained through fraud.
In a civil action for insurance fraud, the court may award the prevailing party
compensatory damages, attorneys' fees, costs, and reasonable investigative costs. If the
prevailing party can demonstrate that the defendant engaged in a pattern of insurance
fraud, the court may award treble damages.
EMBEZZLEMENT & MISAPPROPRIATION ~An insurance agent, broker, or administrator who embezzled or fraudulently converts
money or other consideration received while transacting insurance is guilty of a felony. A
person will be guilty of one of the following:
•a Class H felony, if the amount involved is less than $100,000
•a Class C felony, if the amount involved is $100,000 or more
PENALTY FOR FALSE STATEMENT A person who willfully misstates information in a financial statement or other document is
guilty of a Class 1 felony. The entity on whose behalf the person made the false statement
must pay a fine of between $2,000 and $10,000.
REPORTING OF VIOLATIONS ~Anyone who believes that insurance fraud, embezzlement, or a violation of the
insurance laws is being or has been committed is required to notify the Commissioner.
Insurers and their employees must also notify the Commissioner if they believe that an
insurer is financially impaired. A person's license may be revoked or not renewed if he or
she willfully fails to comply with this requirement.
REGULATIONS PERTINENT TO CASUALTY
INSURANCE | COMPREHENSIVE EXAM
PREP, PRACTICE QUESTIONS, CORRECT
ANSWERS AND STUDY GUIDE
| GRADED A+ | GUARANTEED SUCCESS
Updated 2026 Questions and Answers
100% Verified Exam Prep
,INJUNCTIVE POWERS Commissioner may apply to court for a restraining order & injunction to prevent a person
from violating the insurance laws if a person is convicted of a criminal violation of the
insurance laws or enters a plea of no contest. Their license is automatically suspended
until reinstated by Commissioner
SURRENDER OF LICENSE If a licensee is accused of an act, omission, or misconduct, that would be grounds for
suspending or revoking a license, he or she may surrender the license. A person or entity
who surrenders a license is not eligible for another during the surrender period.
NOTIFICATION OF A CHANGE OF ADDRESS A person who applies for an insurance producer's license must give the Department a
residential address and an e-mail address. If the person changes either address, he or she
must notify the Department within 10 days. A person who violates this requirement must
pay a $50 administrative fee
NOTIFICATION OF CRIMINAL CONVICTIONS If a producer is convicted of a crime (other than a motor vehicle infraction), he or she
must notify the Commissioner in writing within 10 days after the date of conviction. A
conviction includes an adjudication of guilt, a guilty plea, or a plea of nolo contendere
(no contest).
IMMUNITY FOR REPORTING FRAUD When acting in good faith, a person who reports insurance fraud is immune from any
liability for providing information to or cooperating with the Commissioner or law
enforcement agencies. However, a person who does so with malice or in bad faith is not
granted the same protection.
HEARINGS & PENALTIES FOR VIOLATIONS ~A person who is charged with engaging in an unfair method of competition or
committing an unfair or deceptive act or practice is entitled to a hearing before the
Commissioner. The person must be notified of the time and place of the hearing in
advance. The notice will also specify the offenses and violations with which the person is
charged.
If the Commissioner determines that a violation has occurred, he or she may
•suspend or revoke a license or certificate of authority;
•petition a court to impose an order seeking restitution; and/or
•impose a fine between $100 and $1,000 for each violation.
, INVESTIGATION OF CHARGES ~Commissioner may examine the books & records of an insurer & may question its officers
and agents whenever he or she deems it necessary. Commissioner may also examine an
insurer & its agents if a person files a complaint stating that the insurer has violated the
insurance laws.
The insurer is responsible for paying all costs of an examination if Commissioner
determines that the company has violated the insurance laws.
FRAUDULENT CLAIMS ~A person who knowingly presents a false insurance claim, with the intent to defraud or
deceive, or who assists another in doing so, is guilty of a Class H felony.
A person convicted of insurance fraud will also be ordered to pay restitution to the
victims for the amount of money that was obtained through fraud.
In a civil action for insurance fraud, the court may award the prevailing party
compensatory damages, attorneys' fees, costs, and reasonable investigative costs. If the
prevailing party can demonstrate that the defendant engaged in a pattern of insurance
fraud, the court may award treble damages.
EMBEZZLEMENT & MISAPPROPRIATION ~An insurance agent, broker, or administrator who embezzled or fraudulently converts
money or other consideration received while transacting insurance is guilty of a felony. A
person will be guilty of one of the following:
•a Class H felony, if the amount involved is less than $100,000
•a Class C felony, if the amount involved is $100,000 or more
PENALTY FOR FALSE STATEMENT A person who willfully misstates information in a financial statement or other document is
guilty of a Class 1 felony. The entity on whose behalf the person made the false statement
must pay a fine of between $2,000 and $10,000.
REPORTING OF VIOLATIONS ~Anyone who believes that insurance fraud, embezzlement, or a violation of the
insurance laws is being or has been committed is required to notify the Commissioner.
Insurers and their employees must also notify the Commissioner if they believe that an
insurer is financially impaired. A person's license may be revoked or not renewed if he or
she willfully fails to comply with this requirement.
