NC PC exam
Converge D: Fair Rental Value - correct answer Rental value really
limit of 20% of the coverage A limit.
Contract of Insurance - correct answer A contract of insurance is an agreement that
obligates an insurer to compensate an insured when there is destruction, loss, or injury to something in
which the insured has an interest.
Commissioner of Insurance (election) - correct answer - Elected by NC residents
- Severs for four years
- If they leave prior to end of term, the governor takes over position
Commissioner of Insurance Duties/Powers - correct answer Advises the Governor
on insurance matters
DOES NOT ESTABLISH LAWS/Rules/Regulations!!
Administering and executing the applicable laws in North Carolina and adopting rules to enforce and
carry out the provisions of those laws
Receiving and examining each financial statement required by law
Conducting examinations, investigations, and hearings as necessary to administer state insurance laws
Reporting to the Attorney General any violations of laws relative to insurance companies and the overall
business of insurance
Compiling and making available to the public a list of rates charged and explanations of coverages
provided by insurers in connection with residential property and private passenger insurance
,Approving or disapproving rates, forms, classification plans, rating plans, plans of operation, and Safe
Driver Incentive Plans
Upon request by any citizen of North Carolina, providing a statement of the provisions of any insurance
contract offered or issued to that citizen
Seeking restraining orders, from the appropriate superior courts, against persons who are violating
insurance laws
Notifications to the Commissioner - correct answer Every applicant for a license
MUST provide the Commissioner with a residential address and email address.
A licensee MUST notify the Commissioner in writing within 10 days of a change in residential address or
email address.
Same goes for violations (10 days)
If a licensee is convicted in a court of competent jurisdiction for any crime, OTHER than a minor traffic
infraction, the licensee must notify the Commissioner in writing within 10 days after the conviction.
Civil Penalties or Restitution for Violations - correct answer Violation of any
provisions of the general statutes subjects the licensee to suspension or revocation, after notice and
opportunity for a hearing. After a hearing, the Commissioner may, in addition to or instead of
suspending or revoking a license, order payment of a monetary penalty. The penalty cannot be less than
$100 or more than $1,000 and will be in addition to payment of any other penalty for a violation of the
criminal laws of this state.
Judicial Review - correct answer Any order or decision made, issued, or executed by
the Commissioner will be subject to a judicial review in the Superior Court if a petition is filed within 30
days from the date of delivery of the order or decision. The judicial review does not apply to an order
regarding financial impairment or a decision that the premium rates charged or filed on any class of risk
are excessive, inadequate, or unfairly discriminatory.
,Investigations of Complaints - correct answer A citizen of this state may file a
complaint that a company authorized to do business in this state has violated any provisions of these
laws. The Commissioner must investigate the citizen's complaint against an insurer and may examine
the insurer's books, records, and documents. The Commissioner may request information for an
investigation from any person. Any person, employee, or agent acting without malice, is not subject to
civil liability for libel or slander by providing to the Commissioner reports or other information relating
to any known or suspected fraudulent insurance claims or transactions.
If the complaint is justified, the insurer must pay investigation expenses and any appropriate fines.
False Statements to Procure or Deny Benefits - correct answer Any person who
presents a written or oral statement that contains false or misleading information material to a claim to
procure or deny benefits is guilty of a Class H felony. The person must have the intent to injure, defraud,
or deceive an insurer or insurance claimant.
Each claim is considered a separate count. Upon conviction the court may impose probation and order
the defendant to pay restitution, including compensatory damages, attorney's fees, costs, and
reasonable investigation costs.
Embezzlement - correct answer An insurance agent, broker, or administrator who
does any of the following with money or consideration received based on their performance will be
guilty of a felony:
Embezzles
Fraudulently converts for their own use or withholds
Disposes of
Appropriates
Lends
Invests
Embezzlement in the amount of $100,000 or more is a Class C felony; less than $100,000 is a Class H
felony.
Report to the Commissioner - correct answer Any insurance company, employee,
representative, or licensee who has reason to believe that any other person has violated the law or that
any entity licensed by the Commissioner is financially impaired must inform the Commissioner and
provide a complete statement of all relevant facts. The Commissioner may suspend, revoke, or refuse to
renew the license of any licensee who fails to comply.
, Punishment for Misstatements - correct answer Making willful misstatements of
information in financial or other required statements is a Class I felony, punishable by a fine of not less
than $2,000 and not more than $10,000.
Records Maintenance/Inspection - correct answer All companies, agents, or brokers
doing any kind of insurance business in North Carolina must make and keep a full and correct record of
the business done by them. This includes:
The policy/certificate of renewal number, date, term, amount insured, premiums
The person(s) to whom it was issued
Information from these records must be provided to the Commissioner on demand, and the original
books of record shall be open to the Commissioner's inspection whenever they so request.
Producer of Record - correct answer Every insurance agency transacting insurance
business in North Carolina shall appoint a producer of record. This person shall have the responsibility of
seeing that all records are maintained as required and provided to the Commissioner as requested.
Any person who is subject to and violates the record-keeping regulations may be subject to the
following disciplines after a notice and hearing:
For the first offense, the person may have their license suspended or revoked for not less than one
month or more than 6 months
For the second offense, the person may have their license suspended or revoked for one year
Any person who refuses to provide records required by the Commissioner or who makes any false
statements about records is guilty of a Class 1 misdemeanor and subject to license suspension or
revocation.
Complaint Records - correct answer Every insurer or its agents must maintain a
record of all written complaints for at least 5 years after the complaint's final disposition. For domestic
companies, the complaint must be kept until the Commissioner has adopted a final report of a general
examination that contains a review of those records for that calendar year, or for 5 years, whichever is
later. These records may be subject to inspection and should contain at a minimum the:
Insured's name
Nature of the complaint
Policy/claim number of the insured
Final disposition of the complaint
