State RegulationsNC specificDifficulty 3/5
A producer plans to concentrate sales on policies covering the producer's own family members and closely held business. What limit does North Carolina place on this 'controlled business' as a share of the producer's sales?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
North Carolina has no controlled-business percentage restriction: the former limiting provision was repealed, and current Article 33 of Chapter 58 contains no cap on the share of business a producer may write for family or affiliated interests. A producer who lawfully holds an insurable interest in such risks may write them without a statutory ceiling, though insurer underwriting and the producer ethical standards in 11 NCAC 4 .0423 still apply.
Why the other options are wrong
- A) No 25% cap exists in North Carolina law; Article 33 of Chapter 58 contains no controlled-business percentage limit.
- B) A 50% ceiling is a feature of other states' statutes, not of North Carolina's; NC imposes no percentage limit.
- C) Ten percent has no basis in Chapter 58; the correct concept answer is that no controlled-business percentage limit exists in North Carolina.
Memory hook
NC trusts its producers: no controlled-business cap.