State RegulationsNC specificDifficulty 3/5
A North Carolina producer's first-year business consists mostly of policies sold to himself, his spouse, and his own business. Under North Carolina law, what limit applies to this so-called controlled business?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under North Carolina insurance law (Article 33 of Chapter 58), there is no controlled-business percentage limit; the former provision was repealed, and no statute caps the share of a producer's business written on his own risks or those of close associates. A producer who asks this question should understand that licensing compliance instead runs through continuing education and insurer appointments.
Why the other options are wrong
- A) A fixed percentage cap is the approach of some other jurisdictions but has no counterpart in North Carolina law.
- C) Controlled business is not prohibited; North Carolina simply imposes no ratio at all.
- D) The Commissioner has no authority to set an individualized cap, and no such rule exists.
Memory hook
North Carolina has no controlled-business ratio - do not import one from elsewhere.