An applicant for an accident and health policy in North Carolina knowingly makes a false statement about a recent hospitalization in the application in order to obtain coverage. Under G.S. 58-33-105, this conduct is:

Why B is correct

G.S. 58-33-105 makes it a Class 1 misdemeanor for a producer, the examining physician, the applicant, or any other person to knowingly and willfully make a false or fraudulent statement in an insurance application, or to make such a statement to obtain a fee, commission, or benefit. Note the contrast with G.S. 58-2-180, where willfully false sworn financial statements are a Class I felony for the individual and a $2,000 to $10,000 fine for the entity.

Why the other options are wrong

• A) Class I felony treatment is reserved under G.S. 58-2-180 for willfully false statements made under oath or subscription in required filings — not ordinary application misstatements, which are Class 1 misdemeanors.
• C) G.S. 58-33-105 is a criminal provision, so the conduct is not merely a civil matter punishable by a $100 to $1,000 administrative penalty.
• D) The statute expressly creates criminal misdemeanor exposure; calling it a non-criminal unfair trade practice misreads G.S. 58-33-105.

Memory hook

Lie on an application — Class 1 misdemeanor, whichever side of the form you're on.