An officer of an insurance company willfully makes a false statement in the company's financial statement filed under oath with the North Carolina Department of Insurance. What are the consequences for the company and for the officer?

Why A is correct

Under G.S. 58-2-180, a person who willfully makes a false statement in a statement required to be made under oath or by subscription is guilty of a Class I felony. When the violator is an entity, the court fines the entity not less than $2,000 nor more than $10,000. This is the gravest of the false-statement provisions because the sworn financial statement goes to the core of solvency oversight by the Commissioner of Insurance.

Why the other options are wrong

• B) $100 to $1,000 is the Commissioner's civil penalty range under G.S. 58-2-70(d), and a Class 1 misdemeanor is the grade for false application statements under G.S. 58-33-105; neither fits a sworn financial statement under G.S. 58-2-180.
• C) $1,000 to $5,000 is the forfeiture for violating a cease-and-desist order under G.S. 58-63-50, not the entity fine under G.S. 58-2-180.
• D) The entity fine is right, but the individual's offense is a Class I felony under G.S. 58-2-180, not a Class 1 misdemeanor.

Memory hook

Sworn lie = felony for you, two-to-ten grand for the company.