A person obtains money from an insurer by presenting a fabricated claim. Under which North Carolina authority is this insurance fraud prosecuted, and what determines its severity?

Why B is correct

Under G.S. 14-100, obtaining property by false pretenses is the general criminal statute under which insurance fraud is prosecuted in North Carolina; whether the offense is a felony, and at what level, depends on the amount involved. Administrative remedies available to the Commissioner operate alongside, but never replace, this criminal prosecution.

Why the other options are wrong

• A) A civil penalty of $100 to $1,000 does not displace criminal prosecution under G.S. 14-100; the two tracks differ in kind.
• C) Continuing education rules govern licensing compliance and have nothing to do with criminal fraud.
• D) The privacy act addresses the handling of personal information, not the prosecution of fraudulent claims.

Memory hook

Insurance fraud rides the general false-pretenses statute - G.S. 14-100.

Why C is correct

North Carolina prosecutes insurance fraud under G.S. 14-100, the general false pretenses and cheats statute, rather than under a specialized insurance fraud provision. Obtaining property by false pretenses is a felony whose classification depends on the value of the property or benefits obtained. This means a fraudulent benefits claim exposes the claimant to felony prosecution under the general criminal law, alongside any administrative action by the Commissioner of Insurance.

Why the other options are wrong

• A) G.S. 14-100 false pretenses is a felony statute whose grade varies with the amount obtained; it is not fixed as a Class 1 misdemeanor.
• B) False pretenses is a criminal prosecution under G.S. 14-100, not merely a civil enforcement matter for the Commissioner.
• D) The amount obtained determines the felony classification under G.S. 14-100, but there is no universal minimum threshold below which prosecution is impossible.

Memory hook

Insurance fraud borrows the old false-pretenses felony — grade follows the take.

Why A is correct

Insurance fraud in North Carolina is prosecuted under the general false pretenses statute, G.S. 14-100, which criminalizes obtaining property by false pretenses; the felony classification depends on the amount obtained. Regulatory provisions of Chapter 58 operate alongside, but this general criminal statute is the vehicle for the fraud itself.

Why the other options are wrong

• B) G.S. 58-33-105 covers false or fraudulent statements made in insurance applications, a Class 1 misdemeanor; this scenario is about obtaining a claim payment by fraud.
• C) G.S. 58-2-180 addresses willful false statements in required filings made under oath or by subscription, not claim-submitting fraud.
• D) G.S. 58-63-50 is the civil forfeiture for willfully violating a cease-and-desist order; it is not a criminal fraud statute.

Memory hook

Claim fraud is old-fashioned false pretenses: G.S. 14-100.