An applicant in Charlotte knowingly submits a fabricated burglary claim to collect insurance benefits. Under North Carolina law, insurance fraud of this kind is prosecuted under:

Why B is correct

Under North Carolina law, obtaining property by false pretenses, including insurance benefits obtained through a fabricated claim, is prosecuted under the general false pretenses statute, G.S. 14-100. The felony classification depends on the amount involved, so the statute reaches insurance fraud without a separate insurance-specific fraud provision.

Why the other options are wrong

• A is wrong because the Unfair Trade Practices Act is a civil regulatory framework enforced by the Commissioner; it does not criminally prosecute an applicant's fabricated claim.
• C is wrong because G.S. 58-2-180 covers willful false statements under oath or subscription in required financial statements, not fraudulent claims submitted to collect benefits.
• D is wrong because G.S. 58-33-105 addresses false or fraudulent statements made in applications for insurance, which is a different trigger than presenting a fake claim.

Memory hook

Fake claim, real crime - North Carolina insurance fraud goes through G.S. 14-100.

Why B is correct

Under G.S. 14-100, obtaining property by false pretenses is the general criminal statute through which insurance fraud - such as using fabricated documents to collect policy benefits - is prosecuted in North Carolina. The felony classification depends on the amount of property obtained, so no fixed fine or dollar threshold should be assumed from the statute itself.

Why the other options are wrong

• A) The unfair trade practices article provides civil and regulatory remedies for market conduct, not criminal prosecution of fraud by insureds.
• C) No special insurance fraud statute with a fixed fine governs here; prosecution runs through the general false pretenses statute with amount-based classification.
• D) The guaranty association protects policyholders against insurer insolvency and plays no role in prosecuting applicant or claimant fraud.

Memory hook

Insurance fraud in NC rides on the old false-pretenses horse, G.S. 14-100.

Why D is correct

Insurance fraud — obtaining property such as commissions through deliberate deception — is prosecuted in North Carolina under the general false pretenses statute, G.S. 14-100. The felony class depends on the value of the property obtained, which is exactly why exam questions never key a specific amount to this offense. Administrative penalties and license actions may follow separately, but the criminal charge for the fraud itself arises under G.S. 14-100.

Why the other options are wrong

• A) G.S. 58-63-50 punishes willful violation of a cease-and-desist order; it neither defines the fraud nor supplies the criminal classification.
• B) G.S. 58-33-105 covers knowingly false statements in insurance applications as a Class 1 misdemeanor, but this scheme to obtain commissions by fabricated documents is property fraud prosecuted under G.S. 14-100.
• C) The $100 to $1,000 civil penalty under G.S. 58-2-70 is a regulatory remedy; it does not classify or replace the criminal false-pretenses charge.

Memory hook

Insurance fraud rides the general false pretenses statute — G.S. 14-100 — with class set by the take.

Why D is correct

North Carolina prosecutes insurance fraud under the general false pretenses statute, G.S. 14-100, which criminalizes obtaining property by false pretenses; the felony classification depends on the amount involved. The insurance code does not supply a separate criminal fraud scheme for fabricated claims.

Why the other options are wrong

• A) G.S. 58-33-105 addresses false statements made in insurance applications (a Class 1 misdemeanor); it is not the vehicle for prosecuting a fabricated claim.
• B) G.S. 58-2-70 provides administrative civil penalties; it does not substitute for criminal prosecution.
• C) G.S. 58-62-21 governs the guaranty association and has nothing to do with prosecuting fraud.

Memory hook

Fraudulent claims go through the general false-pretenses statute.

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 knowingly false pretenses. The felony classification depends on the amount obtained, so the same statute reaches both small and large frauds. This general criminal statute, not an insurance-specific provision, supplies the fraud exposure for benefit scams.

Why the other options are wrong

• B) G.S. 58-33-105 makes false statements in insurance applications a Class 1 misdemeanor, a distinct offense that does not displace prosecution under G.S. 14-100.
• C) A civil penalty under G.S. 58-2-70 is an administrative remedy and does not replace criminal prosecution.
• D) G.S. 58-63-50 applies only to willful violation of a cease-and-desist order, which is not part of this fact pattern.

Memory hook

Insurance fraud runs through G.S. 14-100 - false pretenses, felony by amount.