State RegulationsNC specificDifficulty 1/5
A person in Durham uses fabricated documents to obtain policy benefits from an insurer. Under North Carolina law, insurance fraud of this kind is prosecuted under:
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Answer & full 3-part explanation (select an option above, or peek)
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.