State RegulationsNC specificDifficulty 2/5
A person in Charlotte knowingly submits a fraudulent accident and health application in order to obtain insurance coverage by false representation. Under North Carolina law, obtaining property through such insurance fraud is prosecuted under which provision?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Insurance fraud — obtaining property through knowingly false representations connected to an insurance transaction — is prosecuted in North Carolina under the general false pretenses and cheats statute, G.S. 14-100, whose felony classification depends on the value of the property obtained. The unfair trade practices article and the standard policy provisions are civil and regulatory in nature, and the ethical standards rule is an administrative conduct rule — none of them is a criminal charging statute.
Why the other options are wrong
- B: G.S. 58-63-15 authorizes the Commissioner to act against unfair and deceptive trade practices civilly and administratively; it is not the criminal statute used to prosecute fraud.
- C: G.S. 58-51-15 sets the standard provisions required in accident and health policies; it creates no criminal offense.
- D: 11 NCAC 4 .0423 sets ethical standards of conduct for producers; an administrative rule cannot serve as the charging provision for insurance fraud.
Memory hook
Insurance fraud = plain old false pretenses, G.S. 14-100.