State RegulationsNC specificDifficulty 1/5
For purposes of North Carolina insurance law, how is the term 'insurer' best understood under the Article 1 definitions in G.S. 58-1-5?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under G.S. 58-1-5, the Article 1 definitions treat an insurer as any person or entity engaged in the business of making insurance contracts, regardless of ownership form or domicile. The breadth of this definition matters in practice: it captures stock and mutual companies and similar entities, all of which fall under the Commissioner of Insurance's regulatory authority.
Why the other options are wrong
- A) The definition is not limited to one ownership form or to companies domiciled elsewhere; entities in the business of insurance generally qualify.
- C) The producer who sells the policy is a licensee acting for the insurer, not the insurer itself.
- D) The North Carolina Department of Insurance is the regulator of insurers, not an insurer.
Memory hook
Insurer = whoever is in the insurance business, whatever its form.