State RegulationsNC specificDifficulty 2/5
Under the producer ethical standards rule of 11 NCAC 4 .0423 cited in the North Carolina content outlines, a producer's dealings with applicants and clients must fundamentally reflect:
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
The ethical standards rule of 11 NCAC 4 .0423 requires licensed producers to conduct business with honesty, integrity, and fair dealing toward applicants and clients. Conduct that undermines that standard — such as rebating to win business in violation of G.S. 58-33-85 or using the guaranty association in sales talks contrary to G.S. 58-62-86 — exposes the producer to license and civil penalty action by the Commissioner of Insurance.
Why the other options are wrong
- A) The ethical standards rule does not endorse commission maximization; rebating and other improper inducements are prohibited by G.S. 58-33-85.
- C) Ethical standards require fair dealing with the client, not blind loyalty to the insurer at the client's expense.
- D) Tailoring disclosure to profitability is deceptive conduct that the ethical standards rule and Article 63 prohibit.
Memory hook
Ethics rule in one word: honesty — everything else is a violation waiting to happen.