State RegulationsNC specificDifficulty 2/5
The North Carolina administrative rules impose ethical standards on licensed producers. Which producer practice would violate those standards?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under 11 NCAC 4 .0423, producers must observe ethical standards in solicitation, which prohibit misrepresentation and incomplete or misleading comparisons of policy terms. An incomplete comparison that hides disadvantages of the new policy to induce a lapse or surrender is also the statutory definition of twisting under G.S. 58-33-75, exposing the producer to civil penalties and license action. The compliant practices in the other options are exactly what honest solicitation and replacement rules encourage.
Why the other options are wrong
- B) Suitability-based recommendation is the ethical ideal, not a violation; the rules reward matching coverage to client needs.
- C) Leaving copies of sales materials with the applicant is an affirmative duty in replacement situations, not misconduct.
- D) Presenting and reading the signed replacement notice is a required producer duty under 11 NCAC 12 .0605, not an ethical breach.
Memory hook
Half the comparison is whole lot of twisting.