State RegulationsNC specificDifficulty 2/5
A producer makes statements misrepresenting the terms of a competitor's policies to induce policyholders to switch. Under Article 63 of Chapter 58, which characterization is correct?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under G.S. 58-63-15, unfair methods of competition and unfair or deceptive acts in the business of insurance are prohibited, and G.S. 58-63-20 separately addresses false information and advertising. The Commissioner may investigate and issue cease-and-desist orders under G.S. 58-63-32, and penalties follow through the applicable penalty provisions, so these practices carry real administrative consequences.
Why the other options are wrong
- B) Article 63 violations are actively enforceable through the Commissioner's cease-and-desist powers and penalties; they are not merely discouraged.
- C) The Commissioner holds primary administrative enforcement authority under G.S. 58-63-32; enforcement is not left solely to insureds.
- D) Article 63 reaches both insurers and producers, and comparable twisting rules in G.S. 58-33-75 apply directly to licensees.
Memory hook
Article 63 names the dirty tricks; the Commissioner's cease-and-desist enforces them.