An applicant in North Carolina knowingly makes a false and fraudulent statement in an insurance application in order to obtain a policy. What is the criminal classification of this conduct?

Why C is correct

Under G.S. 58-33-105, a producer, examining physician, applicant, or any other person who knowingly or willfully makes a false or fraudulent statement in an insurance application, or to obtain a fee, commission, or benefit, commits a Class 1 misdemeanor.

Why the other options are wrong

• A) The general false pretenses statute is the vehicle for broader insurance fraud schemes; the specific offense for false application statements is the Class 1 misdemeanor under the licensing article.
• B) A Class I felony applies to willful false statements in required statements made under oath, not to statements in insurance applications.
• D) The conduct is expressly criminal; it is not merely a civil violation.

Memory hook

Fibbing on the application: Class 1 misdemeanor.

Why B is correct

G.S. 58-33-105 makes it a Class 1 misdemeanor for a producer, the examining physician, the applicant, or any other person to knowingly and willfully make a false or fraudulent statement in an insurance application, or to make such a statement to obtain a fee, commission, or benefit. Note the contrast with G.S. 58-2-180, where willfully false sworn financial statements are a Class I felony for the individual and a $2,000 to $10,000 fine for the entity.

Why the other options are wrong

• A) Class I felony treatment is reserved under G.S. 58-2-180 for willfully false statements made under oath or subscription in required filings — not ordinary application misstatements, which are Class 1 misdemeanors.
• C) G.S. 58-33-105 is a criminal provision, so the conduct is not merely a civil matter punishable by a $100 to $1,000 administrative penalty.
• D) The statute expressly creates criminal misdemeanor exposure; calling it a non-criminal unfair trade practice misreads G.S. 58-33-105.

Memory hook

Lie on an application — Class 1 misdemeanor, whichever side of the form you're on.