Under 11 NCAC 4 .0423, North Carolina's ethical standards for producers require that a producer:

Why C is correct

Under 11 NCAC 4 .0423, North Carolina's ethical standards require producers to deal honestly and in good faith with clients and applicants, avoiding misrepresentation, concealment, and self-dealing. The standard operates alongside the unfair-trade-practice rules (such as the rebating ban in G.S. 58-33-85) and supports license discipline for producers who put commissions ahead of client interests.

Why the other options are wrong

• A) Steering clients to whichever product pays the producer the highest commission breaches the good-faith standard.
• B) State privacy law restricts the disclosure of an applicant's personal information; it may not be shared freely.
• D) Rebating is prohibited under G.S. 58-33-85 and cannot be justified as a courtesy.

Memory hook

Good faith first — commissions never outrank the client.

Why D is correct

Under the ethical standards rule, 11 NCAC 4 .0423, a North Carolina producer is expected to act with honesty and integrity and to deal fairly with both the client and the insurer. The producer occupies a position of trust, so the rule requires balanced judgment rather than self-dealing, disclosure breaches, or unsupported promises about future results.

Why the other options are wrong

• A is wrong because placing business based on the producer's commission rather than the client's needs is a conflict of interest, not ethical conduct.
• B is wrong because disclosing one client's confidential information to another violates the duty of confidentiality.
• C is wrong because guaranteeing future dividends or policy performance is a misrepresentation; dividends and results are not guaranteed.

Memory hook

Ethics rule in one line: honest, fair, and balanced between client and insurer.