North Carolina Life & Health Insurance Exam — Study Guide

The national chapters covered how life insurance, annuities, and health coverage work everywhere. This chapter covers what North Carolina adds: who regulates you, how you get and keep a license, what you may and may not say when you sell, what must be in the policy, and what protects a policyholder when an insurer fails.

Learn the rule, then the number. North Carolina's rules are stable — the state has a Department of Insurance headed by an elected Commissioner, a producer licensing statute, an Unfair Trade Practices Act, a replacement regulation for life and annuities, a free-look requirement, a guaranty association, and an annuity best-interest rule. The numbers attached to those rules — hours, fees, days, dollar caps — are what changes. Every number below is flagged; verify flagged figures with the North Carolina Department of Insurance (NCDOI, ncdoi.gov) or the current text of Chapter 58 at ncleg.gov.

One recent change to know. Session Law 2025-45, effective October 1, 2025, repealed the prelicensing education mandate in G.S. 58-33-30(d). The statute now says the Commissioner "shall not require an individual who applies for an insurance producer license in this State to complete any specific amount of instruction or any specific course of instruction." Materials still describing a fixed North Carolina classroom-hour requirement predate that change.

1. The Department of Insurance and the Commissioner

The North Carolina Department of Insurance is established by G.S. 58-2-1. Its chief officer is the Commissioner of Insurance (G.S. 58-2-5):

• The Commissioner is elected by the people of North Carolina, in the same manner as other State officers — not appointed by the Governor.
• The term is four years, beginning the first day of January after the election.
• A mid-term vacancy is filled by the Governor for the unexpired term.

Powers. G.S. 58-2-40 authorizes the Commissioner to supervise the business of insurance, adopt rules to enforce Chapter 58, and see that its provisions are executed. Rules are adopted under Chapter 150B and published in Title 11 of the Administrative Code; 11 NCAC 12 (Life and Health Division) is the chapter cited throughout this supplement.

Examinations and investigations. G.S. 58-2-50 authorizes examinations, hearings, and investigations, and G.S. 58-2-131 through 58-2-134 govern examinations of insurers — scope, scheduling, reports, and cost recovery. Under the Unfair Trade Practices Act, G.S. 58-63-20 lets the Commissioner examine and investigate every person engaged in the business of insurance in the state, which reaches producers, not just carriers.

Enforcement ladder. (1) License action — probation, suspension, revocation, or refusal to renew under G.S. 58-33-46, through the contested-case process in Article 3A of Chapter 150B. (2) Civil penalties under G.S. 58-2-70 after notice and hearing; the statute sets a per-violation dollar range (verify current amounts), each day a violation continues is a separate violation, and the Commissioner weighs harm caused, money gained, willfulness, and prior record. (3) Restitution ordered by the Superior Court of Wake County on the Commissioner's petition. (4) Cease and desist orders (G.S. 58-63-32) and restraining orders (G.S. 58-2-60). (5) Criminal referral — for example, false statement to procure or deny an insurance benefit (G.S. 58-2-161) or embezzlement by producers (G.S. 58-2-162). Commissioner orders are reviewable in Wake County Superior Court within a short statutory window (G.S. 58-2-75 — verify).

The Department also runs the Seniors' Health Insurance Information Program (SHIIP) under G.S. 58-2-31 — free counseling on Medicare, Medicare supplement, and long-term care questions.

2. Producer licensing

The prohibition. G.S. 58-33-5 requires a license to sell, solicit, or negotiate insurance in North Carolina. Definitions are in G.S. 58-33-10; lines of authority in G.S. 58-33-26(c1), of which life and accident and health or sickness matter here (variable products additionally require federal securities registration).

Application and fees. File under G.S. 58-33-31 with the fees in G.S. 58-33-125 — verify current license, examination, and appointment fees.

Prelicensing education. Repealed by S.L. 2025-45 effective October 1, 2025 (above). Verify with NCDOI — insurers may still impose their own training as a condition of appointment.

Examination. Not repealed. G.S. 58-33-30(e) requires each producer applicant to take and pass a competency examination prescribed by the Commissioner, covering the terms and provisions of the policies the applicant proposes to sell, the duties and responsibilities of the license, and the current laws of this State applicable to the license. Applicants who fail, or fail to appear, must reapply and pay again.

Supplemental senior-product examination. Distinctly North Carolina: before a resident may sell Medicare supplement or long-term care policies (Articles 54 and 55), the resident must pass a supplemental written examination prescribed by the Commissioner, in addition to holding the underlying line of authority (G.S. 58-33-30(e)(6)).

Background check. Criminal history record checks, including fingerprinting, under G.S. 58-33-48.

Re-examination as discipline. If a licensee is found guilty of a Chapter 58 violation, the Commissioner may require re-examination; failure means revocation of all licenses in that person's name (G.S. 58-33-30(e)(2)).

Nonresident. G.S. 58-33-32 is the reciprocity provision — a nonresident in good standing whose home state reciprocates may generally be licensed without another North Carolina examination. A licensee who stops being a North Carolina resident must deliver the license to the Commissioner within a statutory period (G.S. 58-33-50(c) — verify the days).

Temporary. G.S. 58-33-66 permits a temporary producer license without examination for a limited period (verify the maximum) where needed to service an existing business, in four circumstances: to the spouse, surviving spouse, court-appointed personal representative, or guardian of a producer who dies or becomes disabled; to a member or employee of a licensed business entity on the death or disability of a designated individual; to the designee of a producer entering active military service; or where the Commissioner finds the public interest is best served. The Commissioner may limit the authority, require a sponsor who assumes responsibility for the temporary licensee's acts, and revoke it if the public is endangered. It ends on transfer of the business, and a temporary licensee acting because of death or disability may represent only insurers that had appointed the original producer.

Grounds for denial, probation, suspension, revocation, or nonrenewal — G.S. 58-33-46(a). Materially incorrect or untrue information in the application; violating any insurance law, rule, subpoena, or order of this or another state's regulator, or any FINRA rule; obtaining a license by misrepresentation or fraud; improperly withholding, misappropriating, or converting money or property received in the insurance business; intentionally misrepresenting contract terms; conviction of a felony or a misdemeanor involving dishonesty or breach of trust; fraudulent, coercive, or dishonest practices, or incompetence, untrustworthiness, or financial irresponsibility; license action in another state; forgery; cheating on a licensing examination; knowingly accepting business from an unlicensed person; noncompliance with a child-support or state tax order. Denial has its own track under G.S. 58-33-30 — written notice with grounds, a written demand for review, then a written demand for hearing under Article 3A of Chapter 150B (verify both deadlines). A producer who transacts for an unauthorized insurer is personally liable on the contracts (G.S. 58-33-95).

Appointment by insurers

A license alone does not let you write business. Under G.S. 58-33-40 a producer may not act as agent for an insurer that has not appointed the producer.

• The insurer files a notice of appointment within a statutory window after the date the first insurance application is submitted — North Carolina allows the first application to precede the appointment filing (verify the days).
• Authority is limited to lines the insurer is authorized to write and the producer is licensed for; each line is a separate appointment.
• The insurer pays the appointment fee and remits renewal appointment fees annually by a statutory date (verify).
• An appointment continues while the producer stays licensed and the insurer authorized, unless cancelled; since a 2024 amendment, either the insurer or the producer may submit the cancellation notice.

Termination reporting — G.S. 58-33-56. An insurer terminating a producer's appointment or contract must notify the Commissioner on the prescribed form within a statutory window, both for terminations tied to the G.S. 58-33-46(a) causes and for terminations for any other reason (verify the windows). The insurer then notifies the producer; for-cause notices go by certified mail, return receipt requested, or overnight carrier. The producer may file written comments with the Commissioner, copied to the insurer; they become part of the file and travel with every copy of the report. Absent actual malice, reporting parties have immunity.

3. Continuing education

Statutory frame — G.S. 58-33-130. The Commissioner may adopt CE rules covering course content, sponsor and program accreditation, credit computation, exemptions, compliance procedures, and sanctions. Subsection (d) sets the outer bound: biennial hours are set by the Commissioner but may not exceed a statutory maximum, and the Commissioner may run a staggered compliance system based on the licensee's month and year of birth. North Carolina uses that birth-month system.

Current practice. NCDOI publishes the operative requirement: a set number of CE hours on a two-year cycle including a mandatory ethics component, with the compliance date keyed to birth month and odd/even birth year. Long-term care sales require an initial LTC course before selling and a shorter refresher each period; annuity sales require the training in section 7. Verify current CE hours, ethics hours, LTC training hours, and annuity training hours with the North Carolina Department of Insurance.

Failure to comply. The license lapses. G.S. 58-33-130(c) lets the Commissioner or CE administrator grant an extension for good cause or charge an administrative fee in lieu of lapse (verify the amount). NCDOI describes a limited make-up window plus a reinstatement fee; if the hours are never completed the license goes inactive and the person must qualify again by examination.

No renewal date. North Carolina resident producer licenses in these lines are continuous — valid until surrendered, cancelled, or revoked — with CE compliance, not a renewal application, keeping the license alive. Verify current mechanics with NCDOI.

4. Marketing and sales conduct: the Unfair Trade Practices Act

North Carolina has an Unfair Trade Practices Act for insurance: Article 63 of Chapter 58. G.S. 58-63-1 states its purpose; G.S. 58-63-10 makes it unlawful for any person to engage in any trade practice the Article defines as an unfair method of competition or an unfair or deceptive act.

G.S. 58-63-15 is the definitional list:

• Misrepresentation and false advertising of policy contracts — misstating terms, benefits, dividends, or surplus; misrepresenting an insurer's financial condition or reserve system; using a policy name that misrepresents its nature; or misrepresenting anything to a policyholder to induce the policyholder to lapse, forfeit, or surrender insurance (the hook for churning-type conduct).
• False information and advertising generally — untrue, deceptive, or misleading statements about the business of insurance, in any medium.
• Defamation — false or maliciously critical statements about an insurer's financial condition calculated to injure someone in the insurance business.
• Boycott, coercion, and intimidation — concerted acts tending to restrain or monopolize the business of insurance.
• False financial statements and false entries in an insurer's books with intent to deceive.
• Stock operations and advisory board contracts — securities or profit promises as an inducement to insurance.
• Unfair discrimination — between individuals of the same class and equal expectation of life in life and annuity rates, dividends, benefits, or terms; and of the same class and essentially the same hazard in accident and health premiums, rates, benefits, or terms.
• Rebates — knowingly giving or offering, directly or indirectly, any rebate of premium, special favor, dividend advantage, or valuable consideration not specified in the contract, as an inducement. Expressly not rebating: fair and equitable policyholder bonuses or premium abatements out of surplus from nonparticipating business, and specified industrial-debit allowances.
• Unfair claim settlement practices — section 5.

Producer-specific statutes in Article 33:

• Twisting — G.S. 58-33-75. No licensee may make any written or oral statement that willfully misrepresents or willfully makes an incomplete comparison of the terms, conditions, or benefits of any policy, to induce a policyholder to terminate, surrender, exchange, or convert a policy. Violators face civil penalties (G.S. 58-2-70) and license action (G.S. 58-33-46).
• Rebating — G.S. 58-33-85. No insurer, producer, or limited representative may charge a premium other than per the approved filing, or give or offer any rebate, discount, abatement, credit, premium reduction, special favor, dividend advantage, or valuable consideration not specified in the policy. The ban is two-sided — the insured may not knowingly accept a rebate either. Commissions to licensed producers and dividend distributions by participating insurers are not rebates. A producer may not charge a fee in addition to premium for processing or services associated with the contract unless the applicant consents in writing before the services are rendered.
• Churning has no separately captioned North Carolina statute; it is reached through G.S. 58-63-15(1), the twisting statute, and the replacement regulation, which creates the paper trail that exposes it.
• Commissions — G.S. 58-33-82. No one may pay, and no one may accept, a commission, service fee, brokerage, or other valuable consideration for selling, soliciting, or negotiating insurance in North Carolina if that person was required to be licensed and was not. Renewal and deferred commissions may still be paid to someone who was licensed at the time of sale. Commissions may be assigned to a business entity the producer owns or works for, and split on exchanged business where both producers are licensed and appointed (G.S. 58-33-82.1). A referral fee to an unlicensed individual is capped, with a per-violation fine (verify both).
• Value-added products and services — G.S. 58-63-16 permits products or services offered in connection with the marketing, purchase, or retention of a contract within an aggregate annual retail value per person, plus certain no-fee or reduced-fee servicing and risk-control services offered on the same terms to all eligible customers, disclosed in writing and not contingent on purchase. Repealed effective January 1, 2027, with the permitted practices moving into G.S. 58-63-15(8)b. Verify the current threshold and operative statute.

Advertising. 11 NCAC 12 contains life and accident-and-health advertising rules, including filing of advertising subject to review a set number of days before use, with authority to order material withdrawn (verify the lead time). And no one may use the guaranty association as a sales inducement (G.S. 58-62-86).