The North Carolina Commissioner of Insurance suspects improper conduct by a licensed producer and needs to examine business records and conduct a hearing. What authority supports these actions?

Why B is correct

Under Article 2 of Chapter 58 and administrative rules such as 11 NCAC 19 .0103, the Commissioner of Insurance holds independent investigative and hearing powers, including examining records and conducting hearings concerning licensees. The Commissioner acts administratively, so court involvement is not a precondition to an investigation of a licensed producer.

Why the other options are wrong

• A) A court subpoena is not a precondition; the Commissioner's investigative authority is administrative and self-contained.
• C) Hearings are the Commissioner's own function under Article 2; they are not transferred wholesale to an outside body.
• D) Licensed producers are squarely within the Commissioner's oversight — holding a license invites scrutiny, not exemption.

Memory hook

The Commissioner investigates and holds hearings on his own administrative authority.

Why B is correct

Article 2 of Chapter 58 and Rule 11 NCAC 19 .0103 vest the Commissioner of Insurance with broad investigative and hearing powers, including examining books and records, compelling the attendance of witnesses, and holding administrative hearings to enforce the insurance laws. These powers operate on the Commissioner's own initiative, which is what makes NCDOI oversight effective between legislative sessions.

Why the other options are wrong

• A) Investigations are an administrative function of the NCDOI; they are not delegated to grand juries.
• C) The Commissioner's tools are administrative - examination, hearings, orders, and penalties - not arrest, which is a law-enforcement function.
• D) The Commissioner may open an investigation on his or her own initiative; no prior court finding of a violation is required.

Memory hook

The Commissioner investigates, hears, and compels - no court permission needed to look.

Why B is correct

Under Article 2 of Chapter 58 and the administrative rules such as 11 NCAC 19 .0103, the Commissioner of Insurance holds broad investigative and hearing powers: the department may examine insurers' books and affairs, compel testimony and documents, and conduct administrative hearings, issuing orders such as cease-and-desist commands and license actions to enforce Chapter 58. Criminal incarceration, by contrast, is a judicial function.

Why the other options are wrong

• A) Rate actions are subject to statutory procedures and hearing rights; the Commissioner cannot impose final rates on every line without process.
• C) The Commissioner is an administrative regulator; imprisonment for violations is imposed by the courts, not by the department.
• D) Fee collection is a minor part of the role; the Commissioner's core authority includes examination, investigation, hearings, and enforcement orders.

Memory hook

The Commissioner investigates, hears, and orders - only courts jail.