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Free Practice Questions for North Carolina Surplus Lines

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ArticleFree Surplus Lines Insurance Practice Test by State 2026: 2,300+ Questions22 min read
Exam Review

Key Facts: North Carolina Surplus Lines Exam

65-75%

First-Time Pass Rate

Industry Data

70 (scaled)

Passing Score

Pearson VUE

~50

Exam Questions

Pearson VUE

1 hour

Exam Duration

Pearson VUE

$64

Exam Fee

Pearson VUE

Property Required

Prerequisite

NCDOI

North Carolina requires surplus lines brokers to pass a Pearson VUE exam and join the NC Surplus Lines Association. Candidates must hold an active Property license and demonstrate knowledge of E&S markets, diligent search, the 5% premium tax, and NC coastal property surplus lines practices.

Sample North Carolina Surplus Lines Practice Questions

Try these sample questions to review concepts for the North Carolina Surplus Lines exam. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1What is a surplus lines broker in North Carolina?
A.An agent who sells standard admitted insurance
B.A licensed intermediary who places coverage with non-admitted insurers when coverage is unavailable in the admitted market
C.A claims adjuster specializing in excess coverage
D.A reinsurance broker
Explanation: A surplus lines broker in North Carolina is a specially licensed intermediary authorized to place insurance with non-admitted (surplus lines) insurers when the needed coverage cannot be obtained from admitted carriers. NC requires a separate surplus lines license beyond the standard Property license.
2What prerequisite license must a North Carolina surplus lines broker hold?
A.Life insurance license
B.Health insurance license
C.Active Property license
D.No prerequisite required
Explanation: North Carolina requires surplus lines brokers to hold an active Property insurance license as a prerequisite. Note that NC specifically requires the Property license (not a combined P&C), ensuring brokers have foundational knowledge of property insurance before placing coverage in the non-admitted market.
3Which testing vendor administers the North Carolina surplus lines broker exam?
A.Prometric
B.PSI
C.Pearson VUE
D.Castle Worldwide
Explanation: Pearson VUE administers the North Carolina surplus lines broker licensing exam. Candidates must register through Pearson VUE to schedule their exam at an authorized testing center. The exam fee is approximately $64.
4What is the passing score for the North Carolina surplus lines broker exam?
A.60%
B.65%
C.70 (scaled score)
D.75%
Explanation: The North Carolina surplus lines broker exam requires a minimum passing score of 70 on a scaled score basis. Scaled scoring adjusts for slight variations in exam difficulty across different test forms to ensure fairness.
5What unique post-licensing requirement exists for North Carolina surplus lines brokers?
A.No post-licensing requirements
B.Licensed brokers must join the NC Surplus Lines Association after obtaining their license
C.Brokers must complete 100 hours of additional training
D.Brokers must post a $1 million bond
Explanation: North Carolina has a unique requirement that licensed surplus lines brokers must join the NC Surplus Lines Association after obtaining their license. This membership facilitates compliance, tax reporting, and industry communication specific to NC surplus lines operations.
6What is the NC Surplus Lines Association?
A.A state government agency
B.An industry organization that NC surplus lines brokers must join, which assists with compliance, tax collection, and filing requirements
C.A surplus lines insurer
D.A consumer advocacy group
Explanation: The NC Surplus Lines Association is an industry organization that all licensed NC surplus lines brokers are required to join. It serves as a stamping office, processes surplus lines filings, assists with tax collection and remittance, and provides resources for regulatory compliance.
7What is the surplus lines premium tax rate in North Carolina?
A.3%
B.5%
C.5% plus additional county fire tax
D.8%
Explanation: North Carolina imposes a 5% premium tax on surplus lines transactions. The surplus lines broker is responsible for collecting this tax and remitting it through the NC Surplus Lines Association. Additional fire taxes may apply depending on the type of coverage.
8Who is responsible for collecting and remitting surplus lines taxes in North Carolina?
A.The insured
B.The non-admitted insurer
C.The surplus lines broker, through the NC Surplus Lines Association
D.The NC Department of Insurance directly
Explanation: In North Carolina, the surplus lines broker is responsible for collecting the surplus lines premium tax from the insured and remitting it through the NC Surplus Lines Association. The Association acts as an intermediary, processing tax filings and remitting to the state.
9Which state department regulates surplus lines insurance in North Carolina?
A.NC Department of Commerce
B.NC Department of Banking
C.NC Department of Insurance (NCDOI)
D.NC Secretary of State
Explanation: The North Carolina Department of Insurance (NCDOI) regulates surplus lines insurance in the state. NCDOI oversees surplus lines broker licensing, maintains the eligible insurer list, enforces compliance with state laws, and works with the NC Surplus Lines Association.
10What is a diligent search in North Carolina surplus lines?
A.A background check on the insured
B.A documented effort to obtain coverage from admitted insurers before placing with a non-admitted carrier
C.A search for the cheapest premium
D.An investigation of claims history
Explanation: North Carolina requires surplus lines brokers to conduct a diligent search, documenting their good-faith effort to obtain coverage from admitted insurers before placing with a non-admitted carrier. This protects consumers by ensuring surplus lines is used only when admitted coverage is genuinely unavailable.

About the North Carolina Surplus Lines Exam

The North Carolina surplus lines broker exam covers E&S markets, NCDOI regulations, diligent search requirements, non-admitted insurer eligibility, surplus lines taxation, NRRA provisions, and NC-specific requirements including mandatory membership in the NC Surplus Lines Association.

Exam sponsor: Pearson VUE. The requirements and fees below concern the certification or admission exam, separate from our free practice resources.

Questions

50 questions

Time Limit

1 hour

Passing Score

70 (scaled)

Exam / Certification Fees

$64

Exam sponsor website

Reported exam pass rate: 65-75%. first-attempt pass rate This describes exam candidates, not OpenExamPrep users or results from using our resources. Exam sponsor website

Fees, eligibility, and exam policies can change. Confirm them with the exam sponsor before applying or paying.

Our practice resources: topics covered

We aim to reflect publicly available exam outlines and topic information in our study resources. Coverage, format, and difficulty may differ from the actual exam, and we cannot guarantee that every detail is accurate or current. Confirm exam requirements, fees, and policies with the official exam sponsor.

30%

Surplus Lines Markets

Lloyd's of London, London market, alien insurers, wholesale brokers, MGAs, market cycles, and E&S industry structure

25%

North Carolina Surplus Lines Law

NCDOI regulations, Property license prerequisite, mandatory NC Surplus Lines Association membership, disclosure obligations, and penalties

20%

Diligent Search & Eligibility

Diligent search process, declination documentation, eligible insurer financial requirements, export lists, NC Beach Plan interaction

25%

Taxation & Compliance

NC 5% premium tax, Association tax processing, NRRA home-state taxation, recordkeeping, and filing obligations

Preparing for the North Carolina Surplus Lines Exam

What You Need to Know

  • Passing score: 70 (scaled)
  • Exam length: 50 questions
  • Time limit: 1 hour
  • Exam / certification fees: $64 Official sources

Using Our Practice Resources

  • Work through all 100 available questions
  • Review every answer and explanation
  • Track weak areas and revisit them
  • Use our AI tutor for tough concepts

North Carolina Surplus Lines: Suggested Study Strategy

1Understand the mandatory NC Surplus Lines Association membership requirement — this is unique to NC
2Know NC's 5% surplus lines premium tax and Association filing procedures
3Study the NC Property license prerequisite and how it differs from other states requiring P&C
4Master the diligent search process and understand the NC Beach Plan as an alternative for coastal risks
5Learn the NRRA home-state taxation provisions and how they affect multi-state NC placements
6Review the financial requirements for non-admitted insurers to be eligible in North Carolina

Frequently Asked Questions

What does the North Carolina surplus lines broker exam cover?

The exam covers surplus lines markets, NCDOI regulations, diligent search, non-admitted insurer eligibility, the 5% premium tax, NRRA provisions, and NC-specific requirements including mandatory NC Surplus Lines Association membership.

What license do I need before taking the NC surplus lines exam?

You must hold an active North Carolina Property insurance license. Note that NC specifically requires the Property license, not just a general P&C license.

Do I have to join the NC Surplus Lines Association?

Yes. North Carolina uniquely requires all licensed surplus lines brokers to join the NC Surplus Lines Association after obtaining their license. This is mandatory, not optional.

What is the passing score for the NC surplus lines exam?

You need a scaled score of 70 or higher to pass the Pearson VUE exam. The scaled scoring adjusts for variations in exam difficulty across test forms.

What is the surplus lines premium tax rate in North Carolina?

North Carolina imposes a 5% premium tax on surplus lines transactions. The broker collects this and remits it through the NC Surplus Lines Association.

How long do I have to complete the NC surplus lines exam?

You have approximately 1 hour to complete the exam, which includes approximately 50 scored questions plus pretest questions that do not count toward your score.