Sorry, but that is incorrect. UF is rated for INDOOR use pretty much everywhere NM is permitted. NM cable doesn't typically have separate insulation on the ground wire either.
Here's the LAW in North Carolina (2014 National Electrical Code):
340.10 Uses Permitted
Type UF cable shall be permitted as follows:
(1) For use underground, including direct burial in the earth.
For underground requirements, see 300.5.
(2) As single-conductor cables. Where installed assingleconductor
cables, all conductors of the feeder grounded
conductor or branch circuit, includingthe grounded
conductor and equipment grounding conductor, if any,shall be installed in accordance with 300.3 .
(3) For wiring in wet, dry, or corrosive locations under therecognized wiring methods of this Code .
(4) Installed as nonmetallic-sheathed cable. Where so installed,the installation and conductor requirements shall complywith Parts II and III of Article 334 and shall be of themulticonductor type.If Type UF cable is installed as nonmetallic-sheathed cable, theinstallation and construction requirements of Article 334 forType NM cable apply, including the ampacity adjustment in 334.80.
(5) For solar photovoltaic systems in accordance with 690.31 .
(6) As single-conductor cables as the nonheating leads forheating cables as provided in 424.43 .
(7) Supported by cable trays. Type UF cable supported bycable trays shall be of the multiconductor type.
Article 334 covers NM cable.