Free Virginia Property & Casualty practice questions

Answer: C. When it is done often enough to indicate a general business practice

Section 38.2-510(A) prohibits the listed acts when they are committed or performed "with such frequency as to indicate a general business practice." The test is frequency, so an isolated act on one claim is not what subsection A describes. The subsection does not make a prior written complaint or a court finding of liability a condition of the prohibition.

Answer: A. License penalties, up to revocation, after notice and a chance to be heard

Section 38.2-1809(A) lets the Commission examine the business affairs and records of anyone engaged in insurance in Virginia, and it names agents expressly. A licensee who refuses to permit an examination by the Commission or its employees, including Bureau of Insurance employees, may face the penalties that apply to licensees, including denial, suspension or revocation of the license, after notice and an opportunity to be heard. Agents are covered, the penalty follows notice and a hearing opportunity rather than arriving automatically, and the subsection provides Commission penalties, not an insurer referral.

Answer: B. When it causes or tends to cause unreasonable restraint of insurance trade

Section 38.2-505 prohibits agreeing to commit, or committing through concerted action, a boycott, coercion or intimidation that causes, or has a tendency to cause, an unreasonable restraint of the insurance business or a monopoly in it. Because a tendency is enough, the conduct need not actually produce a monopoly or drive an insurer out of business. The section covers any agreement or concerted action and says nothing requiring the agreement to be written or signed.

Answer: B. 18 years of age

Subsection A entitles an applicant to a license when the applicant is at least 18, has satisfied the Commission of good character and a good reputation for honesty, and has complied with the article's other requirements. The statutory minimum is 18, so 16 is too young, and 19 and 21 overstate the requirement.

Answer: B. Whether it has used unfair competition or unfair or deceptive practices

Section 38.2-515(A) gives the Commission power to examine and investigate each person subject to the unfair trade practices chapter to find out whether that person is using, or has used, an unfair method of competition or an unfair or deceptive act or practice that the chapter bans. Rate adequacy, continuing education and advertising budgets are not the purpose this subsection states.

Answer: B. It is prohibited, because the term is not plainly expressed in the contract issued

Section 38.2-509(A)(1) bars any person from knowingly permitting, offering or making an insurance agreement whose terms are not plainly expressed in the contract that is issued. A promised coverage extension missing from the issued policy is that kind of agreement. Recording the promise in an agency letter, leaving the premium unchanged, or getting an underwriter's phone approval does not put the term in the issued contract, so none of them cures the problem.

Answer: A. He must be fingerprinted for a state and national criminal history check

Subsection B requires every individual Virginia resident applying for a new license to be fingerprinted at the time of application. The prints, together with personal descriptive information, are routed through the Central Criminal Records Exchange to the FBI, and the results of the state and national search go to the Commissioner or a designee. The requirement attaches to resident applicants when they apply, so it is not limited to nonresidents, deferred to renewal, or triggered only by a reported felony.

Answer: C. At least once each month

Subsection A requires licensing examinations to be held at least monthly, with the Commission setting the times and places. A weekly schedule is not what the statute demands, and a quarterly or twice-yearly schedule would fall short of the monthly minimum.

Answer: B. It may suspend or revoke the license in addition to, or in place of, a monetary penalty

Va. Code Ann. Sec. 38.2-1831 lets the Commission place a license on probation, suspend it, revoke it, or refuse to issue or renew it for any listed cause, and it may do so "in addition to or in lieu of" a penalty under Sec. 38.2-218. Engaging in the practice of rebating is one of the listed causes. Because license action may be added to a penalty, both can be imposed for the same conduct, and because it may replace a penalty, no penalty has to come first. A felony conviction is a separate listed cause, not a precondition for acting on rebating.

Answer: D. Report it within 30 calendar days, to the Commission and to each appointing insurer

Va. Code Ann. Sec. 38.2-1826(A) requires each licensed agent to report a change in residence address, email address or name within 30 calendar days, and the report goes both to the Commission and to every insurer that has appointed the agent. The duty to tell the insurers rests on the agent, so reporting to the Commission alone falls short, and reporting only to the insurers leaves out the Commission. The 10-day and 60-day periods are not the period this subsection sets.