Free West Virginia Casualty practice questions

Answer: A. It is an unfair or deceptive practice, since omitting a material fact misrepresented the policy terms

West Virginia defines as an unfair or deceptive practice a sales presentation, statement or similar communication that, through an incorrect statement or the omission of a material fact, misrepresents a policy's terms, benefits, advantages or conditions. Leaving out the water damage limitation gave the buyer a false picture of the policy's terms, so accurate individual statements do not save the presentation. This part of the section does not depend on any aim of inducing the buyer to lapse or surrender another policy, which is a separate category. The section judges the presentation itself and contains no exception for a buyer who could have read the policy.

Answer: A. A valid license issued to the insurer by the West Virginia insurance commissioner

West Virginia's licensing statute for insurers forbids anyone to act as an insurer, and forbids any insurer to transact insurance in the state, without authority under a valid license from the commissioner. The only carve-out is for transactions the insurance chapter expressly provides for otherwise. A certificate of good standing from the insurer's home state is not the authority the section names. A corporate registration is likewise not what the section requires, because the authorization it names is the commissioner's license. Appointing a licensed producer does not stand in for the insurer's own license.

Answer: D. A concerted boycott tending to cause unreasonable restraint of insurance business

It is an unfair method of competition to agree to commit, or to commit through concerted action, a boycott, coercion, or intimidation that results in, or merely tends to result in, unreasonable restraint of the business of insurance. The agencies' joint refusal to place business is a boycott by agreement. Because conduct that only tends toward the restraint is enough, the section does not require proof that the insurer actually lost premium. Its text contains no requirement of a prior criminal conviction, and it does not depend on publicizing the agreement.

Answer: C. As a domestic insurer, because it was formed under the laws of West Virginia

West Virginia defines a domestic insurer by the law under which it was formed: an insurer formed under West Virginia law is domestic. Summit was formed under West Virginia law, so it is a domestic insurer. The definition looks only to the law of formation, so where its policyholders live and where its premium comes from do not change that classification, and neither does the share of its business done outside the state.

Answer: A. As far as federal constitutional law permits, to its maximum extent

W. Va. Code Ann. Sec. 33-2-4(a) gives the commissioner power to subpoena witnesses and require documents for any investigation or proceeding under the chapter, and it states that this power reaches outside the state as far as federal constitutional law allows. Stopping at the state line is wrong because the section expressly extends the power beyond West Virginia. A reciprocal compact and a prior circuit court order are both wrong because the section sets the outer limit by reference to federal constitutional law alone and names neither condition.

Answer: C. Whether the applicant committed an act the article lists as grounds for denial, suspension or revocation

Sec. 33-12-6(a)(2) requires the commissioner to find that the applicant has committed none of the acts that section twenty-four of the producer article treats as grounds for denial, suspension or revocation. The measure is that list of grounds. The application section sets no ten-year conviction window, calls for no character letter from an insurer, and does not require a resident applicant to have held a license in another state.

Answer: D. A motion within a year after the judgment is final to spread that share among the other liable parties

Sec. 55-7-13c(d) lets a plaintiff who cannot collect from a liable defendant despite good faith efforts move for reallocation of the uncollectible amount among the other parties found liable, no later than one year after the judgment becomes final through lapse of time for appeal or exhaustion of appeal, whichever is later. The court reallocates by percentages of fault, and it may include a plaintiff who was at fault. No remaining defendant can be made to absorb more than its percentage of fault times the uncollectible amount, and a defendant whose fault is equal to or less than the plaintiff's receives none of it, so the plaintiff cannot pick one defendant to pay the whole share. The remedy is reallocation under the several-liability structure, not conversion of the judgment to joint liability, and the time limit runs one year from finality rather than 30 days from the verdict.

Answer: D. Providing incomplete or materially untrue information in the license application.

W. Va. Code Ann. Sec. 33-12-24(b) lists the causes for which the commissioner may act against a producer license, including refusing to issue one. The first listed cause is giving incorrect, misleading, incomplete or materially untrue information in the license application. A misdemeanor conviction is listed only where it was in connection with the person's activities as an agent, solicitor or excess line broker, so any misdemeanor at all is too broad. The list does not include failing an earlier examination attempt; the examination-related cause is improperly using notes or other reference material to complete it. Letting a license lapse is not on the list.

Answer: C. Up to $10,000; if unpaid 30 days after notice, the license may be revoked or suspended

W. Va. Code Ann. Sec. 33-3-11(b) lets the Commissioner, by order, require an insurer to pay the State of West Virginia a penalty of up to $10,000 instead of refusing to renew, revoking or suspending its license, except where such action is mandatory. If the insurer fails to pay within 30 days after notice of the penalty, the Commissioner may then revoke or suspend the license. The subsection sets the cap at $10,000, not $5,000 or $25,000, and gives a 30-day window, not 60. It provides license action as the consequence of nonpayment, not an automatic doubling or a required lawsuit.

Answer: B. April 30, which is 30 days after the appeal time expired

W. Va. Code Ann. Sec. 33-3-11(a)(7) makes it a discretionary ground for license action if an insurer fails to pay a final West Virginia judgment within 30 days after the judgment became final or the time for appeal expired, whichever is later. Here the later event is the March 31 expiry of the appeal period, and 30 days after March 31 is April 30. March 31 counts from the earlier event, which the statute sets aside by choosing the later one. May 30 adds 60 days instead of 30, and March 1 allows no period at all.