Free West Virginia Life practice questions

Answer: B. A penalty of up to $10,000, with revocation or suspension available if it is unpaid 30 days after notice

In any case where refusing to renew, revoking or suspending the license is not mandatory, the commissioner may by order require the insurer to pay the State a penalty of no more than $10,000 instead. If the insurer fails to pay within 30 days after notice of the penalty, the commissioner may then revoke or suspend its license. The substitute penalty is unavailable where license action is mandatory, the cap is $10,000 rather than $1,000 or $50,000, and the section provides for no automatic doubling of an unpaid amount and no requirement to sue in circuit court.

Answer: B. 20 days

Under this section, once the commissioner has found after notice and hearing that a person is transacting insurance in an illegal, improper or unjust manner and has ordered it to stop, the person has 20 days after notice of the order to comply. If it fails or refuses to obey within that time, the commissioner may revoke any license the commissioner issued to it, and may also apply to the circuit court for an injunction, the appointment of a receiver, or both. The 10, 30 and 45 day figures are not the period this section sets for obeying the order.

Answer: C. The date, time and place at which the testimony will be taken

When a subpoena from the commissioner calls for testimony under oath, West Virginia law requires it to state the date, time and place where that testimony will be taken. The statute's list of required subpoena contents does not call for naming a presiding judge, listing earlier witnesses, or setting out oral questions in advance; a copy of questions is required only where the subpoena asks for answers to written interrogatories.

Answer: A. At least 100 persons, with an average of at least five persons per employer unit

For a trustee group, West Virginia requires the policy to cover, at its date of issue, at least one hundred persons and an average of no fewer than five persons per employer unit. The 25, 50 and 10 person figures all fall below the 100 person floor, and a two person average falls short of the five person average the section requires. The per-unit requirement is stated as an average across employer units, so a fixed count of ten in every unit misstates it.

Answer: A. The producer is personally liable on the contract as though the producer were the insurer.

West Virginia Code Sec. 33-12-20 makes an agent who takes part, directly or indirectly, in effecting a contract on a West Virginia subject with an insurer not licensed in the state personally liable on that contract, as if the agent were the insurer. The section imposes that liability by its own terms: it does not cap the exposure at a commission refund, it does not condition liability on proof of the agent's knowledge, and it does not wait for a license revocation. The section's stated exceptions are authorized reinsurance, excess line insurance procured under Article 12C, and ocean marine or marine protection and indemnity insurance, none of which applies to an ordinary life policy.

Answer: D. It can count, because violating another state's commissioner's subpoena is itself a listed cause

West Virginia Code Sec. 33-12-24(b)(2) lists as a cause for action on a producer license violating any insurance law, or violating a regulation, subpoena or order of the West Virginia Insurance Commissioner or of another state's Insurance Commissioner. Because the cause expressly reaches another state's commissioner, it is wrong to say only West Virginia subpoenas count. The subsection lists criminal convictions and out-of-state license actions as separate causes, so this ground stands on its own and needs neither a conviction nor a prior revocation in the other state.

Answer: C. About 150 new debtors join each year, and the policy lets the insurer require evidence of insurability if under 75 percent of new entrants enroll

A debtor group life policy may be issued only if the group is receiving new entrants at a rate of at least one hundred persons a year, or can reasonably be expected to receive at least one hundred new entrants in the first policy year, and only if the policy keeps for the insurer the right to require evidence of individual insurability when fewer than seventy-five percent of new entrants become insured. A group adding about 150 debtors a year with that reservation meets both conditions. A group adding about 40 a year, or expecting only about 60 in the first policy year, falls below the one hundred entrant requirement. A policy that gives up the insurer's right to require evidence of insurability fails the second condition even though its entrant flow is large enough.

Answer: D. Defamation, through false statements calculated to injure

West Virginia defines defamation as making or circulating, directly or indirectly, an oral or written statement or pamphlet about any person that is false or maliciously critical and is calculated to injure that person. A false pamphlet aimed at a rival's client base is that practice. Boycott, coercion and intimidation requires an agreement or concerted action tending toward unreasonable restraint of the insurance business, and one agent acting alone with a pamphlet is neither. Misrepresentation on an application concerns false statements made in applying for insurance, and unfair discrimination concerns differences in treatment of insureds of the same class.

Answer: B. It is prohibited, because it misstates policy provisions on coverages at issue

The statute lists misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue as an unfair claim settlement practice when committed with such frequency as to indicate a general business practice. Telling claimants that a covered procedure is excluded misstates the policy's provisions on the very coverage at issue, and the stem establishes the frequency. Each listed practice stands on its own, so no second failing, such as missing investigation standards, is needed. The statute is not confined to payment timing, and nothing in this provision waits on a proof of loss.

Answer: A. Read the law so as to carry out the purpose stated in its purpose section

The construction section is one sentence: the law is to be construed to effect the purpose set out in its purpose section, which is protecting covered persons when a member insurer is impaired or insolvent. That sentence names no other rule of interpretation, so it does not direct a court to favor member insurers, to read the law against owners, or to apply the law of the failed insurer's home state.