West Virginia Property and Casualty Licensing Practice Exam

Which of the following actions is typically a violation that might incur penalties for a licensee?

1. Providing excessive coverage options

2. Advertising without a license

3. Properly reporting claims

4. Engaging clients ethically

The correct answer is: Advertising without a license

Advertising without a license is a violation because it directly contravenes the regulations governing the licensing of insurance agents and brokers. In most jurisdictions, including West Virginia, individuals or entities must hold a valid license to engage in the business of insurance, which includes advertising their services. Failing to obtain the necessary license before advertising can lead to penalties such as fines, suspension, or revocation of the license, as it demonstrates a lack of compliance with state laws. In contrast, providing excessive coverage options is typically considered an aspect of customer service rather than a violation. Properly reporting claims is an essential responsibility of licensees and not a violation, and engaging clients ethically reflects adherence to professional standards rather than misconduct. Thus, only advertising without a license is recognized as a clear violation that could result in penalties.