I am very glad for all the help I've received from the generous members of this forum.
I have a model provided to me by an artist which I am in the process of converting for iClone with 3dXchange. It is a very basic female character wearing a shirt and skirt. When applying test movements in 3dXchange, her legs show through her skirt. Before going back to the artist, I was wondering of there are some adjustments I can make. 
Thanks very much.

Are you using physics?
It may be the artist didn't weight the skirt carefully enough, or it may be a physics settings issue.

As I'm new to this world of 3D and iClone/3dXchange, I did a quick look at Physics within iClone, but am not clear on what I can do to determine if that is what's needed to adjust. I will seek out tutorials on the subject - thank you. 

I suspect your artist didn't weight the dress to the bones very well. Physics is not on by default.
Does the dress move with characters legs when you add an animation?

Yes - the dress moves, but I can see skin poke through at the hips. With certain movements the skirt opens up completely.

Couple ideas:

The easiest is probably to create an opacity map for the body that hides the the skin under the clothing where it shows through. Export the UV map (or diffuse is fine) and make black areas wherever you want the skin hidden. Make the rest of the map white. Load it in the opacity channel of the skin in iClone.

The other would be to have your artist adjust the model a little bit.

rampa, thanks so much for taking your time to help with this. I will contact the artist and send him images so he can see what is happening. Thanks again.