General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
The federal statute at 18 USC Section 1033 is intended to:
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
18 USC Section 1033 prohibits individuals convicted of felonies involving dishonesty or breach of trust from engaging in the insurance business without the permission of a state insurance regulator; Section 1034 provides penalties for violations. It complements state licensing by adding a federal criminal bar, protecting policyholders from persons whose criminal histories indicate they cannot be trusted in the industry. State and federal requirements operate together.
Why the other options are wrong
- A) 18 USC 1033 creates a criminal bar, not a federal licensing examination requirement.
- C) Medicare supplement sales are regulated by CMS rules and state law, not by Section 1033.
- D) The statute supplements, rather than replaces, state licensing.
Memory hook
Federal bouncer: convicted of a dishonesty felony? You are out of the insurance business.