Under 18 U.S.C. Section 1033, persons convicted of which category of felony are barred from the insurance business unless a regulator grants written consent?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Section 1033 of Title 18 of the United States Code bars any person convicted of a felony involving dishonesty or a breach of trust from participating in the business of insurance, unless a state insurance regulator grants prior written consent. The statute targets crimes that call a person's honesty into question, because insurance is a fiduciary business built on trust and the handling of policyholder funds. Section 1034 adds criminal penalties for violating the ban. Consent, where it is ever granted, is the narrow exception rather than the rule, and it must come in writing from the regulator before the person engages in insurance activities. The ban applies to both direct participation and related roles in the insurance industry.
Why the other options are wrong
- B) Traffic violations are not felonies involving dishonesty or a breach of trust, so they do not trigger the Section 1033 ban. The statute is aimed at qualifying felonies that call a person's honesty into question, not at minor or unrelated offenses.
- C) Misdemeanor drug possession is not the type of conviction the statute addresses. Section 1033 applies only to felonies involving dishonesty or a breach of trust, so a misdemeanor conviction falls outside its scope.
- D) A civil antitrust violation is not a felony conviction and does not activate Section 1033. The statute requires a conviction of a felony involving dishonesty or a breach of trust, and civil adjudications are not felony convictions.
Memory hook
A dishonesty felony needs the regulator's written consent before insurance work.