The Office of General Counsel issued the following informal opinion on July 14, 2000, representing the position of the New York State Insurance Department.
RE: Effect of Conviction for Vehicular Manslaughter on Agent Licensing
Is there a law that would prevent a person convicted of vehicular manslaughter from obtaining a property and casualty insurance agents license?
N.Y. Ins. Law § 2103(e)(2) and (h)(McKinney 1985 & Supp. 2000) provide that the agent to be appointed and/or licensed must be trustworthy and competent in the judgments of both the appointing insurer and the superintendent.
The vehicular manslaughter crimes, which are felonies, require that the defendant act with criminal negligence and cause death by operation of a motor vehicle, snowmobile, all terrain vehicle or vessel, or certain trucks carrying certain dangerous substances, while intoxicated by alcohol or impaired by drugs. N.Y. Penal Law Art.125 (McKinney 1998).
Federal Crimes and Criminal Procedures Law, 18 U.S.C.A. § 1033 (e)(1), (B) & (2) (West 2000), provides that any individual convicted of a criminal felony involving dishonesty or breach of trust commits a crime if he engages in the insurance business unless he has the written consent of an insurance regulatory official authorized to regulate the insurer. The Departments Licensing Bureau will determine whether the applicant can meet the requirement of being trustworthy and competent after ascertaining and considering the facts resulting in the conviction
Thus, the aforementioned laws could prevent an insurance agents license application from being approved unless the insurer and the superintendent find the applicant to be trustworthy and competent after examining and considering the facts that led to his conviction for vehicular manslaughter.
A licensed property and casualty agent is considering hiring and licensing an individual whom, three years ago, was convicted of, and sentenced to prison for, vehicular manslaughter. The agent has inquired whether there are any laws that would prohibit this individual from obtaining such a license.
N.Y. Ins. Law § 2103 (e)(2) (McKinney Supp. 2000) (emphasis added) provides:
(e) Before any original insurance agents license is issued there shall be on file in the office of the superintendent the following documents:
(1) a written application by the prospective licensee in such form or forms and supplements and containing information the superintendent prescribes; and
(2) a certificate of appointment by the insurer, fraternal benefit society or health maintenance organization stating that it has satisfied itself that the named applicant, and each sub-licensee, is trustworthy and competent to act as such an insurance agent and that such insurer, society or health maintenance organization will appoint such applicant to act as its agent in reference to the doing of such kind or kinds of insurance or health maintenance organization business as is specified in the written application, if the license applied for is issued by the superintendent. Such certificate shall be subscribed by an officer or managing agent of such insurer, society or health maintenance organization and affirmed by him as true under the penalties of perjury.
N.Y. Ins. Law § 2103 (h) (McKinney 1985) (emphasis added) provides:
(h) The superintendent may refuse to issue any insurance agents license if, in his judgment, the proposed licensee or any sub-licensee is not trustworthy and competent to act as such agent, or has given cause for the revocation or suspension of such a license, or has failed to comply with any prerequisite for the issuance of such license.
The Federal Crimes and Criminal Procedure Law, 18 U.S.C.A. § 1033 (e) (1) (A), (B) & (2) (West 2000) (emphasis added) provides:
(e)(1)(A) Any individual who has been convicted of any criminal felony involving dishonesty or a breach of trust, or who has been convicted of an offense under this section, and who willfully engages in the business of insurance whose activities affect interstate commence or participates in such business, shall be fined as provided in this title or imprisoned not more than 5 years, or both.
(B) Any individual who is engaged in the business of insurance whose activities affect interstate commerce and who willfully permits the participation described in subparagraph (A) shall be fined as provided in this title or imprisoned not more than 5 years, or both.
(2) A person described in paragraph (1)(A) may engage in the business of insurance or participate in such business if such person has the written consent of any insurance regulatory official authorized to regulate the insurer, which consent specifically refers to this subsection.
Thus, the insurer that wishes to appoint the applicant as its agent, must decide based on the underlying facts leading to the conviction for the felony of vehicular manslaughter, whether the applicant is trustworthy and competent. The insurer must also decide if the applicant has committed a breach of trust or was dishonest. If so, a waiver from the superintendent must be sought under the foregoing federal law by filing an application for such waiver with the New York Insurance Department.
For further information you may contact Associate Counsel Sidney B. Glaser.