OGC Op. No. 04-04-16
The Office of General Counsel issued the following informal opinion on April 20, 2004, representing the position of the New York State Insurance Department.
Re: Conviction
Question Presented
May a person who never held any sort of insurance license, and who was convicted of a Class E Felony, work in an office of a licensed bail bond agent?
Conclusion
Nothing in the New York Insurance Law would prevent such a person from working in an office of a licensed bail bond agent. However, based on the facts provided, 18 U.S.C.A. 1033 would prohibit such employment unless consent is granted by the Superintendent.
Facts
The inquirers client is seeking employment in an office of a licensed bail bond agent who has raised concerns that the inquirers client may be barred from working in the agents office because of the inquirers clients conviction of a "Scheme to Defraud in the First Degree" in violation of New York Penal Law section 190.65, a class E felony. A Certificate of Relief from Disabilities was issued by the State of New York.
The inquirers clients employment duties would be the following: compile information for completion of the application from potential clients or their representatives; verify the identification of all persons required to execute the applications; verify the offenses charged; investigate and substantiate forms and amounts of collateral for the bail bond; deliver the results of any interviews and investigations/verifications to the licensed bail bond agent.
The inquirers clients prospective employer is concerned that N.Y. Ins. Law § 2111 (McKinney 2000) may prevent this employment, even though the employer believes that these duties are ministerial or clerical in nature.
Analysis
N.Y. Ins. Law § 2111(a)(2) (McKinney 2000), concerning revocation of licenses, states in relevant part:
No individual, corporation, partnership, association, firm or entity subject to the provisions of this chapter shall knowingly employ or appoint any person or entity whose license issued under this article has been revoked, or whose license to engage in the business of insurance in any capacity has been revoked without the prior written approval of the superintendent
Based on the facts presented, the inquirers client was never licensed under the New York Insurance Law; therefore, N.Y. Ins. Law § 2111(a)(2) (McKinney 2000) would not apply.
However, one should also be aware of 18 U.S.C.A. 1033, which states in relevant part:
(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 commerce 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.
(f) As used in this section
(1) the term "business of insurance" means --
(A) the writing of insurance, or
(B) the reinsuring of risks,
by an insurer, including all acts necessary or incidental to such writing or reinsuring and the activities of persons who act as, or are, officers, directors, agents, or employees of insurers or who are other persons authorized to act on behalf of such persons
It is not clear from the facts provided by the inquirer whether the inquirers client will actually interview potential bailbond clients. Since the inquirers clients duties are not clearly described, it is unclear whether such work would require a license by the New York State Insurance Department, or otherwise require a license, as for example as a private investigator, under New York law. However, even if no such New York State licensure is needed, the inquirers clients activities would come within the scope of 18 U.S.C.A. 1033 and will require the written consent of the Superintendent as specified in 18 U.S.C.A. 1033(B)(2). Without such consent, both the inquirers client and the licensed bail bond agent would be in violation of 18 U.S.C.A. 1033. Application for such consent can be found at http://www.ins.state.ny.us/app1033.htm.
For further information one may contact Senior Attorney Susan A. Dess at the New York City Office.