New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

George E. Pataki
Governor

Howard Mills
Superintendent

The Office of General Counsel issued the following informal opinion on May 10, 2004, representing the position of the New York State Insurance Department.

Re: 18 USCA 1033 Waiver

Questions Presented

1. If a previously licensed public adjuster either surrendered his or her license with the full force and effect of revocation, or the license was revoked, and such person applies to become re-licensed as a public adjuster, does such person need a waiver pursuant to 18 USCA 1033 to work as a public adjuster if the underlying basis for the license revocation and/or surrender was any conviction of a felony crime that, pursuant to 18 USCA 1033, involved " . . . dishonesty or a breach of trust, or who has been convicted of an offense under this section . . . "?

2. If such re-licensed public adjuster plans to be self-employed, may such person obtain a waiver pursuant to 18 USCA 1033?

Conclusions

1. Yes. The waiver pursuant to 18 USCA 1033 is required for the person to work in the insurance business.

2. Yes, a re-licensed self-employed public adjuster may obtain a waiver pursuant to 18 USCA 1033 to work in the insurance business.

Facts

The inquirer is an attorney who has two different clients, who were previously licensed as public adjusters. One of the public adjusters surrendered his or her license with the full force and effect of revocation. The license of the other public adjuster was revoked after a hearing. The inquirer noticed that in prior opinions regarding re-issuance of licenses the Department required the applicant to have an offer of employment from a specific employer before even applying to obtain a waiver pursuant to 18 USCA 1033. The inquirer wants to know whether a self-employed person may obtain a waiver pursuant to 18 USCA 1033 since such person will not have a specific employer. The following analysis is based on the assumption that both the license revocation and surrender were the result of convictions that would require a waiver pursuant to 18 USCA 1033.

Analysis

In the inquirer’s inquiry, the inquirer mentioned N.Y. Ins. Law § 2111(a)(2) (McKinney 2000); however it is not relevant to the facts that the inquirer described because it addresses the issue of a person whose insurance license had been revoked, but wishes to work in the insurance business in an administrative capacity that does not require licensing, whereas under the facts that the inquirer supplied, the public adjusters who intend to be self-employed, wish to become re-licensed.

An 18 USCA 1033 waiver would be required under the facts that the inquirer provided. 18 USCA 1033 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;

. . . .

In conclusion, in order for a person to work in the insurance business who has been convicted of any felony crime that, pursuant to 18 USCA 1033, involved " . . . dishonesty or a breach of trust, or who has been convicted of an offense under this section . . . ", such person must have a waiver pursuant to 18 USCA 1033. If such person plans to work in a capacity that does not require a license, then such person must have proof of an offer of employment from a specific employer before even applying to obtain a waiver pursuant to 18 USCA 1033. If such person applies to become re-licensed by the Department, then the person need not specify in the 18 USCA 1033 application that such person has an offer of employment, and may, in fact, be self-employed.

For further information one may contact Senior Attorney Susan A. Dess at the New York City Office.