New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT
ONE COMMERCE PLAZA
ALBANY, NEW YORK 12257

David A. Paterson
Governor

Eric R. Dinallo
Superintendent

The Office of General Counsel issued the following opinion on April 23, 2008, representing the position of the New York State Insurance Department.

Re: 1033 Waiver

Question Presented:

May an insurer employ a person who has been convicted of a felony for criminal possession of a forged instrument?

Conclusion:

An insurer that employs a person who has been convicted of a felony involving dishonesty or breach of the trust, or of an offense under 18 U.S.C. § 1033, runs afoul of The Violent Crime Control and Law Enforcement Act of 1994, 18 U.S.C. § 1033(e), unless the person has obtained written consent from an insurance regulatory official authorized to regulate the insurer, such as the Superintendent.

Facts:

The inquirer reports that he was denied employment as a service associate trainee for an insurer because he has a class E felony conviction for criminal possession of a forged instrument. The inquirer asks whether an insurer may refuse employment on that basis.

Analysis:

The Violent Crime Control and Law Enforcement Act of 1994, 18 U.S.C. § 1033(e) (the “Act”), prohibits insurers from employing a person who has been convicted of a felony involving dishonesty or breach of the trust, or of an offense under 18 U.S.C. § 1033, unless the person has obtained written consent from an insurance regulatory official authorized to regulate the insurer, such as the Superintendent. The statute states, in relevant part, as follows:

(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; . . .

At issue here is a felony conviction for possession of a forged instrument. Although the inquirer did not specify the state in which he was convicted, a forged instrument is commonly defined as a false or altered document that a person has made to appear genuine. See Black’s Law Dictionary at 661 (7th ed. 1990) (defining the term “forgery”). Forgery clearly constitutes an act involving dishonesty because dishonesty is commonly defined to include deceiving another. See Webster’s NewWorld Dictionary: Second College Edition at 404 (1980). It logically follows that a person who knowingly has a forged instrument in his or her possession is engaged in an act that involves dishonesty. Given this circumstance, the Department is of the view that a felony conviction for possession of a forged instrument is a criminal felony involving dishonesty within the meaning of the Act.

With regard to obtaining written consent from the Superintendent (hereinafter “1033 Waiver”), please review Opinion of General Counsel No. 00-01-03 (January 12, 2000), a copy of which is attached hereto. That opinion describes the procedure for applying for a 1033 Waiver from the Superintendent. Note that if the waiver is for employment, the applicant must have an offer of employment from the potential employer prior to submitting a waiver application. The application is available on the Department’s website at www.ins.state.ny.us. A completed application may be mailed to the following address:

State Of New York
Insurance Department
Licensing Bureau
One Commerce Plaza
Albany, New York 12257

In addition, Correction Law Article 23-A, particularly § 752 was noted to the inquirer. Correction Law § 752 reads as follows:

No application for any license or employment, and no employment or license held by an individual, to which the provisions of this article are applicable, shall be denied or acted upon adversely by reason of the individual's having been previously convicted of one or more criminal offenses, or by reason of a finding of lack of "good moral character" when such finding is based upon the fact that the individual has previously been convicted of one or more criminal offenses, unless:

(1) there is a direct relationship between one or more of the previous criminal offenses and the specific license or employment sought or held by the individual; or

(2) the issuance or continuation of the license or the granting or continuation of the employment would involve an unreasonable risk to property or to the safety or welfare of specific individuals or the general public.

Also, Correction Law § 753 sets out a list of factors for a prospective employer to consider regarding the employment of a person with one or more convictions.

For further information you may contact Senior Attorney Brenda Gibbs at the Albany Office.