The federal felony bar most agents have never heard of: 18 U.S.C. §1033

Everything else in this Library runs through state licensing, appointment, and disciplinary systems. This page covers something separate and federal: a law that makes it a crime for a person convicted of certain felonies to work in insurance at all, regardless of what any state license search shows — unless a regulator has given that specific person written consent first. It rarely comes up, and it matters exactly when it does.

What the statute actually says

18 U.S.C. §1033, part of the 1994 Violent Crime Control and Law Enforcement Act, makes it a federal crime for anyone previously convicted of a felony involving dishonesty or breach of trust to willfully engage or participate in the business of insurance whose activities affect interstate commerce — which covers essentially any licensed producer, agency, or insurer today. A companion provision, 18 U.S.C. §1034, sets out civil penalties the U.S. Attorney General can pursue for the same conduct, on top of the criminal exposure. Violating §1033 itself is punishable by a fine and up to five years in federal prison.

There’s no time limit, and no case-by-case exception built in

The felony doesn’t have to be insurance-related, and there’s no statute of limitations written into the bar itself — a qualifying conviction from decades earlier still triggers it today, the same as one from last year. “Dishonesty or breach of trust” is deliberately broad: embezzlement, fraud, and larceny convictions are the clearest examples, but the test turns on the elements of the underlying offense, not the specific label a state gave it, so a conviction that isn’t obviously an “insurance crime” can still qualify.

The one way around it: written consent, obtained first

The statute has a built-in exception: a person barred under §1033 can apply for the written consent of “any insurance regulatory official authorized to regulate” the insurer they’d work for or on behalf of — in practice, an application filed with a state insurance department (commonly called a “1033 waiver” or “1033 consent” application), which typically asks for the conviction details, sentence and any restitution or supervision history, and a case for why consent should be granted. The order matters: the exception only protects someone once consent is actually granted, not while an application is merely pending — working in the business of insurance before consent is issued is itself a violation, with no grace period for a good-faith application still under review.

Why a clean state license search doesn’t settle the question

This is the part worth understanding even if you never need to check it yourself: §1033 operates independently of state licensing. A state’s own background-check and fingerprinting process at initial licensure (see our California licensing explainer for one state’s specific version of that process) is the front-line screen most producers actually pass through, and a state DOI’s disciplinary-action search — covered in our disciplinary-search guide — is where a state-level licensing denial or revocation would show up. A federal §1033 consent grant or an underlying qualifying felony doesn’t necessarily appear as a separate, clearly labeled entry in either one, because §1033 is a distinct federal statute enforced by federal prosecutors, not a state licensing action a state database is built to display.

What this connects to in our own standard

Our standard’s disciplinary-history check (point 4) looks at what a state DOI’s own enforcement-action search and NIPR’s shared record actually show — the checkable, public layer. A §1033 bar and any consent granted under it sit in a separate federal system this site doesn’t have independent access to verify producer-by-producer, which is exactly why it’s explained here as background, not folded into the standard’s checklist as an eleventh point we can’t actually check against a public record the way we can the other ten.