Anyone hiring or licensing insurance agents, producers, brokers, or adjusters runs into a rule that does not show up in most employment screening conversations: a federal criminal statute that can bar someone from the industry outright, separate from whatever a state licensing board decides. That statute is 18 U.S.C. § 1033, and it is one of the few places in employment law where a background check finding is not just a hiring factor. It can be a federal crime waiting to happen if the person and the employer both ignore it.
What 18 U.S.C. § 1033 actually says
Section 1033 was enacted as part of the Violent Crime Control and Law Enforcement Act of 1994. The provision that matters most for hiring, codified at subsection (e), reads in relevant part that any individual who has been convicted of a felony involving dishonesty or a breach of trust, and who willfully engages in the business of insurance affecting interstate commerce or participates in that business, has committed a federal offense punishable by a fine or up to five years in prison. The statute goes further than the individual: any person engaged in the business of insurance who willfully permits that participation is exposed to the same penalty. Both halves of that sentence matter. The law reaches the convicted individual and the employer who knowingly lets them work without authorization. The exact statutory text is published by the U.S. Government Publishing Office and is worth reading directly rather than relying on a paraphrase, since the felony has to involve dishonesty or breach of trust specifically, not just any felony conviction. See the full text at govinfo.gov.
A companion provision, 18 U.S.C. § 1034, gives the Attorney General civil enforcement tools on top of the criminal penalty: a civil action seeking a penalty of up to $50,000 per violation or the amount of compensation the person received or was offered, whichever is greater, plus the option to seek an injunction against continued violation. So an agency that keeps someone on staff after learning about a disqualifying conviction is not just risking a criminal referral. It is exposed to a separate civil track with its own dollar penalty.
What counts as “the business of insurance,” and who the statute reaches
Section 1033(f) defines the business of insurance broadly: the writing of insurance or the reinsuring of risks by an insurer, plus all acts necessary or incidental to that writing, and the activities of anyone who acts as an officer, director, agent, or employee of an insurer, or who is otherwise authorized to act on an insurer’s behalf. In practice that reach extends past the person selling policies at a desk. It covers claims adjusters, underwriters, agency staff who bind coverage, third-party administrators handling claims on an insurer’s behalf, and corporate officers and directors of insurance entities. The statute does not require the person to be licensed to be covered. It asks whether the person is participating in the business of insurance, which is a functional test, not a title test.
This is also where the felony qualifier matters. Section 1033 does not disqualify someone for any felony. It specifically requires a felony involving dishonesty or breach of trust, a category that has generally been read to include offenses like fraud, embezzlement, forgery, bribery, and theft, but does not automatically sweep in every felony an applicant might have on record. Reading the actual conviction, not just the felony label, is part of getting this right.
The written consent process
Section 1033(e)(2) provides the way out: a person with a qualifying conviction may still engage in the business of insurance if they obtain the written consent of an insurance regulatory official authorized to regulate the insurer, and that consent specifically refers to the subsection. This is usually called a 1033 waiver or 1033 consent, and it is issued by the state insurance department, not by the employer and not by a court.
The process varies by state, since each state’s insurance department runs its own review, but the shape is similar across jurisdictions. Pennsylvania’s Insurance Department, for example, applies the waiver requirement to two groups: officers, directors, employees, and contractors of insurers, HMOs, and third-party administrators, and resident licensees such as agents, brokers, producers, surplus lines agents, public adjusters, and appraisers, per its 1033 waiver guidance. Other states, including Oklahoma and Maryland, run their own consent application processes through their insurance departments, typically requiring the applicant to submit certified records of the conviction, disposition, and sentence alongside the waiver application. There is no federal waiver that covers every state. A consent granted by one state’s regulator does not automatically transfer to another, so a producer moving states or holding multiple resident and non-resident licenses may need to confirm status separately in each one.
None of this is optional paperwork. Until the consent is granted, the individual is barred from participating in the business of insurance in any capacity that fits the statute’s definition, and the employer is barred from knowingly permitting it.
State licensing background checks: a separate, earlier layer
Before 1033 consent ever becomes relevant, most applicants go through a state licensing background check as part of getting a producer or adjuster license in the first place. This is a state law requirement, distinct from the federal criminal statute, and it is where fingerprinting enters the picture. Requirements vary by state and by whether the applicant is a resident or non-resident. North Carolina, for instance, requires resident producer license applicants to submit fingerprints within 30 days of applying, processed through the National Insurance Producer Registry, with the results supporting the state and FBI criminal history check tied to licensure, according to the North Carolina Department of Insurance. Many states exempt non-resident applicants who already hold a home-state license from a second round of fingerprinting, but that exemption is state-specific and should never be assumed.
The practical sequence for most agencies and carriers looks like this: the state licensing background check happens first, at application, and it screens for criminal history broadly, not only felonies involving dishonesty. A 1033 review happens on top of that, specifically asking whether any conviction in the record involves dishonesty or breach of trust and, if so, whether consent has been obtained. An agency can have a fully licensed producer on staff who is still not legally allowed to work in the business of insurance because the 1033 question was never asked.
How carriers and agencies build the screening picture
A full pre-hire or pre-appointment screen for an insurance role typically layers several checks rather than relying on the state license alone:
- Criminal history search, run at the county, state, and federal level depending on the candidate’s residence and work history, to surface any felony conviction and, specifically, whether it involves dishonesty or breach of trust for 1033 purposes.
- License verification with the relevant state insurance department or through NIPR, confirming the license is active, has not been revoked or suspended, and carries no unresolved disciplinary action.
- Employment and identity verification, standard practice across financial and insurance hiring.
- Credit history, where state law and the role justify it. Financial roles in insurance, particularly those handling premiums, claims payments, or underwriting authority, are one of the categories where credit checks are more commonly used, and they carry their own FCRA disclosure and adverse action obligations. Reveal’s financial background check services are built around that layered profile: identity, credit, and criminal history together, which is the same combination insurance agencies and carriers need for producer and back-office hiring.
Any consumer report used in that process, whether pulled for the criminal search, the credit check, or both, is governed by the Fair Credit Reporting Act regardless of the 1033 question. That means standalone disclosure, authorization, and, if the report contributes to a denial, a pre-adverse action notice with a copy of the report and a summary of rights before the final decision, followed by adverse action notice. The Federal Trade Commission’s guidance on using consumer reports for employment lays out those steps, and they apply on top of, not instead of, the 1033 consent question. For agencies building a repeatable screening workflow across producer and staff hiring, Reveal’s employment background check product covers the criminal, identity, and verification components that feed both the licensing file and the 1033 review.
Federal 1033 rule vs. state licensing background check
| Question | 18 U.S.C. § 1033 consent | State licensing background check |
|---|---|---|
| Legal basis | Federal criminal statute | State insurance code |
| Who administers it | State insurance regulatory official, acting under federal authority | State department of insurance |
| What triggers review | A felony conviction involving dishonesty or breach of trust | Any criminal history disclosed or found through fingerprinting |
| What happens without it | Federal crime for the individual and for an employer who knowingly permits participation | License denial, suspension, or revocation under state law |
| Path forward with a disqualifying record | Written consent application to the state regulator, specific to the statute | State appeal, hearing, or waiver process, which varies by state |
| Portable across states | Consent is state-specific unless the granting state’s process says otherwise | License reciprocity rules vary; background check requirements often differ for non-residents |
Getting the fair-chance piece right
None of this licenses an agency to treat every criminal record the same way. The Equal Employment Opportunity Commission’s enforcement guidance on arrest and conviction records lays out the individualized assessment approach: looking at the nature of the offense, how much time has passed, and its relevance to the job in question, rather than applying a blanket bar to anyone with any conviction. A 1033 felony (dishonesty or breach of trust) is a narrower category than “any felony,” and plenty of applicants have criminal records that do not touch it at all. Screening decisions should reflect that distinction rather than collapsing every criminal hit into an automatic disqualifier. State laws on how criminal history can be used in hiring vary too, so a screening policy built for one state’s rules should not be assumed to travel unchanged to another.
For someone with a qualifying conviction who wants to work in insurance, the consent process exists precisely because Congress did not intend a lifetime ban. It is a real path, administered by a real regulator, and it is worth pursuing rather than assuming the door is permanently closed.
Related reading
For agencies screening staff who handle premiums, claims payments, or trust accounts, the same dishonesty-and-breach-of-trust framing shows up in banking, where Section 19 of the FDI Act imposes its own conviction-based bar that runs on a similar logic to 1033. And because license status is central to both the licensing background check and the 1033 review, our guide to professional license verification covers how to confirm a license is active, current, and free of undisclosed discipline before or during employment.
Frequently asked questions
Does 18 U.S.C. 1033 apply to every felony conviction?
No. It applies specifically to felony convictions involving dishonesty or a breach of trust, a narrower category than felonies in general. A conviction unrelated to dishonesty or trust, standing alone, does not trigger the 1033 bar, though it may still be relevant to a state licensing decision or an individualized hiring assessment.
Who is responsible for getting a 1033 consent, the applicant or the employer?
The individual with the qualifying conviction applies for consent from the state insurance regulator. The employer’s obligation is separate: it cannot knowingly permit that person to participate in the business of insurance until consent has been granted, and it can face its own penalties for allowing it anyway.
Is a 1033 consent from one state valid in every state?
Not automatically. Consent is granted by a specific state’s insurance regulatory official and generally applies to that jurisdiction. Producers who work across multiple states, whether resident or non-resident, should confirm their status with each relevant state insurance department rather than assuming one state’s consent transfers.
Does a state insurance license mean the 1033 question has already been resolved?
Not necessarily. State licensing background checks and the federal 1033 consent requirement are separate processes with separate purposes. Someone can hold an active state producer license while still lacking the specific written consent 1033 requires if their record includes a qualifying felony.
Can a background check company determine whether someone needs a 1033 waiver?
A background check can surface the criminal history that raises the question, including whether a felony conviction exists and its underlying charge. Whether a specific conviction legally qualifies as involving dishonesty or breach of trust, and whether consent is required, is a determination for the individual, the employer, and where needed, the state insurance regulator or legal counsel, not something a screening report resolves on its own.
This article is general information, not legal advice. Federal and state insurance licensing and consent requirements change, and how they apply to a specific conviction or role depends on facts this article cannot evaluate. Employers and individuals with questions about a specific case should consult the relevant state insurance department or an attorney.
