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Utah Insurance

Application Instructions and Process for Written Consent Under 18 U.S.C. § 1033

1. Introduction

Federal law provides penalties for a person who: (a) has been convicted of a felony involving dishonesty or breach of trust; and (b) willfully engages in the business of insurance affecting interstate commerce, unless the person receives written consent from the state insurance regulatory official with appropriate jurisdiction. See, Violent Crime Control and Law Enforcement Act of 1994, 18 U.S.C. §§1033 and 1034.

A person who has not obtained written consent and who has been convicted of a felony involving dishonesty or breach of trust is a “prohibited person.” A prohibited person who engages in the business of insurance faces possible federal criminal and civil action and state administrative action.

The federal law also penalizes those in the insurance industry who willfully allow prohibited persons to engage in the business of insurance. They must notify the Utah Insurance Department (“the Department”) in writing of an employee or agent who is a prohibited person.

2. A prohibited person may seek written consent

A prohibited person may seek written consent to engage in the business of insurance in Utah. The process for obtaining consent is set forth in this document. The process is available only to a Utah resident who is seeking or renewing a Utah insurance license or who wishes to be employed in the business of insurance in Utah in a non-licensed capacity. A non-resident should consult her or his home state insurance department. A prohibited person who seeks a Utah non-resident license must provide the Department with a copy of the home state’s written consent.

3. Definitions of relevant terms

Breach of Trust. A crime involving breach of trust includes, but is not limited to, an offense constituting or involving misuse, misapplication or misappropriation of: (a) anything of value held as a fiduciary (including, but not limited to, a trustee, administrator, executor, conservator, receiver, guardian, agent, employee, partner, officer director or public servant); or (b) anything of value of any public, private or charitable organization.

Business of Insurance. This term means the writing of insurance or 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.

Conviction. This term includes, but is not limited to: (a) a plea in abeyance or other similar agreement that defers a criminal judgment, regardless of whether the criminal charges were dismissed pursuant to the terms of the agreement; and (b) an expunged conviction.

Dishonesty. A crime involving dishonesty includes, but is not limited to, an offense constituting or involving perjury, bribery, forgery, counterfeiting, false or misleading oral or written statements, deception, fraud, schemes or artifices to deceive or defraud, material misrepresentations and the failure to disclose material facts.

Felony. A “felony” is an offense that is specifically classified as such in the section defining it. If there is no classification, an offense is a felony if the maximum term of authorized imprisonment authorized is more than one year, or if the maximum penalty is death.

4. Applying for written consent

  1. Each prohibited person seeking written consent must submit a completed Application for Written Consent to Engage in the Business of Insurance (“Application”) addressed to 18 U.S.C. §1033 Advisory Committee (“Committee”), Utah Insurance Department. An Application shall be electronically submitted to 1033cmte@utah.gov.
  2. A prohibited person has the responsibility to read the Application in its entirety and answer every question completely and accurately. Absolute and complete candor is required. Failure to complete the Application or submit any requested documentation shall result in denial of the Application. An amendment to the Application must be filed immediately upon the occurrence of any event or discovery or recollection of any fact that would change any answer on the Application. Failure to file a timely amendment may result in denial of written consent or withdrawal of previously granted consent.

5. Process for granting or denying an Application

  1. An Application is initially reviewed by the Committee which consists of the directors of the Fraud, Health and Life and Property and Casualty Divisions, an assistant attorney general, and a deputy commissioner.
  2. The Committee recommends to the Utah Insurance Commissioner (“the Commissioner”) whether to grant the Application.
  3. A recommendation is merely advisory and does not bind the Commissioner.
  4. The Commissioner makes the final decision on an Application and has sole discretion and sole authority to grant or deny. The decision shall be in writing.
  5. If an Application is granted, the written decision must require periodic review to determine whether the person granted consent is abiding by the terms and conditions of consent.

6. Standard by which an Application is evaluated

An Application provides a prohibited person with the opportunity to demonstrate that, notwithstanding the conviction(s), he or she is sufficiently trustworthy to participate in the business of insurance without being a risk to consumers and/or insurers. A prohibited person has the burden of satisfying this standard. Factors that may be considered by the Committee and the Commissioner include, but are not limited to, the following:

  • the nature and severity of the offense and sentence;
  • the date of conviction(s);
  • the age at the time of committing the crime(s);
  • the nature and extent of injury and/or loss caused by the act for which the prohibited person was convicted;
  • unpaid judgement(s);
  • whether the crime was related to the business of insurance or the exercise of any professional or other license or authority conferred by a federal, state or local governmental agency;
  • whether the prohibited person received a pardon from the sovereign that convicted him or her, and the reason for it;
  • whether the prohibited person successfully completed parole or probation without incident and whether payment of all fines, penalties or other assessments were satisfied;
  • any aggravating or mitigating factors;
  • whether other jurisdictions have granted or denied an 18 U.S.C. § 1033 consent;
  • the nature and strength of any letters of recommendation and other evidence of rehabilitation;
  • the prohibited person’s employment history before and after the commission of the crime(s);
  • the nature of any consumer complaints in the Department’s possession or reported by the prohibited person;
  • whether and to what extent the prohibited person has made materially false statements in any license application or in any other documents filed with the Department and/or the Committee;
  • the prohibited person’s proposed type of employment in the insurance industry;
  • the extent to which the prohibited person will be supervised in that employment;
  • whether and to what extent the prohibited person has made materially false statements in any application or in other documents filed with any other state or federal agency; and
  • whether the prohibited person has had any professional license revoked or suspended by any state or federal agency.

An Application granted by the Commissioner is conditioned on the truth of the documents and information submitted by or on behalf of the prohibited person. If a prohibited person has made materially false or misleading statements, has presented materially false or misleading information, or has failed to disclose material information, the grant of an Application is void. Such conduct may constitute a separate violation of law.

7. Ongoing duties of person whose Application is granted

  1. A person whose Application is granted has the Commissioner’s consent to engage in the business of insurance according to the terms and conditions of the written consent. A violation of those terms voids the consent and may subject the person to administrative action.
  2. A person with consent shall immediately notify the Committee of any subsequent criminal charge. A failure to give this notice voids the consent.
  3. A person with consent must submit a new Application to engage in insurance-related employment that is not authorized by the Commissioner’s consent. Until the new Application is granted, the person may not engage the unauthorized employment. A violation of this requirement voids the consent.

8. Final decision

The Commissioner’s decision on an Application is final. A prohibited person has no rights to reconsideration or appeal.

9. Subsequent Application

Once an Application is denied, a prohibited person may not reapply without demonstrating a material change in the facts and circumstances presented in the original Application. In no event may an Application be submitted more frequently than once per year.

 

Download the Application

Application to Utah Insurance Commissioner for Written Consent to Engage in the Business of Insurance Pursuant to 18 U.S.C. §§ 1033 and 1034