Life & Health Insurance Practice Exam 2026 – Your All-in-One Guide to Exam Success!

The correct answer identifies sections 1033 and 1034 of the U.S. Code, which specifically outline the criminal penalties associated with engaging in the insurance business after a felony conviction. These sections were established to protect the integrity of the insurance industry and to ensure that individuals who have committed serious offenses do not pose a risk to policyholders and the general public.

Section 1033 prohibits individuals who have been convicted of a felony involving dishonesty or breach of trust from serving in various capacities within the insurance industry, including being an agent or broker. Noncompliance with this statute can result in significant legal consequences, including fines and imprisonment.

Section 1034 further reinforces this by specifying that it is illegal for such felons to knowingly participate in an insurance-related business, serving as a strong deterrent against individuals with relevant convictions seeking to re-enter the industry without addressing their past offenses. This regulatory framework is crucial for maintaining consumer trust within the insurance marketplace, thereby ensuring that only individuals with a sound ethical background are permitted to operate within this important sector.