Not that aftermarket CATs fail, they just have less of the prescious metals than the original CATs and the O2 sensors will acknowlege that after a few months of operation. There is a reason that California makes it illegal to use aftermarket CATs on cars registered there.
Is the engine 'clean' enough to pass inspection? Probably, if a tail pipe gas probe is used. But, a lot of Volvo owners complain about the rear O2 sensor giving them problems, especially when accellerating with a cold engine.
I wouldn't get a new CAT unless the error code specifically told me that the CAT was in fact dead or I could hear the internals rattling around.
Always check for vacuum leaks, exhaust leaks, or in my case - a failed SAS valve allowing exhaust to move freely between the air pump/air filter in both directions.
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