Does a lawyer acting as a title insurance issuing agent improperly solicit by complying with state disclosure regulations?

Plain-English summary

A lawyer asked whether he could comply with a 1969 Insurance Commissioner bulletin and proposed regulations dealing with the duties of those who issue mortgagee title insurance policies. The regulations required issuers to tell purchasers of real property about the limits of mortgagee coverage and to give them a chance to buy owner's coverage at the same time. The lawyer's concern was whether complying would be solicitation condemned by the former Canon 28.

The committee observed that many Florida lawyers serve as title insurance issuing agents and that thousands act in an analogous capacity through the Lawyers' Title Guaranty Fund, so a lawyer may properly serve as an issuing agent. It found no possibility of the harm condemned by Canon 28 in complying with the disclosure regulations, reasoning the requirements would, if anything, increase public confidence, since many buyers had not understood that they lacked owner's coverage under a mortgagee policy. The committee noted that a duty along these lines may already follow from Canon 9's bar on misleading a person without counsel, and concluded the lawyer could comply. It declined to opine on whether the regulations were too extensive, treating that as a matter of administrative judgment for the Insurance Commissioner.

Currency note

This opinion was issued in 1969, before The Florida Bar's adoption of the 2006 revisions to the Rules of Professional Conduct. It applied the former Canons 9 and 28. The opinion itself notes that those canons map to current Rules 4-4.1 and 4-4.3 (truthfulness toward and dealing with unrepresented persons) and 4-7.18(a) (solicitation). Treat this page as historical context, not current guidance. Verify against the current rules before relying on any specific requirement mentioned here.

Common questions

Q: Can a lawyer act as a title insurance issuing agent?

A: Under this opinion, yes. The committee noted that many Florida lawyers serve as issuing agents and that thousands act analogously through the Lawyers' Title Guaranty Fund, and it concluded a lawyer may properly serve in that capacity.

Q: Is telling a buyer about coverage limits and offering owner's coverage improper solicitation?

A: No. The committee saw no possibility of the harm condemned by Canon 28 from complying with the disclosure regulations, and observed that the requirements would, if anything, increase public confidence in the lawyers involved.

Q: Did the committee decide whether the regulations went too far?

A: No. It declined to opine on whether the bulletin and proposed regulations were too extensive, treating that as a matter of administrative judgment for the Insurance Commissioner.

Background and rules framework

The opinion applied the former Canon 28 on solicitation and Canon 9 on avoiding the misleading of a person without counsel. The opinion's own bracketed cross-references map those canons to current Rule 4-7.18(a) (solicitation) and Rules 4-4.1 and 4-4.3 (truthfulness in statements to others and dealing with an unrepresented person) of the Rules Regulating The Florida Bar. The Model Rule analogues are Rules 7.3, 4.1, and 4.3.

Citations and references

Rules of Professional Conduct:

• Canon 28 [Code of Professional Responsibility; solicitation now in Rule 4-7.18(a)]
• Canon 9 [now in Rules 4-4.1 and 4-4.3]

Other opinions cited:

• Florida Opinion 61-37 [since withdrawn]
• Florida Opinion 61-60
• Florida Opinion 63-25 [since withdrawn]

See also

No sibling opinions yet indexed.

Source

• Landing page: https://www.floridabar.org/etopinions/etopinion-69-25/
• Original PDF: https://www-media.floridabar.org/uploads/2017/04/FL-Bar-Ethics-Op-69-25-2.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

FLORIDA BAR ETHICS OPINION
OPINION 69-25
July 23, 1969
Advisory ethics opinions are not binding.
A lawyer serving as issuing agent for title insurance policies should comply with state regulations that require persons issuing mortgage title insurance policies to apprise the purchasers of real property of the limitation in coverage of such policies and to afford such purchasers an opportunity to procure owner's coverage at the same time. To so comply would not constitute improper solicitation.
Canons: 9 and 28 [See current 4-4.1, 4-4.3 and 4-7.18(a)]
Opinions: 61-37, 61-60, 63-25
Chairman MacDonald stated the opinion of the committee:
A member of The Florida Bar has invited our attention to the provisions of Bulletin 449 issued by the Insurance Commissioner of the State of Florida on April 30, 1969, and to proposed Rule 5-21.01 and 5-21.02 of the Insurance Commissioner, presently scheduled for public hearing on July 21, 1969.
In sum, the Bulletin and proposed regulations deal with the responsibilities of persons issuing mortgagee title insurance policies to apprise purchasers of real property of the limitation in coverage of such policies and to afford such persons an opportunity to procure owner's coverage at the same time. We are asked whether a lawyer serving as an issuing agent for title insurance policies in the course of closing a transaction for the mortgagee lender may properly comply with these regulations, the ultimate concern of this inquiry being whether it would constitute solicitation condemned by Canon 28 for the lawyer to comply with the Bulletin and proposed regulations.
It is common knowledge that many members of The Florida Bar serve as issuing agents for title insurance companies; moreover, more than 3,000 members of The Florida Bar are members of the Lawyers' Title Guaranty Fund, as a consequence of which they perform an analogous function by executing title insurance instruments on behalf of the Fund. We have dealt in the past with various problems arising from such services. (See our Opinions 61-37 [since withdrawn], 61-60 and 63-25 [since withdrawn]). It is obvious, therefore, that a lawyer may properly serve in this capacity as an issuing agent.
Although clearly governed by the Canons of Ethics in such service, it is also essential that the lawyer comply with relevant regulatory requirements imposed by the constitutional officer charged by the legislature with the regulation of title insurance. There is no need here for the Committee to apprehend what the duty of the lawyer might be were such requirements to conflict with the Canons because here they may be easily accommodated.
We see no possibility of harm of the type condemned by Canon 28 resulting from the lawyer's complying with the Bulletin and proposed regulations as an incident to the issuance of the mortgagee title policies and attending to the closing of a real estate transaction. It is our conviction that the requirements will, if anything, increase public confidence in lawyers who may be involved in such situations. Doubtless, many persons in the past have not been aware that as owners they did not procure title insurance coverage through the mortgagee title policy. Instances have occurred in which such persons felt this matter should have been specifically called to their attention by the attorney for the mortgagee. Indeed, it may well be that a duty to such effect is found in the requirements that a lawyer not mislead one without counsel as now imposed by Canon 9. [See current Rules 4-4.1, 4-4.3 and 4-7.18(a)]
In sum, we see no significant possibility of any infringement upon the provisions of Canon 28 [See current Rule 4-7.18(a)].
Accordingly, we conclude that an attorney may properly comply with the Bulletin and proposed regulations. It has been suggested that the Bulletin and proposed regulations are too extensive and need not include a positive tender of insurance, but we conclude this is a matter of administrative judgment to be considered by the Insurance Commissioner and not by this Committee.