When can a lawyer who is also a licensed insurance broker sell insurance products to the lawyer's own clients and to non-clients?
NY State Bar Ethics Opinion 687: A lawyer who is also a licensed insurance broker
Short answer: The opinion concluded that a lawyer licensed as an insurance broker may sell insurance to a client only where insurance advice is merely tangential to the legal representation, with full disclosure and consent; where advising the client about the insurance is central, the conflict cannot be cured by consent. Sales to non-clients are governed by the rules against dishonesty and on solicitation.
Disclaimer: This is an advisory ethics opinion. Advisory opinions are not binding; they interpret the New York State Bar Association's rules of professional conduct and are persuasive authority. This summary is for research purposes only and is not legal advice. Verify current rules before acting on any specific guidance.
About this page: The plain-English summary and Q&A below were written by Ezel based on the official opinion. We do not reproduce the opinion text on this page; follow the linked source for the official text, which controls.
Plain-English summary
The committee was asked when a practicing attorney who is also a licensed insurance broker may sell insurance products to clients and non-clients. For sales to clients, it analyzed two related rules: DR 5-101(A), which protects the lawyer's professional judgment from being impaired by the lawyer's own interests, and DR 5-104(A), which guards against overreaching in a business transaction with a client.
On DR 5-101(A), the committee explained that the rule applies when the lawyer's interest as a broker would, or reasonably may, affect the lawyer's professional judgment, which depends on the nature and scope of the representation. Where the representation would ordinarily involve advising the client about the type of insurance the lawyer sells, judgment is most at risk; the committee gave estate planning and life insurance as the example (citing N.Y. State 619 (1991)). Where the client's insurance need is unrelated to the representation, such as selling auto insurance to a commercial litigation client, judgment is unlikely to be affected. If the rule applies, the lawyer may proceed with disclosure and consent only when it is "obvious" the lawyer can adequately represent the client, which is likely only when insurance advice is tangential. But where advising on the insurance is central to the representation, the committee concluded it would never be obvious that judgment is unimpaired, so the conflict is non-consentable, as it had held for estate planning life insurance in N.Y. State 619.
If DR 5-101(A) does not bar the sale, DR 5-104(A) still requires the lawyer, before the transaction, to make clear that in selling insurance the lawyer is acting only as a broker and not exercising professional judgment for the client's protection, to deal fairly, and to avoid overreaching. For non-clients, the conflict rules do not apply because the lawyer is not functioning as a lawyer; instead the lawyer is bound by DR 1-102(A)(4) (no dishonesty, fraud, deceit, or misrepresentation) and the solicitation rules of DR 2-103 and 2-104. The committee cautioned that the lawyer-broker must avoid inadvertently creating an attorney-client relationship, especially when insurance is sold out of the law office, and must clarify the broker-only role if a purchaser appears to expect legal judgment.
Currency note
This opinion was issued in 1997, under New York's former Code of Professional Responsibility, which New York replaced with the Rules of Professional Conduct in 2009. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.
Common questions
Q: Can a lawyer-insurance broker sell insurance to a current client?
A: The opinion concluded yes, but only where insurance advice is tangential to the representation, with full disclosure of the risk to judgment and the client's consent.
Q: When is selling insurance to a client flatly prohibited?
A: The opinion concluded the sale is barred where advising the client about which insurance product to buy is central to the representation, because it would never be obvious the lawyer's judgment is unimpaired; the estate planning life insurance scenario in N.Y. State 619 is the example.
Q: What rules apply when selling insurance to non-clients?
A: The opinion concluded the conflict rules do not apply, but the lawyer is still bound by DR 1-102(A)(4) against dishonesty and by the solicitation rules in DR 2-103 and 2-104, and must avoid inadvertently forming an attorney-client relationship.
Background and rules framework
The opinion interpreted DR 5-101(A) (the lawyer's own interests) and DR 5-104(A) (business transactions with a client) of New York's former Code, together with DR 1-102(A)(4) and the solicitation rules DR 2-103 and 2-104. The Model Rule analogues are Rule 1.7 (personal-interest conflicts) and Rule 1.8(a) (business transactions with clients). New York replaced the Code with the Rules of Professional Conduct in 2009; the DR numbers cited here are historical.
Citations and references
Rules of Professional Conduct:
- MR 1.7 (conflict of interest; personal interests)
- MR 1.8(a) (business transactions with a client)
- NY DR 5-101(A); DR 5-104(A); DR 1-102(A)(4); DR 2-103; DR 2-104
Other opinions cited:
- N.Y. State 619 (1991): estate planner may not sell life insurance to estate planning clients
- N.Y. State 635 (1992), 595 (1988): the "obviousness" limit on consent under DR 5-101(A)
- N.Y. State 550 (1983): fair dealing in business transactions with a client
See also
- NY State Bar Op. 711: Selling long-term care insurance to estate clients
- NY State Bar Op. 688: Law school clinic conflict with a trustee opponent
- NY State Bar Op. 712: Lawyer as trust beneficiary holding client stock
Source
- Landing page: https://nysba.org/opinion-687/