Can a lawyer who is also a licensed insurance broker sell long-term care insurance to the lawyer's own estate-planning clients?
NY State Bar Ethics Opinion 711: A lawyer-broker selling insurance to estate-planning clients
Short answer: The opinion concluded a lawyer who is also a licensed insurance broker may not sell long-term care insurance to clients the lawyer represents in estate planning, because that advice is central to the representation and the conflict cannot be cured by disclosure and consent.
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
A lawyer who was licensed as an insurance broker asked whether the lawyer could sell long-term care insurance to clients the lawyer represented in estate planning. The committee concluded the lawyer could not, extending its earlier holding in N.Y. State 619 (1991) (which barred a lawyer with a financial interest in a planning service from recommending life insurance to estate-planning clients) to long-term care insurance.
The committee analyzed the question under the two rules it had laid out in N.Y. State 687 (1997). DR 5-101(A) addressed the danger that the lawyer's professional judgment would be affected by the lawyer's financial interest as a broker; it permitted selling insurance to a client, with consent after full disclosure, only where advice about the insurance was merely tangential to the representation. Where there was a reasonable probability, viewed objectively, that the lawyer's judgment would be adversely affected, for example where advising on the insurance was central to the representation, the lawyer could not offer to sell it at all. DR 5-104(A) addressed the danger that the client would be misled into thinking the lawyer was exercising professional judgment for the client's protection in the transaction; it required the lawyer to make clear he or she was acting only as a broker, not as a lawyer, to obtain consent, and to deal fairly without overreaching.
Applying that framework, the committee found long-term care insurance shares the key characteristics of life insurance: a wide array of products at different prices and threshold questions about whether it is the most appropriate or economical way to meet the client's needs. Because estate planning centrally involves how to satisfy the client's financial needs and provide for health-related contingencies, advice about long-term care insurance was not "merely tangential" but central to the representation. The committee therefore held the lawyer was categorically forbidden from selling such insurance to the lawyer's own estate-planning clients, and that this conflict could not be cured by disclosure and consent.
Currency note
This opinion was issued in 1998, 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 who is also an insurance broker sell insurance to clients?
A: The opinion said it depends on the matter. Under DR 5-101(A), a lawyer-broker may sell insurance to a client with consent after full disclosure only where the insurance advice is merely tangential to the representation; where it is central, the lawyer may not sell it at all.
Q: Why couldn't disclosure and consent fix the conflict here?
A: The opinion concluded that, in estate planning, advice about long-term care insurance is central to the representation, so there was a reasonable probability the lawyer's judgment would be adversely affected; that kind of conflict cannot be cured by consent.
Q: Does this apply only to long-term care insurance?
A: The opinion's conclusion swept more broadly, stating a lawyer may not sell long-term care insurance to clients where the representation relates to estate planning or other matters that might reasonably cause the lawyer's professional judgment to be affected by the lawyer's own financial interests.
Background and rules framework
The opinion interpreted DR 5-101(A) (personal-interest conflicts) and DR 5-104(A) (business transactions with a client where the client expects the lawyer to exercise professional judgment) of New York's former Code of Professional Responsibility. The Model Rule analogues are Rule 1.7 (personal-interest conflicts) and Rule 1.8(a) (business transactions with a client). 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)
Other opinions cited:
- N.Y. State 619 (1991): lawyer may not recommend life insurance to estate-planning clients where the lawyer has a financial interest in the seller
- N.Y. State 687 (1997): the two-rule framework for a lawyer-broker selling insurance to clients
- N.Y. State 635 (1992); N.Y. State 595 (1988): the obvious-adequacy and reasonable-probability standards
See also
- NY State Bar Op. 712: A lawyer who is a beneficiary of a trust holding client stock
- NY State Bar Op. 715: A contract lawyer working for multiple firms
Source
- Landing page: https://nysba.org/opinion-711/