May a practicing lawyer also act as an insurance agent and write fire insurance for family members and others?

Plain-English summary

A lawyer who was a stockholder in and attorney for a fire insurance company, and who also represented relatives and family members carrying substantial insurance on Oklahoma real estate, asked whether any rule prohibited a lawyer from writing insurance. The company had suggested appointing him a special agent so he could place a fair portion of the family's insurance, much of which was being written in out-of-state companies. He stated that the insured and the company would not be antagonistic and that there would be no division of commissions.

The Board concluded that the writing of fire insurance by a lawyer while in active practice was not condemned by any accepted standard in this country, on two conditions: that it be done with due observance of the standard of conduct required of him as a member of the bar, and that he not use the business of writing insurance as a means of obtaining law business, nor use the fact that he is a member of the bar to obtain insurance business.

Currency note

This opinion was issued in 1933, decades before Oklahoma replaced its original Rules of Professional Conduct (patterned on the ABA Canons of Professional Ethics) with the Oklahoma Rules of Professional Conduct (adopted 1988) and the later Ethics 2000 revisions. A lawyer's outside business activities and the bar against using one practice to solicit the other are addressed today by separate provisions of the current Oklahoma Rules of Professional Conduct. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific principle mentioned here.

Common questions

Q: Could a lawyer in active practice also write fire insurance?

A: Yes. The Board concluded that writing fire insurance was not condemned by any accepted standard, subject to the two conditions it stated.

Q: What conditions did the Board attach?

A: The lawyer had to observe the standard of conduct required of a bar member, and could not use the insurance business to obtain law business or use his bar membership to obtain insurance business.

Q: Did the absence of divided commissions matter to the Board's conclusion?

A: The inquirer noted there would be no division of commissions, but the Board's stated conditions turned on not cross-soliciting between the two businesses rather than on commission splitting.

Background and rules framework

The inquiry arose under the canon-era Oklahoma Rules of Professional Conduct in force in 1933, patterned on the ABA Canons of Professional Ethics. The opinion did not cite a specific numbered rule. The Board's concern was that a lawyer's outside business not become a feeder for law business, and that bar membership not be used to draw insurance business, while otherwise leaving the lawyer free to engage in the insurance business.

Citations and references

Rules of Professional Conduct:

• The opinion does not cite a specific numbered rule of professional conduct.

See also

• Okla. Bar Ethics Op. 31: Law Firm Managing a Lay Adjustment Bureau
• Okla. Bar Ethics Op. 34: Incoming County Judge Continuing a Collection Business
• Okla. Bar Ethics Op. 30: Directory Display Ads and Lay Adjusters in the Industrial Court

Source

• Landing page: https://www.okbar.org/ethics/ethics-opinion-no-48/

Original opinion text

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

Adopted January 27, 1933

The Board is in receipt of the following request:

"Will you kindly give me an opinion on the following matter?

I am a stockholder and attorney for a fire insurance company which writes fire insurance within the State of Oklahoma. At the same time, I represent relatives and members of my family who carry insurance, approximately in the sum of half million dollars on real estate located within the State of Oklahoma. A great deal of this insurance is being written in foreign companies, and the company I represent, has suggested that I be appointed as Special Agent for this company, so that I could write and place in the company, a fair portion of this insurance.

What I desire to know, if there is any rule prohibiting an attorney from writing insurance. I might state, that after careful consideration, I cannot see where at any time, the relation of the insured and the company would be antagonistic.

I might further add that at no time would there be any division of commissions with any person. It would simply be a matter of my receiving the insurance commission, which, at the time, is paid by close members of the family, and which goes to outsiders."

In response:

The writing of fire insurance by a lawyer while in the active practice, is not, in the opinion of the Board, condemned by any accepted standard in this country, provided that it is done with due observance of the standard of conduct required of him as a member of the bar; and provided that he not use the business of writing insurance as a means of obtaining law business, nor the fact that he is a member of the bar to obtain insurance business.