Is it illegal to pay or receive a referral fee for life insurance business to an unlicensed recipien? If so, to whom should the practice be reported?
Question Details: There is a life insurance agent in Texas who has actively solicted life insurance referrals from an out of state attorney (and maybe other professionals) by offering to pay referral fees. He has even issued a check for payment of such a fee along with an invoice specifiying that the fee was a "referral fee" of a specified percentage. The targeted recipient of the fee does not want to do anything illegal and wants to stop this type of inducement from continuing. Pending a determination of the legality of this issue, the recipient also needs to know what to do with the funds paid.
Insurance Law Law Answers
I am not admitted in Texas or Florida. Clarification: the insurance agent is in Texas. The attorney is admitted and licensed in Florida. I am assuming that the attorney as the recipient is really the one concerned about the legality.
The answer is "maybe." If you as an attorney are concerned about the legality it is best to offer the question for an opinion by the ethics committee in your area. I am attaching a site from the Florida state bar regarding non-legal referrals and financial planners. It may help but it is not on point. The insurance agent needs to be concerned about his license and you yours, not you about his. It is your ethical responsibility that matters here. http://www.floridabar.org/TFB/TFBETOpin.nsf/840090c16eedaf0085256b61000928dc/348cc8a81b9c3cb885256e9e00733373?OpenDocument
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