State Rules on Disclosure of Lack of Professional Liability Insurance

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1 To: ABA Entities and other interested parties Date: November 14, 2003 From: Re: Robert D. Welden, Chair ABA Standing Committee on Client Protection State Rules on Disclosure of Lack of Professional Liability Insurance Alaska, New Hampshire, Ohio and South Dakota have amended their Model Rules of Professional Conduct to require lawyers to disclose to their clients whether they maintain professional liability insurance. Delaware, Michigan, Nebraska, North Carolina and Virginia requires lawyers to disclose on their annual registration form whether they maintain professional liability insurance. In Nebraska and Virginia, that information is made available to a potential client if the client telephones the bar association and requests it or goes to the bar association s website. Oregon is the only jurisdiction in the United States that requires lawyers to maintain professional liability insurance. The various state disclosure rules are attached.

2 RULE 1.4 COMMUNICATION ALASKA COURT RULES ALASKA RULES OF PROFESSIONAL CONDUCT (a) A lawyer shall keep a client reasonably informed about the status of a matter undertaken on the client's behalf and promptly comply with reasonable requests for information. (b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation. (c) A lawyer shall inform an existing client in writing if the lawyer does not have malpractice insurance of at least $100,000 per claim and $300,000 annual aggregate and shall inform the client in writing at any time the lawyer's malpractice insurance drops below these amounts or the lawyer's malpractice insurance is terminated. A lawyer shall maintain a record of these disclosures for six years from the termination of the client's representation. [Adopted effective July 15, Amended effective January 15, 1999; effective April 15, 2000.] Alaska Comment Subsection (c) does not apply to lawyers in government practice or lawyers employed as in-house counsel. Lawyers may use the following language in making the disclosures required by this rule: (1) no insurance: "Alaska Rule of Professional Conduct 1.4(c) requires that you, as the client, be informed in writing if a lawyer does not have malpractice insurance of at least $100,000 per claim and $300,000 annual aggregate and if, at any time, a lawyer's malpractice insurance drops below these amounts or a lawyer's malpractice insurance coverage is terminated. You are therefore advised that (name of attorney or firm) does not have malpractice insurance coverage of at least $100,000 per claim and $300,000 annual aggregate." (2) insurance below amounts: "Alaska Rule of Professional Conduct 1.4(c) requires that you, as the client, be informed in writing if a lawyer does not have malpractice insurance of at least $100,000 per claim and $300,000 annual aggregate and if, at any time, a lawyer's malpractice insurance drops below these amounts or a lawyer's malpractice insurance coverage is terminated. You are therefore advised that (name of attorney or firm)'s malpractice insurance has dropped below at least $100,000 per claim and $300,000 annual aggregate." (3) insurance terminated: "Alaska Rule of Professional Search Term End Conduct 1.4(c) requires that you, as the client, be informed in writing if a lawyer does not have malpractice insurance of at least $100,000 per claim and $300,000 annual aggregate and if, at any time, a lawyer's malpractice insurance drops below these amounts or a lawyer's malpractice insurance coverage is terminated. You are therefore advised that (name of attorney or firm)'s malpractice insurance has been terminated." 2

3 2003 Delaware Supreme Court Annual Registration Statement I N S TR U C T I 0 N S - Active Lawyers in PRIVATE PRACTICE in Delaware shall complete: Section I - Registration Section 3 - IOLTA Designation of Lawyer in Event of Death or Incapacity Statement of Status of Malpractice Insurance Coverage Certificate of Compliance Banking and Recordkeeping Section 4 - Assessments - Active Lawyers in CORPORATE or GOVERNMENT PRACTICE or having NO PRACTICE in Delaware, shall complete: Section 1 - Registration Section 2 - Declaration Section 4 - Assessments - Lawyers requesting INACTIVE STATUS shall complete: Section I - Registration Section 2 - Declaration Section 4 Assessments Section 5 - Application for a Certificate of Inactive Status - Remember to sign your Annual Registration Statement. Your Annual Registration Statement is not filed unless it is signed. An unsigned Annual Registration Statement will be returned to you for signature. - Law firms with more than one lawyer may issue, in the law firm s discretion, one check for all of the lawyers in the film. If this is done, a cover letter must be enclosed listing the assessment break-down for each attorney. - Return your Annual Registration Statement with check to: Supreme Court of Delaware P.O. Box 476 Dover, DE If necessary to meet the February 3, 2003 deadline, your Annua1 Registration Statement with check may be hand-delivered to any of the Supreme Court Offices. DUE DATE: FEBRUARY There will be a late assessment of $50 for any Annual Registration Statement received after the due date. 3

4 2003 DELAWARE SUPREME COURT ANNUAL REGISTRATION STATEMENT SECTION 1: To be completed and signed by all lawyers. Name: _ Supreme Court ID #: Date of Birth Firm/Office Name: Street: P.O. Box: City: State: _Zip: County: Telephone: { } Fax ( } Internet Address: Home Address: City: State: Zip: County: _ Telephone: {_}_ Admitted to Delaware Bar (Month & Year): _ List all other jurisdictions, including federal courts or administrative agencies, to which you are admitted to practice law: Your current standing in those jurisdictions: _ VERIFICATION AND DESIGNATION OF CLERK AS AGENT FOR SERVICE OF PROCESS In the event that personal service cannot be made upon me, I hereby consent to the appointment of the Clerk of the Supreme Court as my agent upon whom service of process may be made for all actions, including disciplinary actions, that may arise out of my practice of law in the State of Delaware. I hereby certify that all information contained in this Annual Registration Statement is true and correct. SIGNATURE: _ DATE: 4

5 SECTION 2: To be completed by lawyers in corporate or government practice or lawyers having no practice in Delaware or lawyers seeking Inactive Status. DECLARATION THAT RULE 1.l5 OF THE DELAWARE LAWYERS' RULES OF PROFESSIONAL CONDUCT IS INAPPLICABLE (1)_ I hereby declare that my entire compensation derived from the practice of law is received in my capacity as an employee or independent contractor handling legal matters of a corporation( s) or of an agency of the federal, state, or local government, and I am not responsible for any client's funds or property, other than funds or property belonging to my employer. (2) I hereby declare that 1 am not engaged in the practice of law in Delaware. Please continue to Section 4 (Assessments). Attorneys seeking INACTIVE STATUS, please complete Section 4 (Assessments) m.4 Section 5 (Application for Inactive Status). SECTION 3: To be completed by lawyers engaged in the private practice of law in Delaware. STATEMENT OF STATUS IN DELAWARE INTEREST ON LAWYER TRUST ACCOUNTS (IOLTA) I (my firm) have (has) enrolled in the Delaware IOLTA program. I (my firm) have (has) opted out of the Delaware IOLTA program. I (my firm) hereby opt(s) out of the Delaware IOLTA program. DESIGNATION OF LAWYER IN EVENT OF DEATH OR INCAPACITY In the event of my death or incapacity, I have made arrangements for another lawyer who is capable of conducting my legal practice to protect the interests of my clients. Yes _ No If the answer is yes, please provide the name of the lawyer or law firm: STATEMENT OF STATUS OF MALPRACTICE INSURANCE COVERAGE I (my firm) have (has) malpractice insurance coverage. Yes No 5

6 Name Supreme Court ID # 2003 CERTIFICATE OF COMPLIANCE I am in compliance with the following specific requirements of the Delaware Lawyers Rules of Professional Conduct A YES answer indicates you are in compliance. A NO answer indicates you are not in compliance. If appropriate, you may answer N/A (not applicable). YES/NO 1) A separate bank account, designated Rule 1.15A Attorney Trust Account or Rule 1.15A Attorney Escrow Account, for bank identification purposes only, is used only for funds held in a fiduciary capacity. 2) All attorney trust or escrow bank accounts are maintained only in financial institutions that have agreed to comply with the requirements set forth in Rule 1.15A. Also, forms for each attorney trust or escrow account, designating these accounts as Rule 1.15A Attorney Trust Account or Rule 1.15A Attorney Escrow Account, have been completed and forwarded to the respective financial institution. 3) A separate bank account, designated Attorney Business Account or Attorney Operating Account, is maintained for non-fiduciary funds. 4) Cash receipt and cash disbursement journals are maintained for each bank account for the recording of fiduciary and non-fiduciary transactions. NOTE: If using a manual system, transaction columns must be totaled and balanced each month. Answer YES only if transaction columns are totaled and balanced each month, otherwise, answer NO. Computer system users answer "N/A". 5) If using a manual system, and a general ledger is not maintained, a reconciled monthly cash ba1ance for each bank account is obtained by agreeing totals from the cash receipts and cash disbursement journals to the ending check register balance. NOTE: Since this reconciliation procedure is not required if using a computer accounting system, computer system users answer "N/A". 6) Check register balances for all bank accounts are reconciled monthly to bank statement balances. 7) With respect to trust or escrow accounts: a) A subsidiary ledger is maintained with a separate account for each client in which cash receipt and cash disbursement transactions and monthly balances are recorded. b) Monthly listings of client balances are prepared showing client name. balance and the total of all client balances. NOTE: See (c) below if a negative balance appears on this listing. 6

7 Certificate of Compliance (Cont'd) YES/NO c) If, through error, any funds disbursed for a client have been in excess of funds received from that client, resulting in a negative client balance, a timely transfer was made from the operating or business account to cover the excess disbursement NOTE: If there were no negative balances, answer N/A. d) The reconciled end-of-month cash balance agrees with the total of the client balance listing. e) There are no unidentified client funds. f) If any funds, which should have been disbursed, have remained in the trust or escrow account for an unreasonable length of time, steps are being taken to determine proper disbursement. NOTE: If all funds were disbursed on a timely basis, answer "N/A." g) If any attorney funds are in trust or escrow accounts to cover bank service charges, they are separately accounted for and the total is no more than $500. h) All earned fees are transferred to the attorney's operating or business account on a timely basis. NOTE: Earned fees left in trust or escrow accounts longer than necessary represents commingling of funds. 8) If a separate bank account is maintained for real estate settlement transactions and client funds have been received but not disbursed then: a) A monthly listing is prepared showing client name, balance, and total of all client balances. b) This total agrees with the reconciled cash balance. NOTE: Answer "N/A" if a separate real estate account is not used or all funds received are disbursed prior to the end of the month. 9) If any clients are required to pay some or all of the fee in advance of undertaking the representation (retainers), then: a) A written statement is provided to the client which states that the fee is refundable if not earned and, also, states the basis under which the fee shall be considered to have been earned. b) All unearned fees are retained in the trust or escrow account. c) A statement of fees earned, cost advances recovered and the balance of unearned fees is provided to the client when such funds are withdrawn from the trust or escrow account. NOTE: Answer "N/A" to (a) - (c) if retainers are not accepted. 7

8 10) All federal, state and local payroll, gross receipts and income taxes have been filed and paid on a timely basis. NOTE: If answering "NO", provide specific information on an attached letter, such as, which taxes were Dot filed or paid, the amounts of taxes due and the periods involved. If any of the above items have been answered "NO," indicating non-compliance, you must attach a letter explaining the reasons for the non-compliance, and the date you will be in compliance. Make certain to provide enough detail to adequately describe the problem. This Certificate of Compliance and the Banking and Recordkeeplng section (page 5) are being completed in reliance upon the certification of the managing partner of my law firm that my inn is in compliance. Yes No Name of Managing Partner: The provisions listed above are not intended to be all-inclusive. The Delaware Lawyers Rules of Professional Conduct should be reviewed in their entirety to make certain you are in compliance with all of their provisions. 8

9 BANKING AND RECORDKEEPING (1) List the names of all banks or other places in which you or your firm maintain accounts which an attorney or an employee of your firm may draw on and in which funds of clients or other persons not associated with your firm are placed, the title of each account, and the account number of each account. (This question relates to escrow accounts.) (Yes or No) (a) Name of Bank (b) Name of Account (c) Account Number (d) IOLTA a/c (2) List the names of all banks or other places in which you or your fird1 maintain accounts (other than those listed response to paragraph (1) above) connected with your practice of law which you or some member of your firm has power to control, draw on, or deposit in. (This question relates to firm accounts.) (a) Name of Bank (b) Name of Account (c) Account Number (3) List the address or addresses where you or your firm s books of accounts and records required by the Court to be kept by members of the Bar are located, and give the name and office address of the person or persons who supervise the preparation and maintenance of such books of accounts and records on your or your firm s behalf. Address (es) where books of accounts and records are maintained: 1) 2) 3) Name(s) and address(es) of person(s) who prepare(s) and maintain(s) books of accounts and records: 1) 2) 3) Please continue to Section 4 (Assessments). 9

10 SECTION 4. To be completed by all lawyers. ASSESSMENTS (1) Admitted to Delaware Bar more than 10 years as of January 1, (Pay this rate if you were admitted before January 1, 1993.) Annual Registration $ Lawyers Fund for Client Protection $ Office of Disciplinary Counsel $ Mandatory Continuing Legal Education $ Enclose one check in the amount of $405 made payable to the Delaware Supreme Court. (2) Admitted to Delaware Bar more than 5 years but less than 10 years as of January 1, (Pay this rate If you were admitted after January 1, 1993 but before January 1, 1998.) Annual Registration $ Lawyers' Fund for Client Protection $ Office of Disciplinary Counsel $ Mandatory Continuing Legal Education $ Enclose one check in the amount of $285 made payable to the "Delaware Supreme Court." (3) Admitted to Delaware Bar less than 5 years as of January 1,2003. (Pay this rate if you were admitted after January 1, 1998.) Annual Registration $ Lawyers' Fund for Client Protection $ Office of Disciplinary Counsel $ Mandatory Continuing Legal Education $ Enclose one check in the amount of $210 made payable to the "Delaware Supreme Court." (4) Presently employed by government or corporation on a full-time basis and maintaining no private practice whatsoever t regardless of year admitted to the Delaware Bar. Annua1 Registration Lawyers' Fund for Client Protection $ Office of Disciplinary Counsel $ Mandatory Continuing Legal Education $ Enclose one check in the amount of $190 made payable to the "Delaware Supreme Court." (5) Presently employed by a Delaware Court as a Justice of the Peace, Court Commissioner, or Master on a full-time basis and maintaining no private practice whatsoever, regardless of year admitted to the Delaware Bar. Annual Registration $ Mandatory Continuing Legal Education $ Enclose one check in the amount of $45 made payable to the "Delaware Supreme Court." (6) Applying for Certificate of Inactive Status. Annual Registration $ Application Assessment $ Enclose one check in the amount of $75 made payable to the "Delaware Supreme Court" and your completed Application for a Certificate of Inactive Status (Section 5). (7) Applying for Certificate of Retirement. No Assessments. Send letter of request to the Court Clerk. 10

11 SECTION 5: To be completed by lawyers seeking Inactive Status. DELAWARE SUPREME COURT 2003 APPLICATION FOR A CERTIFICATE OF INACTIVE STATUS To the Supreme Court: Pursuant to Supreme Court Rule 69(d)(i), I herewith apply for a Certificate of Inactive Status and state that I am not actively engaged in the practice of law in Delaware. I have completed and returned my 2003 Annual Registration Statement. I certify that there are no charges pending or threatened against me before any court, the Board on Professional Responsibility, or any similar disciplinary agency in this or any other jurisdiction. I further certify that I do not know of any facts respecting my conduct which would result in the filing of charges or disciplinary action against me. _ Signature _ Print Your Name _ Address _ 2003 CERTIFICATE OF INACTIVE STATUS The Supreme Court of Delaware, upon the representations contained in the above application for this Certificate, hereby issues a Certificate of Inactive Status to the above named applicant as a person who is not actively engaged in the practice of law in Delaware under Supreme Court Rule 69(d). Date: Clerk 11

12 On order of the Court, the State Bar of Michigan shall include in the annual dues notice, beginning with the notice issued for fiscal year , a request for information regarding the following matters: 1. Other jurisdictions in which the member is or has been licensed to practice law, and whether the member has received any discipline in those jurisdictions. 2. The malpractice insurance covering the member. 3. Felony and misdemeanor convictions in any jurisdiction after the date the member received a license to practice law in any jurisdiction. The member shall be required to provide the requested information and to verify that, to the best of the member's knowledge, the information is accurate. On further order of the Court, the State Bar of Michigan also shall provide in the annual dues notice, beginning with the notice issued for fiscal year , an opportunity for members to make voluntary tax-deductible contributions of $5 or some other amount to benefit the Michigan Supreme Court Learning Center. 12

13 REGULATION DISCLOSURES (Michigan Registration Form) This section must be completed and signed to receive your bar card. 1. Trust Account Compliance (check only one box for this question) a. I maintain, either personally or through my firm, an IOLTA account, as follows: (1) I/we maintain a pooled IOLTA account only with the net interest payable to the Michigan State Bar Foundation. MRPC 1.15(d)(1). (2) I/we maintain both an IOLTA account under MRPC 1.15(d)(1) with interest payable to the Foundation and trust account(s) under MRPC 1.15(d)(2) with interest payable to the clients. (3) I/we maintain a pooled IOLTA account or Trust account in a state other than Michigan. b. Neither I nor my firm (if applicable) maintains an IOLTA account because: (1) All client funds which come into my/our possession are deposited in trust accounts with interest payable to the clients. MRPC 1.15(d)2). (2) I practice law but do not receive, maintain or disburse any client or third party funds. (3) I am a sitting judge or do not practice law and do not receive, maintain or disburse any client or third party funds. 2. Please list other jurisdictions where you are or ever have been licensed to practice law: Jurisdiction(s) Year Admitted Status active inactive suspended disbarred other active inactive suspended disbarred other active inactive suspended disbarred other **If you have received any discipline in other jurisdiction(s), please provide details in a separate letter. 3. Malpractice insurance (check only one box for this question) (a) I maintain, either individually or through my firm, malpractice insurance. (b) I do not maintain malpractice insurance because I do not have private clients. (e.g., judge, retired, in-house counsel, prosecutor, government lawyer, etc.) (c) I do not maintain malpractice insurance, but I do have private clients and/or a possible exposure to malpractice actions. 4. Have you been convicted of any misdemeanor or felony in any jurisdiction after the date you received a license to practice law in any jurisdiction? yes no If yes, please consult MCR and provide details in a separate letter. I certify that the above regulatory disclosures are true and correct to the best of my knowledge. Date: _ Signature 13

14 Nebraska Advance Sheets RULE AMENDMENTS On March 19 and 26, 2003, the Nebraska Supreme Court adopted the following amendments to the Rules Creating, Controlling, and Regulating Nebraska State Bar Association: RULES CREATING, CONTROLLING, AND REGULATING NEBRASKA STATE BAR ASSOCIATION For the advancement of the administration of justice according to the law; for the advancement of the honor and dignity of the legal profession, and encouragement of cordial intercourse among the members thereof; and for the improvement of the service rendered the public by the Bench and Bar, the rules of this Court organizing and forming the NEBRASKA STATE BAR ASSOCIATlON are hereby amended and restated, effective November 1, 2003, January 2, 1998, to provide as follows: Article III MEMBERSHIP 1. Requirements. All persons who, on the date that these rules go into effect, are admitted to the practice of law in this State, by order of the Nebraska Supreme Court, shall constitute the members of this Association, subject to due compliance with the requirements for membership hereinafter set forth. 2. Classes. Members of this Association shall be divided into four classes, namely: Active members, Inactive members, Law Student members, and Emeritus members. a. All members who are licensed to engage in the active practice of law in the State of Nebraska, who do not qualify for and apply for Inactive membership status, and who are not Law Student members, shall be Active members. b. Any member who is not actively engaged in the practice of law in the State of Nebraska, or who is a nonresident of the State of Nebraska and not actively engaged in the practice of law in Nebraska, and who is not an Emeritus member, may, if he or she so elects, be placed in Inactive membership status. A member desiring to be placed in Inactive membership status shall file written application therefore with the Secretary and, if otherwise qualified, shall be placed in such inactive status classification. No Inactive members shall practice law in Nebraska, or vote or hold office in this Association. Any Inactive member may, on filing application with the Secretary and upon payment of the required dues, and compliance with such requirements as may be imposed by the Supreme Court to show fitness to engage in the active practice of law in this State, become an Active member. c. Any member who attained the age of 75 years of age during the dues year being billed or has been actively engaged in the practice of law in the State of Nebraska for 50 years or more during the dues year being billed may, if he or she so elects, be placed in an Emeritus membership status. d. Except for the right reserved by law to litigants to prose cute or defend a cause in person, or as provided elsewhere in these rules, no person other than an Active member of this Association shall engage in the practice of law in this State, or in any manner hold himself or herself out as authorized or qualified to practice law in this State. e. Nothing in these rules shall be construed to bar any Active member from the practice of law pursuant to the provisions of any rules of the Supreme Court authorizing the practice of law by a professional service corporation or a limited liability organization, subject to the limitations provided by such rules. 14

15 f. In order to make information available to the public about the financial responsibility of each active member of this Association for professional liability claims, each such member shall, upon admission to the Bar, and with each application for renewal thereof, submit the certification required by this rule. For purposes of this rule, professional liability insurance means: (i) The insurance shall insure the member against liability imposed upon the member arising out of a professional act, error, or omission in the practice of law. (ii) Such insurance shall insure the member against liability imposed upon the member by law for damages arising out of the professional acts, errors, and omissions of all nonprofessional employees employed by the member. (iii) The policy may contain reasonable provisions with respect to policy periods, territory, claims, conditions, exclusions, and other matters. (iv) The policy may provide for a deductible or self-insured retained amount and may provide for the payment of defense or other costs out of the stated limits of the policy. (v) A professional act, error, or omission is considered to be covered by professional liability insurance for the purpose of this rule if the policy includes such act, error, or omission as a covered activity, regardless of whether claims previously made against the policy have exhausted the aggregate top limit for the applicable time period or whether the individual claimed amount or ultimate liability exceeds either the per claim or aggregate top limit. Each active member shall certify to this Association on or before January 1 of each year: a) whether or not such member is currently covered by professional liability insurance, other than an extended reporting endorsement: b) whether or not such member is engaged in the private practice of law involving representation of clients drawn from the public: c) whether or not such member is a partner, shareholder, or member in a domestic professional organization as defined by the rule governing Limited Liability Professional Organizations, and d) whether or not the active member is exempt from the provisions of this rule because he or she is engaged in the practice of law as a full-time government attorney or in-house counsel and does not represent clients outside that capacity. The foregoing shall be certified by each active member of this Association in such form as may be prescribed by this Association and shall be made available to the public by such means as may be designated by the House of Delegates. Failure to comply with this rule shall result in suspension from the active practice of law until such certification is received. An untruthful certification shall subject the member to appropriate disciplinary action. All members shall notify the Secretary in writing within 30 days if a) professional liability insurance providing coverage to the member has lapsed or is not in effect, or b) the member acquires professional liability coverage as defined by this rule. All certifications not received b): April 1 of the current calendar year shall be considered delinquent. The Secretary shall send written notice, by certified mail to each member then delinquent in the reporting of professional liability insurance status, which notice shall be addressed to such member at his or her last reported address, and shall notify such member of such delinquency. All members who shall fail to provide the certification within 30 days thereafter shall be reported to the Supreme Court by the Secretary and the Supreme Court shall enter an order to show cause why such member shall not be suspended from membership in this Association. The Supreme Court shall enter such an order as it may deem appropriate. If an order of suspension shall be entered, such party shall not practice law until restored to good standing. This rule shall not affect this Association, its rules, procedures, structure. or operation in any way; nor shall the adoption of this rule make this Association, its officers, directors, representatives, or membership liable in any way to any person who has suffered loss by error or 15

16 omission of a lawyer. This rule is adopted solely for the purposes stated herein and not for the purpose of making this Association, its officers, directors, representatives, or membership insurers or guarantors for clients with respect to the lawyer-client relationship. This rule does not create a claim against this Association for failure to provide accurate information or a report on the insured status of any lawyer, or for implementation of any provision of these rules. MANDATORY REPORTING OF PROFESSIONAL LIABILITY INSURANCE COVERAGE I am engaged in the private practice of law involving representation of clients drawn from the public: Yes No I am currently covered by a professional liability insurance policy other than an extended reporting & endorsement: Yes No I am currently a member of a professional corporation, limited liability company, or a limited liability partnership and maintain the insurance coverage required by the rule governing Limited Liability Professional Organizations: Yes No I am engaged in the practice of law as a full-time government attorney or in-house counsel and do not represent clients outside that capacity, and therefore, I am exempt from the provisions of this rule. Yes No I hereby certify the truth of the information provided above. Signature of Attorney Date 16

17 New Hampshire Rule 1.17 Rule Disclosure of Information to the Client A lawyer shall inform a client at the time of the client's engagement of the lawyer or at any time subsequent to the engagement of the lawyer if the lawyer does not maintain professional liability insurance in the amounts of at least one hundred thousand dollars per occurrence and three hundred thousand dollars in the aggregate or if the lawyer's professional liability insurance ceases to be in effect. The notice shall be provided to the client on a separate form set forth following this rule and shall be signed by the client. A lawyer shall maintain a copy of the notice signed by the client for five years after termination of representation of the client. The notice required by paragraph (a) of this rule shall not apply to a lawyer who is engaged in either of the following: Rendering legal services to a governmental entity that employs the lawyer; Rendering legal services to an entity that employs the lawyer as in-house counsel. Transitional period. Within thirty days after March 1, 2003, which is the effective date of this rule, a lawyer who does not have professional liability insurance in the amounts set forth in paragraph (a) and who is not exempt from the notice requirements under paragraph (c) shall provide notice to each of the lawyer's clients. The notice shall be provided to each client on a separate form set forth following this rule and shall be signed by the client. NOTICE TO CLIENT Pursuant to Rule 1.17 of the New Hampshire Rules of Professional Conduct, I am required to notify you that I do not maintain professional liability (malpractice) insurance of at least $100,000 per occurrence and $300,000 in the aggregate. (Attorney's signature) CLIENT ACKNOWLEDGEMENT I acknowledge receipt of the notice required by Rule 1.17 of the New Hampshire Rules of Professional Conduct that [insert attorney's name] does not maintain professional liability (malpractice) insurance of at least $100,000 per occurrence and $300,000 in the aggregate. (Client's signature) Date: 17

18 North Carolina-Rules and Regulations SUBCHAPTER A Organization of the North Carolina State Bar Section.0200 Membership - Annual Membership Fees.0204 Certificate of Insurance Coverage (a) Before July 1 of each year, each active member shall submit a certificate to the secretary of the North Carolina State Bar on a form provided by the secretary stating whether the member is engaged in the private practice of law and, if so, whether the member is covered by a policy of professional liability insurance issued by an insurer legally permitted to provide coverage in North Carolina. The certificate may be submitted in electronic form or in an original document. If, after having most recently submitted a certificate of insurance coverage asserting that the member is covered by a policy of professional liability insurance coverage, a member for any reason ceases to be insured, the member shall immediately advise the North Carolina State Bar of the changed circumstances in writing. (b) Any active member who fails to submit the certificate of insurance coverage required above in a timely fashion may be suspended from active membership in the North Carolina State Bar in accordance with the procedures set forth in Rule.0903 of subchapter D. (c) Any member failing to submit a certificate of insurance coverage in a timely fashion shall pay a late fee of $30 to defray the administrative cost of enforcing compliance with this rule; provided, however, that no late fee associated with such failure shall be charged if the member is also liable for a late fee in regard to failure to pay the annual membership fee or Client Security Fund assessment for the same year in a timely fashion. (d) Notwithstanding the foregoing: (1) A person licensed to practice law in North Carolina for the first time by examination shall not be required to file a certificate of insurance coverage during the year in which the person is admitted; (2) A person licensed to practice law in North Carolina serving in the armed forces, in a legal or nonlegal capacity, shall not be required to file a certificate of insurance coverage for any year in which the member is on active duty in military service; (3) A person licensed to practice law in North Carolina who files a petition for inactive status on or before December 31 of a given year shall not be required to file a certificate of insurance coverage for the following year if the petition is granted. A petition shall be deemed timely if it is postmarked on or before December 31. History note: Statutory authority G.S Adopted October 1,

19 TEXT OF OHIO'S AMENDED DR (A) A lawyer shall inform a client at the time of the client's engagement of the lawyer or at any time subsequent to the engagement if the lawyer does not maintain professional liability insurance in the amounts of at least one hundred thousand dollars per occurrence and three hundred thousand dollars in the aggregate or if the lawyer's professional liability insurance is terminated. The notice shall be provided to the client on a separate form set forth following this rule and shall be signed by the client. (B) A lawyer shall maintain a copy of the notice signed by the client for five years after termination of representation of the client. (C) The notice required by division (A) of this rule shall not apply to a lawyer who is engaged in either of the following: (1) Rendering legal services to a governmental entity that employs the lawyer; (2) Rendering legal services to an entity that employs the lawyer as in-house counsel." 19

20 SOUTH DAKOTA CODE TITLE 16. COURTS AND JUDICIARY CHAPTER POWERS AND DUTIES OF ATTORNEYS APPENDIX TO CHAPTER MODEL RULES OF PROFESSIONAL CONDUCT CHAPTER 1--CLIENT -LAWYER RELATIONSHIP Rule 1.4. Communication (a) A lawyer shall keep a client reasonably informed about the status of a matter and promptly comply with reasonable requests for information. (b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation. (c) If a lawyer does not have professional liability insurance with limits of at least $100,000, or if during the course of representation, the insurance policy lapses or is terminated, a lawyer shall promptly disclose to a client by including as a component of the lawyer's letterhead, using the following specific language, either that: (1) "This lawyer is not covered by professional liability insurance;" or (2) "This firm is not covered by professional liability insurance." (d) The required disclosure in 1.4(c) shall be included in every written communication with a client. (e) This disclosure requirement does not apply to lawyers who are members of the following classes: SDCL (1), (3), (4) and full-time, in-house counsel or government lawyers, who do not represent clients outside their official capacity or in-house employment. Comment The 1998 amendments establish that the absence of professional liability insurance is a material fact which must be disclosed to clients. The disclosure shall be made at the inception of the attorney-client relationship, or promptly thereafter. Further, if a lawyer has liability insurance and allows it to lapse or if the policy is terminated, there is an affirmative duty to make the disclosure to all clients with active files. The rule provides for uniform disclosure language and mandates that the written disclosure shall be a component of the lawyer's letterhead. Since the rule mandates disclosure only to the client, it necessarily means that lawyers without malpractice insurance will have to maintain two sets of letterhead - one for communications with the client and another for all other letters. Component of the letterhead means pre-printed. In other words, when a lawyer prepares his or her letterhead for printing, the disclosure must appear on the face of the letterhead using the precise language provided in 1.4(c)(1) or (2). It should be noted that Rule 7.5 relating to a lawyer's letterhead requires that this disclosure be printed in black ink and in a type size no smaller than used for printing of the lawyer's name on the letterhead. Amended by Laws 1999, c. 271 (Sup.Ct. Rule 98-35), eff. Jan. 1,

21 SOUTH DAKOTA CODE TITLE 16. COURTS AND JUDICIARY CHAPTER POWERS AND DUTIES OF ATTORNEYS APPENDIX TO CHAPTER MODEL RULES OF PROFESSIONAL CONDUCT CHAPTER 7--INFORMATION ABOUT LEGAL SERVICES Rule 7.5. Firm Names and Letterheads. (a) A lawyer shall not use a firm name, letterhead or other professional designation that violates Rule 7.1. A trade name may be used by a lawyer in private practice if it does not imply a connection with a government agency or with a public or charitable legal services organization and is not otherwise in violation of Rule 7.1. (b) A law firm with offices in more than one jurisdiction may use the same name in each jurisdiction, but identification of the lawyers in an office of the firm shall indicate the jurisdictional limitations on those note licensed to practice in the jurisdiction where the office is located. (c) The name of a lawyer holding a public office shall not be used in the name of a law firm, or in communications on its behalf, during any substantial period in which the lawyer is not actively and regularly practicing with the firm. (d) Lawyers may state or imply that they practice in a partnership or other organization only when that is the fact. (e) The disclosure required in Rule 1.4(c)(1) or (2) shall be in black ink with type no smaller than the type used for showing the individual lawyer's names. COMMENT: Rule 7.5 (e) establishes the requirements for the letterhead component for all lawyers required to make the disclosure of the absence of professional liability insurance. While a lawyer may choose any color of ink for his or her letterhead, the disclosure component must be in black ink. The intent of this requirement is to avoid, for example, a lawyer selecting yellow bond paper for letterhead and printing the mandated disclosure in yellow ink. Further, recognizing the great variance of letterhead styles, rather than mandating a minimum type size, the rule requires that the disclosure be printed with type size no smaller than the type size used to print the lawyer's name. If a lawyer utilizes letterhead that omits the lawyer's name, then the disclosure shall be printed in type size reasonably necessary to comply with the disclosure requirement. Although not required, it is anticipated that most lawyers will prepare letterhead with the disclosure appearing centered and at the bottom of the letterhead. Amended by Laws 1999, c. 273 (Sup.Ct. Rule 98-37), eff. Jan. 1,

22 Rules of the Virginia Supreme Court VA R S CT PT 6 4 Par. 18 PARAGRAPH 18. FINANCIAL RESPONSIBILITY In order to make available to the public information about the financial responsibility of each active member of the Virginia State Bar for professional liability claims, each such member shall, upon admission to the Bar, and with each application for renewal thereof, submit the certification required herein or obtain a waiver for good cause shown. The active member shall certify to the Bar on or before July 31 of each year: a) whether or not such member is currently covered by professional liability insurance, other than an extended reporting endorsement; b) whether or not such member is engaged in the private practice of law involving representation of clients drawn from the public; and c) the date, amount, and court where rendered, of any unsatisfied final judgment(s) against such member, or any firm or professional corporation in which he or she has practiced, for acts, errors, or omissions (including, but not limited to, acts of dishonesty, fraud, or intentional wrongdoing) arising out of the performance of legal services by such member. The foregoing shall be certified by each active member of the Virginia State Bar in such form as may be prescribed by the Virginia State Bar and shall be made available to the public by such means as may be designated by the Virginia State Bar. Failure to comply with this Rule shall subject the active member to the penalties set forth in paragraph 19 herein. An untruthful certification shall subject the member to appropriate disciplinary action. "Good cause shown" as used herein shall include illness, absence from the Commonwealth of Virginia, or such cause as may be determined by the Executive Committee of the Virginia State Bar whose determination shall be final. Any determination by the Executive Committee may be reviewed by the Supreme Court upon request of the member seeking a waiver. [Amended effective July 1, 1989; January 1, 1990; April 1, 1990.] 22