AGO 1989-064.

Case DateMay 22, 1989
CourtKansas
Kansas Attorney General Opinions 1989. AGO 1989-064. May 22, 1989ATTORNEY GENERAL OPINION NO. 89-64The Honorable Debara K. SchaufState Representative Eighty-First District State Capitol Room 174-W Topeka, Kansas 66612 Re: Insurance--Regulation of Certain Trade Practices--Unfair Methods of Competition or Unfair and Deceptive Acts or Practices; Title Insurance Synopsis: "Gross operating revenue," as that term is used in 1989 House Bill No. 2502, includes revenue received from transactions other than title insurance. For purposes of determining whether 20% of gross operating revenue received in the previous six months is derived from controlled business, revenue received from transactions involving land sales in counties populated by 10,000 or less is not included. Since the prohibitions contained in the act do not substantially impair obligations under existing title insurance contracts, the act does not violate the contracts clause of the United States Constitution. The distinction between counties having a population of 10,000 or less and those having a population of more than 10,000 does not create an impermissible classification. Finally, the rule-making authority granted by the act does not conflict with the statute granting rulemaking authority in areas not affected by the act. Cited herein: K.S.A. 40-1111, as amended by L. 1988, ch. 156, § 19; K.S.A. 40-2404 (Ensley 1986); K.S.A. 1988 Supp. 40-2404, as amended by 1989 House Bill No. 2502; K.S.A. 40-2404a; K.A.R. 40-3-43 (Proposed, not yet published); U.S. Const. Art. I, § 10, cl. 1. * * * Dear Representative Schauf: As Representative for the Eighty-First District, you have requested our opinion concerning numerous issues regarding 1989 House Bill No. 2502 which amends K.S.A. 1988 Supp. 40-2404(14) by adding paragraphs (e) through (g). The issues you raise are as follows: 1) Whether the terms, "any producer of title business," "any associate of such producer," and "controlled business," as used in the amendments, are unclear in their meaning and application and therefore void for vagueness; 2) whether a title insurer who accepts an order and provides some service to an applicant before the title insurer has any reason to believe the applicant was referred by someone having a financial interest in the title insurer results in a violation of the statute; 3) whether "gross operating revenue" as used in subsection (14)(f) refers to revenue received from title insurance only or refers to revenue received from any type of transaction; and, whether this revenue includes all counties or only those counties to which subsection (14)(f) apply; 4) whether the prohibitions contained in the act impair obligations under existing contracts in violation of the United States Constitution, Article 1, Section 10; 5) whether subsection (14)(f) is unconstitutional since it excludes ". . . transactions involving real estate located in a county that has a population as shown by the last preceding decennial census of 10,000 or less"; and 6) whether authorizing the Insurance Commissioner to adopt any necessary regulations expands the Commissioner's authority beyond the already existing statutory provisions in K.S.A. 40-2404(a). The relevant portions of 1989 House Bill No. 2502, § 1, state:
"(e) No title insurer or title agent may accept any order for, issue a
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