AGO 1989-064.
Case Date | May 22, 1989 |
Court | Kansas |
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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