Reg. Change Proposed For Prepaid Legal Services
While little known, prepaid legal service plans let people pay a monthly fee to receive basic legal support such as contract review, help battling traffic tickets or representation during a tax audit. The plans can also provide for more in-depth work at reduced cost.
Of Counsel
"The average family or business can't afford to have an attorney on retainer," said Rep. James Eldridge of Acton, who is sponsoring the bill to move regulation of prepaid legal services from the state's Division of Insurance to the Division of Professional Licensure.
Pre-Paid Legal Services Inc., the Oklahoma-based company that is pushing for the change, argues that insurance regulations currently handcuff its operations in the state, where it has a network of independent lawyers and law firms to provide services to its clients.
Kathy Pinson, Pre-Paid's vice president of regulatory compliance, said the company's salespeople must get a property and casualty license, a requirement that is not relevant to the services it provides and that makes it difficult to hire sales staff.
With more salespeople, the company would find it easier to market itself, including through businesses, which can offer the plans as a benefit to employees.
Currently, whether they buy them on their own or through their jobs, Massachusetts residents get prepaid plans as individuals. But Pinson said the change in regulation would also make it possible to provide a plan aimed at small businesses themselves.
Status Quo
In more than 30 other states, the company sells such plans to companies that are too small to keep an attorney on retainer.
But the Massachusetts Bar Association argues that prepaid legal services are an insurance product - a plan that provides services in the case of an unexpected occurrence - and that means the Division of Insurance is the appropriate regulatory body.
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