Advisory Opinion No. 96-71

Re: The Honorable David E. Bates

A. QUESTION PRESENTED

The petitioner, a Legislator, requests an advisory opinion as to whether he can participate and vote on legislation regulating the sale of insurance by banks and their holding companies given that the Senator is an insurance agent and Rhode Island National Director of the Independent Insurance Agents of America.

B. SUMMARY

The Rhode Island Code of Ethics does not prohibit Senator Bates from participating fully in the debate and vote on legislation regulating the sale of insurance by banks, particularly those provisions currently contained in Senate Bill 3316, given that he is also an insurance agent and Rhode Island National Director of the Independent Insurance Agents of America. However, the petitioner must file a Section 6 notice with the Commission and the Senate detailing his interest and the nature of the potential conflict and describing why, despite the potential conflict, he is able to vote and participate fairly, objectively and in the public interest. This is based on the petitioner's interest not being in substantial conflict with the proper discharge of his duties in the public interest given the importance of the legislation to consumers and that the petitioner cannot reasonably expect to receive a direct monetary gain or loss by reason of his participation in the debate.

C. DISCUSSION

1. Facts

The petitioner, Senator David E. Bates, is also a licensed Rhode Island insurance agent and an officer of A. N. Nunes Agency, Inc., an agency principally involved in the business of selling insurance policies. Senator Bates is also the Rhode Island National Director of the Independent Insurance Agents of America.

The United States Supreme Court recently issued a decision authorizing banks to sell insurance policies. Given the unique nature of banks, Senator Bates anticipates that legislation will be introduced regulating the sale of insurance by banks. This legislation will place limitations on banks in their efforts to sell insurance. Accordingly, the Senator requests an advisory opinion outlining how he may participate in the legislative debate including voting, debating, attending hearings and sessions, attending and testifying at committee meetings and regulatory hearings.

2. Analysis

At issue in this advisory opinion request is whether a Senator who is simultaneously an independent insurance agent and the Rhode Island National Director of the Independent Insurance Agents of America may participate and vote on matter relating to the regulation of the sale of insurance by banks. The Rhode Island Code of Ethics provides that the petitioner shall not use his public position or confidential information received through holding any public office to obtain financial gain, other than that provided by law. R.I. Gen. Laws § 36-14-5(a). The Code of Ethics also provides that a public official has an interest in substantial conflict with the proper discharge of his or her duties or employment in the public interest and of his or her responsibilities as prescribed by law, if he has reason to believe he will derive a direct monetary gain by reason of his official activity, pursuant to R.I. Gen. Laws § 36-14-7(a). Additionally, Commission Regulation 36-14-7003, the public forum exception, allows the petitioner to publicly express his own view points in a public forum on any matter of general public interest or any matter which directly affects him.

The Commission recognizes that legislators are drawn from various occupational backgrounds and professions and bring valuable expertise to the Legislature based on their occupations and professional affiliations, but also that it is imperative that legislator's decisions are guided by the public interest. In this matter, the proposed legislation will have a significant impact on consumers. However, the nature of the legislative process raises the concern that the petitioner is participating in the discussion of legislation impacting the insurance industry and himself and therefore finds himself in a conflict of interest within the meaning of the Code. Notwithstanding the potential for conflict, the Commission finds that the petitioner's interest is not in substantial conflict with the proper discharge of the his duties in the public interest given the importance of the legislation to consumers and that the petitioner cannot reasonably expect to receive a direct monetary gain or loss by reason of his participation in the debate. This opinion is limited to provisions such as those currently contained in SB 3316. The petitioner should file a Section 6 notice with the Ethics Commission and with the Senate outlining his interest and the nature of the potential conflict and describing why, despite the potential conflict, he is able to vote and participate fairly, objectively and in the public interest.

Code Citations:

36-14-5(a)

36-14-6

36-14-7(a)

36-14-7003

Keywords:

business interest

private employment

public forum exception

recusal