Nationwide Mutual Insurance Co. may have a valid complaint in its fight with the State Bar of Texas’ Unauthorized Practice of Law Committee on the issue of captive firms, but the issue ultimately should be decided in state court, the 5th U.S. Circuit Court of Appeals ruled on Feb. 20.
The decision is the result of a 2-year-old suit filed by Ohio-based Nationwide Mutual — one of several major insurance companies being investigated by the UPLC over the use of so-called “captive firms” to defend policyholders against Texas suits. Captive firms essentially are law offices staffed by lawyers who are employees of insurance companies but who represent the company’s policyholders.
