I honestly don't know...and your attorney friend may be right.  I would think it would come more from the fee between Agent and Underwriter rather than enclosed within the Title Insurance fee.  As far as what's legal and what's not; what's required legally by Agents - each State's Division of Insurance would be the standard for each state. It has been so many years since I dealt with Underwriters - I am not sure.  I think my first step would be contacting the Division of Insurance within the States that you are considering operating in...get their feedback.  And definitely contact an attorney who is familiar with real estate law.  I am surprised there hasn't been more of a response on the board to your enquiries!

Ellen