An administrative law judge in Florida has dismissed a life settlement firm’s claim that state regulators have no right to demand records of its out-of-state business.
Suzanne Hood, a judge in the state’s Division of Administrative Hearings, rejected the contention of Coventry First L.L.C., Fort Washington, Pa., that the Florida Office of Insurance Regulation had failed to follow statutory requirements when it set up a procedure for demanding the business records of settlement firms operating in the state.
The Florida OIR maintained in the case that its procedures for examining viatical cases were an internal management process and hence exempt from state requirements for agency rule-making.
Hood has agreed with the Florida OIR. The statute that gives the Florida OIR authority to examine all books and records “does not differentiate between in-state and out-of-state records,” Hood says.
An attorney for Coventry says the company has filed a notice with Florida’s appellate court that it will appeal the decision.
“The method the [OIR] is using is an unadopted rule,” says Nat Shapo, a lawyer with Katten Muchin Rosenbaum L.L.C., Chicago, which represents Coventry in the case. “It’s clear that no rule has been adopted. And, if it’s unadopted, it’s a violation of the statute.”
Shapo, a former Illinois insurance department director, says Coventry welcomes Florida OIR review of Florida transactions.
“The issue we’ve objected to is the review of non-Florida transactions by Florida regulators,” Shapo says. “Coventry has cooperated and will continue to cooperate for any transactions in the regulator’s state.”