Judge says State of Florida can view Coventry’s books
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Coventry Florida Life Settlement Ruling
An administrative law judge in Florida has thrown out a Pennsylvania-based life settlement firm’s request to prevent state regulators from reviewing its records.
Florida Administrative Law Judge Suzanne F. Hood recently issued an order dismissing Coventry First’s attempt to withhold access to its records concerning life settlement transactions.
Coventry First, based in Fort Washington, Pa., is expected to appeal Hood’s ruling to District Court, according to Florida officials.
Florida regulators have been seeking access to Coventry First’s books for more than a year as part of their investigation into viatical settlement or life settlement contracts involving state residents. Coventry First is among the largest life settlement firms operating in an industry struggling to find funding to buy life policies in the wake of the recession.
Hood’s order said viatical exam procedures fall under the classification of “internal management memoranda,” an exception to the rulemaking requirements of Florida law.
She also disagreed with Coventry First’s argument that out-of-state company’s records should be treated differently. “In giving [Florida’s insurance office] authority to examine all books and records, the statute does not differentiate between in-state and out-of-state records,” Hood said in her ruling.
With the life settlement market doubling in value, to $12 billion, Florida regulators have been investigating life settlement firm practices to protect their large senior population.
“This is the second time, in both state and federal court, that Coventry has resisted the office’s efforts to examine its out-of-state viatical settlement contracts that reportedly do not involve Florida residents,” said Florida Insurance Commissioner Kevin McCarty in a statement. “And this is the second legal opinion that affirms our statutory duty to obtain information about Coventry’s overall business practices.”
The court also ruled that although the Florida Viatical Settlement Act does not govern or control the transactions that occur in other states, state regulators have the right to review Coventry’s business records, in part to confirm that the transactions are truly non-Florida transactions.
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Judge says Florida can view Pennsylvania life settlement firm’s books
