TALLAHASSEE, Fla. - Florida Insurance Commissioner Kevin McCarty today announced that a settlement has been reached with Coventry First LLC (Coventry) regarding an investigation into the company's business practices in Florida. The Florida Office of Insurance Regulation (Office) issued a Notice and Order to Show Cause (Order) on May 10 directing the company to respond to allegations of engaging in dishonest practices, including payments to brokers to not seek competitive bids, and payments to brokers not involved with specific transactions.
Coventry responded to the Order, cooperated with the Office's investigation and has agreed to adopt a Business Practice Enhancement Plan (Plan) within 10 days of issuance of the Consent Order finalizing the agreement. Coventry has agreed to support the Office's efforts to promulgate the pending Rule, "Disclosures to Viator of Disbursement," which will enhance standards of viatical settlement regulation in Florida and improve transaction disclosures to consumers. Coventry will pay administrative costs associated with the investigation in the amount of $1.5 million.
"One of the roles of the Office is to protect the interests of consumers while ensuring a fair and equitable environment for regulated entities to conduct business," said McCarty.
"Transparency is the key to encouraging a competitive market."
The Order requires Coventry to submit to an independent annual audit for the next two years to verify Coventry's compliance with the Plan, Consent Order and applicable Florida Statutes and Rules. It also requires Coventry to submit quarterly reports to the Office setting out the aggregate number of transactions it facilitates involving Florida consumers. The settlement forges new ground in the regulatory arena and will greatly enhance the information provided to consumers.
Coventry First LLC, founded in 1999, facilitates the purchase of life insurance policies in exchange for cash payments.
A copy of the Consent Order
, which includes the details of the settlement and the Plan, is available for your review.
About the Florida Office of Insurance Regulation
The Florida Office of Insurance Regulation (Office) has primary responsibility for regulation, compliance and enforcement of statutes related to the business of insurance and the monitoring of industry markets. Business units within the Office are organized based on regulatory expertise and include the areas of life and health, property and casualty, specialty lines and other regulated insurance entities. It is within the Office that the mission of public protection is implemented through regulatory oversight of insurance company solvency, policy forms and rates, market conduct performance and new company entrants to the Florida market. For more information about the Office, please visit www.floir.com
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