TALLAHASSEE, Fla. (10/01/2007) - 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.
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