11th Circuit Court Affirms Coventry Decision
Coventry First, LLC v Kevin McCarty, Commissioner of the Florida Office of Insurance Regulation (11th Circuit Court of Appeals)
The 11th Circuit Court of Appeals issued an order on May 5, 2010 affirming a decision by the Northern District of Florida dismissing Coventry First LLC’s complaint for injunctive relief. The Florida Office of Insurance Regulation sought to examine the books and records of Coventry’s viatical settlement provider, including records pertaining to contracts outside the state of Florida. Coventry sought an order enjoining the Insurance Commissioner from examining contracts and records for business not arising from Florida. The district court declined to issue the injunction and granted the Motion of the Office to dismiss the complaint. Coventry appealed. The circuit court affirmed the lower court citing among other things that the Florida Viatical Act “gives the Commissioner the right to examine the business records of licensees” without any “indication that the scope of this right was limited to in-state transactions.”
The court also found that the regulation involved was the regulation of the “business of insurance” under McCarran-Ferguson and therefore shielded the act from the dormant Commerce Clause. The court also found there were no supportable claims based on the Due Process or Full Faith and Credit Clauses.