SOURCE: Life Insurance Settlement Association

Life Insurance Settlement Association

April 14, 2010 15:54 ET

Appellate Court Affirms Life Insurance Settlement Association's Challenge to FLOIR Rule

ORLANDO, FL--(Marketwire - April 14, 2010) -  On April 9, 2010, the First District Court of Appeal in Tallahassee, Florida issued its opinion on the case of Office of Insurance Regulation (Florida) v. Life Insurance Settlement Association, Inc. Therein, the Court affirmed the Administrative Law Judge's Finding that the Office of Insurance Regulation's (OIR) rule, that would have required viatical insurance settlement providers to file voluminous and private financial and business information was an impermissible exercise of legislative authority and therefore invalid.

Specifically, Rule 690-204.030, and the Annual Report incorporated by reference in the rule, would require viatical settlement providers to disclose, in a publicly available form, detailed information regarding their nationwide, and international, business activities, as well as settlements not subject to Florida regulation. The Life Insurance Settlement Association (LISA) challenged this rule pursuant to Florida law before the Department of Administrative Hearings on the grounds that the rule was an invalid exercise of delegated legislative authority and that LISA's members would be adversely affected by the rule because it would require them to include information about activities outside of Florida in their Annual Reports which is not required by law. In related activity, it must be noted that at the time the rule was promulgated, the OIR was unsuccessfully seeking passage of a statute before the Legislature that would have granted the authority to promulgate such a rule. In approving the rule at issue, the Cabinet was not apprised of this fact.

On May 7, 2009, the Administrative Law Judge issued his Order finding that the OIR had "not met their burden of persuasion to show that the rule is a valid exercise of delegated legislative authority." Notably, the Judge found that it was clear that the private business and financial information demanded by the rule was more than the mere "collection of data" and mandated the collection of facts about viatical settlement companies that was not authorized by any statute. The OIR chose to appeal this ruling to the First District Court of Appeal and the issue was fully briefed by Stephanie Alexander and Brady Cobb of Tripp Scott, P.A., who are counsel for LISA. After oral arguments were heard on February 23, 2010, the First District Court of Appeal issued its Order on April 9th and summarily affirmed the Administrative Law Judge's finding that the rule promulgated by OIR was an invalid exercise of delegated legislative authority.

LISA is very pleased with this ruling and looks forward to the development of rules as mandated by the legislature. As the voice of the life settlement industry, LISA is committed to protecting the development, integrity, and reputation of the industry, and has long welcomed any opportunity to work with regulators nationwide to achieve fair and reasonable legislation and rules to protect consumers and their constitutional rights. We urge readers to visit our web-site, www.thevoiceoftheindustry.com, for more complete information.

To read the Court's opinion click here: http://opinions.1dca.org/written/opinions2010/04-09-2010/09-2654.pdf

About LISA

Established in 1994, the Life Insurance Settlement Association is the oldest and largest trade organization in the industry. Its goal is to promote the development, integrity, and reputation of the life settlement industry, and to promote a competitive market for the people it serves. LISA now represents over 130 members with a wide variety of interests in the industry. For more about the association, visit www.thevoiceoftheindustry.com.

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