Friday, April 24, 2009

Challenge to Florida Department of Financial Services Investigative Power Denied

Today, in Everett RE Group Ltd. v. Florida Dept. of Financial Services (1D08-3961), the First DCA denied Everett's Petition for Certiorari relating to a discovery order. Acting as the receiver for Southern Family Insurance Company, Atlantic Preferred Insurance Company and Florida Preferred Property Insurance Company, the Florida Department of Financial Services served an investigative demand on Everett relating to the operations of the three insolvent insurance companies. Everett challenged the authority of FDS to issue the demand and its obligation to comply as a foreign corporation. The court disagreed and stated:

The authority for the investigative demand in this case is established by Section 631.156, Florida Statutes (2008), which provides that the Florida Department of Financial Services may conduct an investigation to determine the cause of an insurer’s insolvency. This statute gives the Department broad power to investigate potential violations of state and federal law and to discover the existence and location of any assets that may be recovered in the liquidation proceeding.


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