Federal Judge Upholds Final Order Against Fla.-based Native Assurance Co.

A South Florida-based unlicensed insurance company that sought to hide behind a federal protection for Native American tribes has lost its challenge to use the protection to avoid an order from state regulators to stop selling its products in Florida.

United States District Judge Kenneth A. Marra issued a ruling for the Southern District of Florida on Tuesday granting the Office of Insurance Regulation’s motion to dismiss Native Assurance Company, Inc.’s emergency motion for a temporary restraining order against OIR’s action.

“Native Assurance sought to exploit a legitimate protection to help finance an illegitimate operation,” said Florida’s CFO Tom Gallagher, who oversees the Department of Financial Services. “This ruling affirms the state’s right to protect its citizens.”

In the past two years, 16 unauthorized entities selling insurance in Florida have been shut down and dozens of agents are facing disciplinary action, including suspension and revocation of their licenses. Under Florida law, agents can be held responsible for unpaid claims resulting from products they sold for unauthorized entities and can face felony charges. A new law passed this year also makes unauthorized entities subject to lawsuits and various felony charges depending on the amount of premiums collected.

“The Florida Office of Insurance Regulation has the utmost respect for the rights of the Seminole Tribe of Florida, which is why we coordinated our efforts with the tribe,” said Michelle Newell, assistant director of the OIR. “In this case, however, we believe these operators were abusing the good name of the Seminole Nation for private gain.”

The OIR issued an Immediate Final Order against Native Assurance in late June. Native Assurance was offering health, life and workers compensation insurance, soliciting customers and sales agents via an interactive website and several affiliates.