Regulators Order Unlicensed Florida Viatical Provider to Cease Business

By Marie Suszynski, associate editor, BestWeek

TALLAHASSEE, Fla. August 05 (BestWire) - Florida regulators have ordered an unlicensed viatical-settlement provider to cease operations as it investigates how many customers the group has and how much they have invested through the company.

The Florida Office of Insurance Regulation ordered Robin Hood Group Inc. of Palm Beach, Fla., to immediately cease its viatical business. Regulators named nine affiliates, including Fewkes Management of Jupiter, Fla., which was organized by Robin Hood Vice President Jeannie B. Cook and Michael Fewkes to handle money for the viatical company and pay premiums on life insurance contracts. Fewkes is Cook's son-in-law, according to the order.

Viatical-settlement providers buy life insurance policies for a percentage of the face value from individuals who are terminally ill or have a shortened life expectancy. The companies then resell the policies to investors, who collect the death benefits when the insureds die.

Regulators don't know how many customers the company had or how much was invested through the group, said Bob Lotane, a spokesman for the office of insurance regulation. They have ordered Robin Hood to hand over a list of all of its customers, business contacts and investors.

The office has twice denied the company a license to sell viaticals. Robin Hood first applied in 1997 when it was under its former name of Robin Hood International Ltd. Inc., but it was denied a license because it failed to disclose material information about bankruptcies and civil judgments, Lotane said, citing the order.

Robin Hood Group again applied unsuccessfully for a license in 2002. "They were performing functions of a viatical settlement provider" without a license, Lotane said. "We gave them an opportunity to contest....and they failed to challenge the findings."

As part of its investigation, a department agent used a fictitious name to apply through Robin Hood's public Web site to sell his life insurance policy in May 2003, and the company sent the agent an application package, Lotane said.

"This group has shown a total disregard for the laws of our state," Kevin McCarty, director of the Office of Insurance Regulation, said in a statement. "I consider them to be a danger to the public welfare and in addition to shutting down their operations, I will forward this matter to the appropriate prosecutorial jurisdiction."

Robin Hood must notify its customers of the order and fulfill all outstanding contractual obligations. Robin Hood International is based in Wauconoa, Ill.

Although the office of insurance regulation can press civil charges against the company, it plans to forward the case to the fraud division because it has the authority to file criminal charges, Lotane said. The violation is a criminal offense that could range from a third-degree felony to a first-degree felony, depending on the value of the insurance policy, according to the order.

In May, the fraud division arrested the former president and executives of viatical-settlement provider Future First Financial Group Inc., which was put into conservatorship in August by a state judge to protect about 5,000 consumers who had invested about $170 million in death benefits with an expected return of $270 million.