Case Law Update: Florida Court Backs DFS Power to Investigate Insurers

Background

On September 30, 2026, Florida's First District Court of Appeal issued a significant ruling in Litai Assets, LLC v. Florida Department of Financial Services, affirming the Department's statutory authority to investigate licensed and formerly licensed insurance service companies operating within the state. The decision closes a two-year standoff between state regulators and a Pompano Beach-based viatical settlement firm that refused to turn over its books and records during a 2023 compliance investigation.

Litai Assets has operated since at least 2009, servicing viatical settlement contracts — arrangements in which policyholders sell their life insurance benefits for a lump-sum cash payout, typically due to a terminal or chronic illness. The company held an active insurance agency license beginning in 2014, but that license expired or lapsed in 2022. Despite the lapse, Litai continued to advertise that it "currently manages" more than 5,000 life insurance policies — a detail the appellate court found relevant to the scope of DFS's regulatory interest.

Key Holdings

When DFS investigators arrived at Litai's offices in 2023 to review company records, the firm's operations officer directed them to leave, asserting that Litai was not "transacting insurance" but merely servicing already-viaticated policies. DFS responded by issuing a subpoena. Litai challenged the subpoena on three grounds:

• That the company was not conducting insurance business subject to DFS oversight;
• That the Department lacked statutory authority to regulate viatical servicers as opposed to viatical providers; and
• That DFS had no particularized reason to suspect wrongdoing before issuing the subpoena.

A Leon County trial judge rejected each argument and enforced the subpoena in 2025. On appeal, the First District agreed, holding unambiguously that "the Department did and does have such authority, statutorily conferred." The court characterized Litai's position as "self-serving and conclusory," noting that a bare denial of wrongdoing does not defeat an agency's statutory investigatory power. Critically, the panel confirmed that DFS need not first prove misconduct before compelling production of records from an entity that held — and continued to trade on the reputation of — an insurance license.

Impact on Public Adjusters and Claims Professionals

While Litai arises in the life settlement context, its holding has broader resonance for anyone operating in Florida's regulated insurance space, including public adjusters, third-party administrators, and claims consultants. The ruling reinforces several principles that matter well beyond viatical settlements:

• DFS investigatory authority is broad and self-executing. Entities cannot avoid oversight simply by recharacterizing their business model (e.g., "servicing" rather than "transacting") after a license lapses.
• Record-keeping obligations survive license expiration where a company continues to hold itself out as managing insurance-related assets or contracts.
• Courts will defer to DFS's statutory mandate rather than require the Department to show cause before issuing a subpoena, a posture that should encourage public adjusters and policyholders alike to expect robust regulatory enforcement against bad actors in the claims and settlement space.

For public adjusters, the case is a reminder that DFS's enforcement reach is not limited to carriers. Any licensee — or formerly licensed entity still trading on that status — operating in Florida's insurance ecosystem can be compelled to open its books. That includes PA firms, assignment-of-benefits vendors, and settlement intermediaries who may assume regulatory scrutiny only follows active complaints.

Practical Takeaways

• Firms with lapsed or expired insurance licenses should not assume they have exited DFS's jurisdiction, particularly if marketing materials still reference licensed activity.
• Policyholders considering a viatical or life settlement sale should confirm a servicer's current licensure status directly with DFS before signing any agreement.
• Public adjusters working adjacent to settlement or claims-servicing arrangements should maintain organized, accessible records — DFS subpoenas, as this case shows, will be enforced by Florida courts with minimal friction for the agency.
• Entities facing a DFS records request should seek counsel promptly; the cost of litigating jurisdictional objections, as Litai discovered, can be steep and ultimately unsuccessful if the underlying statutory authority is clear.

How Louis Law Group Can Help

Louis Law Group represents Florida policyholders and works alongside public adjusters navigating the full spectrum of insurance disputes, from denied property claims to questions about the legitimacy of settlement and servicing companies. If you have questions about a viatical settlement offer, suspect irregularities in how your policy is being managed, or need help understanding your rights when dealing with a licensed or formerly licensed insurance entity, our attorneys can help you evaluate your options and protect your interests.

Call (833) 657-4812 today for a free consultation with Louis Law Group and let our experienced Florida insurance attorneys guide you through your claim or dispute.

Source: Insurance Journal - Court Upholds Florida Regulators' Authority to Investigate Viatical Settlement Firms