When the injured party refuses to accept the liability amount of an Ins. policy can the Ins Co. keep the insurance money?

From the information provided, it does not appear that your insurance is "keeping" the money. The insurance companay likely offered the policy limits contingent upon the signing of a release, which the injured party did not want to sign. The insurance company is required to provide you with a defense of the lawsuit and pay the judgment up to the policy limits, which they should do when the judgment is entered. You would be personally responsible for the portion of the judgment in excess of your insurance policy. As for the financial affidavit, Plaintiff's counsel is likely requesting this to make a determination as to whether it is worth it to pursue this matter. If you will not be able to pay the judgment and it would be difficult to collect from you, then the Plaintiff may choose to just take the offer from the insurance company. Your homestead is protected from the judgment. In addition, you pension plan (if it qualifies under Florida statute) may be protected from the collection efforts. I would consult with an attorney who can review your assets.