Structured Settlements 4Real: What's Real News in the Structured Settlements, Settlement Planning, Consulting and Lawsuit Recovery Space?

"Martindale Hubbard"... The EPS Nursery Rhyme?

 

Ole Martindale "Hubbard"
EPS' link "in the cupboard",
To give their poor clients a bone:
When they came there,
Instead "Hubbell" was there,
Proof reading EPS they must hone.

Inspired by the title of a link* on the EPS Settlements website which appeared on December 31, 2009.

"Structured Settlement Industry Seeking Distance From Rothstein"...Broward Palm Beach New Times

The New Times of Broward Palm Beach published "Structured Settlement Industry Seeking Distance From (Scott) Rothstein; Crackdown Coming For "Cash Now" Outfits?  by Thomas Francis. The post title is self explanatory.

Thomas Francis' post cites information and exhibit provided by this author, John Darer to support the story.

Stories Impacting the Structured Settlements Industry in 2009

The Doom and Gloom concerning structured settlement annuity issuers of late 2008 has abated somewhat. At this time last year our industry was in the throes of significant uncertainty created by the government bailout of AIG. the sudden withdrawal of Aviva from the structured settlement market and the media reports creating jitters about The Hartford and others and which weighed heavily on our minds.Other stories (not necessarily in chronological order)

1. From what we've been hearing, 2009 saw a number of industry producers taking meaningful hits to their production, particular in the early part of the year.Others saw flat to slight increases in production. Perhaps my experience is an anomaly, but I've noticed a meaningful increase in activity since July 2009.
2. Following the Madoff fraud exposed in late 2008 which had nothing to do with structured settlements, 2009 brought us $16.5B in fresh exposed frauds including two purportedly about structured settlements that weren't. Media characterization of Scott Rothstein as a "mini Madoff" added to the stigma.  The cherubic Rothstein didn't even come close. Credit to Mark Wahlstrom, Jan Schlictmann, Roger Bernstein, Peter Arnold. Bruce DeBacher, Matt Bracy and this author John Darer for their considerable collective efforts to diffuse and undo any damage done when former Elian Gonzalez'  and U.S. attorney Kendall Coffey mislabeled structured settlements in a complaint against Rothstein which sparked a media mislabeling frenzy.
3. The Connecticut Woman factoring saga gave us a live case which underscored (1) the need for structured settlement consultants, settlement planners and plaintiff lawyers to ask more questions about, and do a better job of addressing plaintiffs' immediate liquidity needs; (2) the fact that fast cash now (for structured settlements) is a load if B.S.; (3) the need for regulation of the advertising practices of factoring companies; (4) the potential exposure to the settlement consultant and attorney for failing to address the aforementioned need that resulted in a loss of principal in line with stock market losses, from a safe investment. To remind everyone the woman took an estimated 30% hit to principal to sell the payment rights and had to wait 6 months to get the money to address her immediate cash needs.
4. The issue of Structured Settlement Servicing was brought to the forefront. Allegations that certain structured settlement annuity issuers were not slicing or dicing structured settlement payments to multiple payees when an annuitant only wanted to sell part of their structured settlements to meet emergency liquidity needs. The result is a structured settlement servicing agreement in which all of the payments, not just the sold payments, are paid to the servicing company (the factoring company, Structured Asset Funding in the CT Woman case), which then takes its cut and passes the balance of the payment to the annuitant. This raised the issue of what happens to the annuitant's payments in the event of Chapter 7 bankruptcy of the servicing factoring company? In a series of pod casts John Darer addressed the structured settlement servicing issue together with guest, Houston attorney Bruce Akerly.
5. The issue of credential puffery in the structured settlement industry was brought to the forefront and substantially improved. Through the considerable public efforts of this author NSSTA has now published guidelines on promoting the Certified Structured Settlement Consultant certification. It's only too bad it took so long and required extreme peer pressure to get it right.
6. Prudential's decision to withdraw from the non qualified structured settlement market was a biggy. The market has not quite filled the void.  As other industry commentators have noted, there are considerable opportunities in this area for insurers and settlement professionals.
7. JG Wentworth Chapter 11 Bankruptcy.  Call it shadenfreude, but I consider this one of the best things to happen for the industry in 2009. (1) These guys really needed some humility; (2) The bankruptcy disclosure made by JG Wentworth coughed up some useful information supplying proof that the size of factored structured settlements does not match up against the perception by plaintiff attorneys created by the advertising noise;  (3)The continuous bombardment of false advertising "cash now" that $40 million will buy you was tempered dramatically.
8. The withdrawal of Hartford from the structured settlement market place was not unexpected. The parent company suffered jitters for almost 12 month before the life company withdrawal,  due to fears over its exposure to credit default swaps and variable annuity guarantees. During those months the companies structured annuity rates were rarely competitive. Hartford Financial services Group, Inc. stock has rebounded from its 52 week lows of 3.33 over 7 fold.  It was sad to see some long time industry colleagues lose their jobs but many of them have landed on their feet. Industry veteran Mal Deener has landed at Symetra and John Meaney is trying his hand at settlement planning with Delta.
9. In a number of published legal decisions, the United States continued to render useless, the attempts to factor annuities placed as part of Federal Tort Claims Act settlements. 
10. One can observe that more settlement firms are making an Investment in websites and other web 2.0 technology. This blog has highlighted the information on static content websites are boring, neither attract or retain traffic and sometimes embarrassing when failure to update outdated information comes to light. Industry members caught in the headlights have simply had to put up with the minor annoyance of peer pressure for the greater good.
11. The nation's first Registered Settlement Planners (RSP) rolled off the assembly line. This author was among the first in the United States to earn the designation. Kudos to the leadership of the Society of Settlement Planners for laying the foundation, and to Joe Tombs and his crew at Texas Tech for the delivery. The RSP designation has a lot of promise, yet it faces significant challenges to become a force which will be covered in a separate post. 
12. Priority guidance for single claimant qualified settlement funds has been removed from the 2009-2010 United States Treasury Priority guidance list
13. Jeremy Babener, a 3rd year law student at NYU challenged a statistic that alleged basis of the structured settlement tax subsidy in a white paper. Babener was "pimped" all over by Patrick Hindert as if he was the "Elvis Presley of structured settlements".  The "Dissipation Myth Bab-oon" road show hit a new low at the annual meeting of the National Association of Settlement Purchasers in November.
14. While Hindert, in his annual summary, places the take over of The Settlement Services Group by Forge as a seminal event, we simply see it as a way for Forge to justify having defense brokers in an organization that markets itself as plaintiff exclusive. The timing of the announcement suspiciously followed our September post about an anonymous plaintiff exclusive organization that had defense brokers.
15. In 2009 the industry lost some good people due to cancer, Mary Lynn Izzo and Richard G. Halpern. Most people loved Mary Lynn. While the brilliant and innovative Richard Halpern was not universally loved by the industry, he was an important force in the history of the structured settlement industry,  who challenged the status quo and succeeded (by a wide margin). I was sad to lose both of these friends this year. 
16. After extended period of reductions, the 10 year bond is again approaching 4% and the 30 year bond approaching 5% as I type. It is my prediction and others that by end of 2010 we may see 10 year bonds in the 5.5% range with a meaningful increase in the long bond. 
17. As an aside and some industry news just "sliding in the door" at year's end, the popular Jeanne Ragusa, formerly at Aviva, has joined John Hancock as Internal Sale Manager.

Concluding with a light hearted summary of the events of 2009, courtesy of JIb Jab...

Try JibJab Sendables® eCards today!

Are North Carolina Insurance Agents Violating The Law?

In an August 30, 2009 post I discussed a quote appearing in the North Carolina Lawyers Weekly's August 17, 2009  report concerning structured settlement annuities.

In the August 17, 2009 article R. James Lore, a Cary, NC attorney is quoted as saying that "many of the structured settlement companies were selling these annuities and telling people they had coverage from the guaranty fund, and meanwhile, the guaranty fund was saying there was no coverage here.

I asked at the time "Who are these structured settlement companies? If what Lore said is true, the behavior of these "structured settlement companies" appears to violate the following North Carolina statute":

N.C. GS 58-62-96 (a) No person shall make, publish, disseminate, circulate, or place before the public, or cause directly or indirectly to be made, published, disseminated, circulated, or placed before the public, in any newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio station or television station, or in any other way, any oral or written advertisement, announcement, or statement that uses the existence of the Association or this Article for the purpose of sale or solicitation of or inducement to purchase any kind of insurance covered by this Article.

North Carolina Life & Health Guaranty Association prohibition on advertising  (N.C. GS 58-62-96)

Despite this prohibition, It has come to my attention that financial advisor Patrick Munro of Northstar Financial Advisors Wilmington, NC discusses the state guaranty funds in a video posted on the Internet entitled " Why Invest in Annuities" (below)  According to his biography he solicits business in North Carolina and South Carolina. He shows an active life insurance license in both states North Carolina.

I target Mr. Munro because he also has a video about "structured settlement annuity".

 

 

Let's set aside the disturbingly eerie similarity to the cadence of Ben Stein (i.e "Bueller?, Bueller? Someone? Anyone?) and address why some of what Patrick Munro states is inaccurate.

Munro inaccurately claims the Insurance company will invest your money under government guidelines so you cannot lose principal

Comments:

1. An annuity is a contract which is backed by the full faith and credit of the annuity issuing life insurance company.
2. Despite recent calls for federal regulation, annuity issuing life insurance companies are not federally regulated. They are regulated by each state in which they do business. An explicit liability reserve is established, pursuant to statutory accounting,  for all invested asset classes of the insurer with the aim of providing protection to a company's surplus against potential losses in equities and credit markets. Realized or unrealized losses are credited or debited against the reserve. In 1991 the old Mandatory Securities Valuation Reserve was replaced with the Asset Valuation Reserve (AVR) which added mortgage loss reserves to the formula. 
3. A classic recent example is the effect of guarantees on variable annuities that were so popular but proved to be an albatross around insurers necks during the recent financial crisis. Actuaries priced these under a set of assumptions for a worst case scenario that were exceeded by the financial conditions which ensued. Fortunately the companies only saw ratings drops.

123 Lump Sum's Dubious Claims that " Easy as 123 You Get Your Cash TODAY

In the opinion of this author, Structured Asset Funding is one of the worst false advertisers of companies that purchase structured settlement payment rights from accident victims.  The company ought to be slammed by the Federal Trade Commission along with other false advertisers in the industry.

In the past I have highlighted how the company has advertised and continues to false advertise "fast cash now" despite a number of complaints to the Better Business Bureau that suggest otherwise by a long shot.

As previously covered the company's moral compass is skewed to include the solicitation of accident victims to sell their structured settlement payments to buy luxury cars and boats (i.e. depreciating assets)

The company also operates under the marketing name of 123 Lump Sum. In several commercials posted on Youtube.com the company makes the following dubious claim:

"Its as easy as 123 to get your cash today"

http://www.youtube.com/watch?v=XU4_agoiMUU

http://www.youtube.com/watch?v=9Wi2ZKLKp7o

http://www.youtube.com/watch?v=2U8OsKI8e1E

In the immortal but paraphrased words of Red Forman (above), 123 Lump Sum has "hung vacancy signs on their asses and the FTC should be looking for a room".

This is as heinous a false advertising claim as Peachtree's 2008 claim that it could get you "all your money now"

The Florida structured settlement protection act and the protection act of each state that has one requires Court approval of structured settlement factoring transactions. That process does not happen all in the same day a person contacts 123 Lump Sum, Structured Asset Funding or any factoring company.

The principals of this company are owners of Bentzen Funding Solutions, according to information retrieved from the Florida Secretary of State on December 27, 2009.

News From The Batcave "Troglodytes Inherit Billions", Bentzen Buffaloed

  "Troglodyte" pounds out the news

Only weeks after "factoring broker to the structured settlement stars", Rhonda Bentzen, picked on troglodytes in a December 8, 2009 melt down post (about Blog Bullies), it has emerged that just days before her post two Hungarian cave dwellers  (i.e. troglodytes) inherited billions when their grandmother died.

Read Cave Dwelling Brothers Inherit Billions

Further Instructions: Expose face, apply egg

As Bentzen likes to say, It's Ben Fun! 

 

P.S. Not surprisingly, Bentzen still hasn't answered the important and relevant questions posed to her in November.  

Structured Settlement Industry 12 Days of Christmas Parody

We've all lived through a lot this year so in reflecting back over the past 12 months it's only fitting that we memorialize it in an irreverent song!  Click the image below for background music!

• On the 1st day Xmas my Industry gave to me,  a cartridge in a Bair Tree
• On the 2nd day of Xmas my industry gave to me, 2 credential puffers and a cartridge in a Bair Tree
• On the 3rd day of Xmas, my industry gave to me, 3 SCHIPs, 2 credential puffers and a cartridge in a Bair Tree
• On the 4th day of Xmas, my industry gave to me 4 SNT's, 3 SCHIPs, 2 credential puffers and a cartridge in a  Bair Tree
• On the 5th day of Xmas, my industry gave to me Wentworth's BANKRUPTCY!, 4 SNTs, 3 SCHIPs, 2 Credential puffers and a cartridge in a  Bair Tree
• On the 6th Day of Xmas, my industry gave to me 6 mediations, Wentworth's BANKRUPTCY!, 4 SNTs , 3 SCHIPS, 2 Credential puffers and a cartridge in a Bair Tree
• On the 7th day of Xmas, my industry gave to me, 7 cash now pushers, 6 mediations, Wentworth's BANKRUPTCY!, 4 SNTs, 3 SCHIPS, 2 credential puffers and a cartridge in a Bair Tree.
• On the 8th day of Xmas my industry gave to me, 8 "Snot Rotsteins",  7 cash now pushers, 6 mediations, Wentworth's BANKRUPTCY!, 4 SNTs, 3 SCHIPS, 2 credential puffers and a cartridge in a Bair Tree.
• On the 9th day of Xmas, my industry gave to me,  9 Pats Pedantic, 8 "Snot Rotsteins",  7 cash now pushers, 6 mediations, Wentworth's BANKRUPTCY!, 4 SNTs, 3 SCHIPS, 2 credential puffers and a cartridge in a Bair Tree.
• On the 10th day of Xmas, my industry gave to me, 10 FatViking Singers,  9 Pats Pedantic, 8 "Snot Rotsteins",  7 cash now pushers, 6 mediations, Wentworth's BANKRUPTCY!, 4 SNTs, 3 SCHIPS, 2 credential puffers and a cartridge in a Bair Tree.
• On the 11th day of Xmas, my industry gave to me, 11 Babeners Babbling 10 FatViking Singers,  9 Pats Pedantic, 8 "Snot Rotsteins",  7 cash now pushers, 6 mediations, Wentworth's BANKRUPTCY!, 4 SNTs, 3 SCHIPS, 2 credential puffers and a cartridge in a Bair Tree.
• On the 12th day of Xmas, my industry gave to me, 12 "Crackberries"  'Brating,  11 Babeners Babbling 10 FatViking Singers,  9 Pats Pedantic, 8 "Snot Rotsteins",  7 cash now pushers, 6 mediations, Wentworth's BANKRUPTCY!, 4 SNTs, 3 SCHIPS, 2 credential puffers and a cartridge in a Bair Tree.

Need help carrying the tune? Simply click below so you can sing or hum along!

Happy holidays to all; and to all a good night!

We've all lived through a lot this year so in reflecting back over the past 12 months it's only fitting that we memorialize it in an irreverent song!  Click the image below for background music!

• On the 1st day Xmas my Industry gave to me,  a cartridge in a Bair Tree
• On the 2nd day of Xmas my industry gave to me, 2 credential puffers and a cartridge in a Bair Tree
• On the 3rd day of Xmas, my industry gave to me, 3 SCHIPs, 2 credential puffers and a cartridge in a Bair Tree
• On the 4th day of Xmas, my industry gave to me 4 SNT's, 3 SCHIPs, 2 credential puffers and a cartridge in a  Bair Tree
• On the 5th day of Xmas, my industry gave to me Wentworth's BANKRUPTCY!, 4 SNTs, 3 SCHIPs, 2 Credential puffers and a cartridge in a  Bair Tree
• On the 6th Day of Xmas, my industry gave to me 6 mediations, Wentworth's BANKRUPTCY!, 4 SNTs , 3 SCHIPS, 2 Credential puffers and a cartridge in a Bair Tree
• On the 7th day of Xmas, my industry gave to me, 7 cash now pushers, 6 mediations, Wentworth's BANKRUPTCY!, 4 SNTs, 3 SCHIPS, 2 credential puffers and a cartridge in a Bair Tree.
• On the 8th day of Xmas my industry gave to me, 8 "Snot Rotsteins",  7 cash now pushers, 6 mediations, Wentworth's BANKRUPTCY!, 4 SNTs, 3 SCHIPS, 2 credential puffers and a cartridge in a Bair Tree.
• On the 9th day of Xmas, my industry gave to me,  9 Pats Pedantic, 8 "Snot Rotsteins",  7 cash now pushers, 6 mediations, Wentworth's BANKRUPTCY!, 4 SNTs, 3 SCHIPS, 2 credential puffers and a cartridge in a Bair Tree.
• On the 10th day of Xmas, my industry gave to me, 10 FatViking Singers,  9 Pats Pedantic, 8 "Snot Rotsteins",  7 cash now pushers, 6 mediations, Wentworth's BANKRUPTCY!, 4 SNTs, 3 SCHIPS, 2 credential puffers and a cartridge in a Bair Tree.
• On the 11th day of Xmas, my industry gave to me, 11 Babeners Babbling 10 FatViking Singers,  9 Pats Pedantic, 8 "Snot Rotsteins",  7 cash now pushers, 6 mediations, Wentworth's BANKRUPTCY!, 4 SNTs, 3 SCHIPS, 2 credential puffers and a cartridge in a Bair Tree.
• On the 12th day of Xmas, my industry gave to me, 12 "Crackberries"  'Brating,  11 Babeners Babbling 10 FatViking Singers,  9 Pats Pedantic, 8 "Snot Rotsteins",  7 cash now pushers, 6 mediations, Wentworth's BANKRUPTCY!, 4 SNTs, 3 SCHIPS, 2 credential puffers and a cartridge in a Bair Tree.

Need help carrying the tune? Simply click below so you can sing or hum along!

Happy holidays to all; and to all a good night!

Amicus Settlement Planning SEO Effort Results in Stub Toe With New York Insurance Law

Nice "toe stubbage" from settlement planner Bill Tilley of Amicus Settlement Planning who solicits trial lawyers with the warning "The Most Serious Risks You Don't See Coming".  Ironically in designing his website Tilley apparently hasn't "seen coming" an apparent violation of New York Insurance Law by how he has engaged in search engine optimization.

You see there's the matter of New York Insurance Law § 2122(b) entitled "advertising by insurance agents and brokers"  The statute provides:

"Every agent of any insurer and every insurance broker shall, in all advertisements, public announcements, signs, pamphlets, circulars and cards, which refer to an insurer, set forth therein the name in full of the insurer referred to and the name of the city, town or village in which it has its principal office in the United States".  (underlines for emphasis)

What Tilley/Amicus Settlement Planning have done is list as structured settlement  "providers"

Allstate Structure Settlements

Aviva Structured Settlements

Hartford Structured Settlements

John Hancock Structured Settlements

Pacific Life Structured Settlements

Prudential Structured Settlements

Symetra Structured Settlements

MetLife Structured Settlements

Consider:

1. The Amicus Settlement Planning blog qualifies as an advertisement
2. Amicus lists a New York address at 132 W 31 Street and is known to solicit insurance business in New York and thus is subject to New York insurance law.
3. None of the aforementioned names is the legal name of an insurance company
4. None of these displays the city and state of the home office of an insurance company
5. The Aviva subsidiaries offering structured settlement annuities haven't done so since December 2008.
6. The Hartford subsidiaries offering structured settlement annuities haven't done so since October 2009.
7. How ethical is it if Amicus/ Tilley's search engine results come up prior to others who follow New York Insurance statute 2122(b)?

On his Linked In Profile, Mr Tilley states that he is concerned with "improving the business of law".

Perhaps he can start by following it!

Halpern Group Announces Executive Appointments, States Mission Will Continue Following Passing of Founder

Following through with its succession plan, The Halpern Group has appointed Risa H. Lower as President, following a long tenure as Executive Vice President during which time she oversaw all day-to-day operations in support of Richard Halpern and played an instrumental role in the company's growth over the past three decades.  Mr. Halpern passed away on December 14, 2009.

In a Halpern Group press release issued today, Ms. Lower emphasized that the late Mr. Halpern's vision and integrity will continue to thrive as the organization moves forward with great passion and purpose. She further stated that "The Halpern Group is well positioned for rapid growth given how our expertise and proprietary products in the area of Recovery Management meet the unique needs of the industry".

In addition to the promotion of Risa Lower, the company announced that Natalie Sticesen will become Executive Vice President, a role in which she will oversee all sales and financial functions and will be a key member of the senior leadership team.

 

 

Understanding TARP in Relation to Structured Settlement Annuity Companies

I recently heard a comment from a plaintiff lawyer reviewing a structured settlement proposal from an industry colleague which comment was indicative that he was told something to the effect of "not to worry about the structured settlement annuity company's ratings because they had received TARP funds". If you are that structured settlement broker or settlement planner I ask that you take stock of what you are saying because it is both irresponsible and inaccurate.

  WARNING: Most states insurance laws prohibit the advertisement or discussion of even the existence of state insurance guaranty funds in connection with the sale of insurance (in New York at least, that includes solicitation in connection with the placement of structured settlement annuities). Most states insurance laws ALSO contain prohibition against using misleading statements in connection with the sale of insurance. The contracts between agents and the companies they represent as well as the codes of ethics/standards of professional conduct of their professional associations also prohibit these practices.

As part of the Emergency Econnomic Stabilization Act of  2008, the Troubled Asset Relief Program, commonly referred to as TARP, is a government program  to purchase assets and equity from financial institutions to strengthen the financial sector. It is the largest component of the government's measures in late 2008 to respond to the subprime mortgage crisis. Essentially TARP allows the United States Treasury to purchase illiquid, difficult-to-value assets from banks and other financial institutions. The intent of TARP is to improve the liquidity of these assets by purchasing them using secondary market mechanisms, enabling the participating institutions to achieve a more stable balance sheet and curtail further losses.

In the case of AIG the TARP Funds flowed to American International Group, Inc., not to American International Life Assurahnce Company of New York or American General Life Insurance Company.

In the case of Hartford, the TARP funds did not go directly to Hartford Life Insurance Company, they went to Hartford Financial Services Group, Inc.

It is important that those who dispense financial advice provide accurate structured settlement information to plaintiffs and other structured settlement stakeholders.