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

Financial Literacy Moments of 2010-1

This week's financial literacy lesson comes to us from a review of the website of cash now pusher Northeast Capital Funding:

1. "Many States have recognized the need for lump sum payoffs, and have provided for them in their by-laws"

Comments

• A by law is a law or rule governing the internal affairs of an organization. 
• A state is not an organization.
• The New York structured settlement protection act does not refer to the internal affairs of the state
• The structured settlement protection act in New York is part of the General Obligations Law. That is not a by law.

2. "From it's conception in 1997, Northeastern Capital has only handled lump sum payoffs"

Comments

• Conception is the formation of a viable zygote by the union of the male sperm and female ovum; i.e. fertilization.
• Is Northeast Capital Funding implying that it was a fetus conceived in a fallopian tube? If so let's see the birth certificate!

Northeast Capital Funding circa late 1997?

3. "Northeastern Capital processed our first lump sum payoff in 1997. Since then, we have gone on to assist many other clients in obtaining lump sum payoffs for their lottery, trust, settlement and annuity payoffs"

Comment

These guys are giving payoffs, on payoffs?

FINANCIAL LITERACY, GET IT!

What is "Period Certain and Life" or "Years Certain and Life"?

The question was "I HAVE A STRUCTURED SETTLEMENT FROM AN ACCIDENT SETTLEMENT THAT SAYS "YEARS CERTAIN, AND LIFE". WHAT DOES THAT MEAN?"

Answer:

Years Certain means the number of years that the payments that are described as certain will be paid regardless of whether or not the payee survives the entire payment schedule.

In some cases the number of years certain is referred to as the number of years guaranteed although such usage may be misleading because when there is a years certain and life the payee is guaranteed to receive payments for the rest of his or her life.

For more information on the types of structured settlement payments available please click here

Structured Settlement Entities "Duke It Out" In South East Asia!

 

 
        "Mai Thai" NSSTA           Baby Risk                 S2KM's Herr Bearon Von Wiki-toven

Three structured settlement websites now draw over a third of their traffic from outside the United States.

The three websites are:

1. National Structured Settlement Trade Association 36.7% (almost 22% of its web traffic is from Thailand!)
2. Beyond Structured Settlements Blog  36.3% (almost 14% of S2KM's web traffic is from Indonesia.the 5th leading Asia Internet user country, 47% of which are under the age of 19). Of his US traffic ratings, Alexa states that an astonishing close to one third of Hindert's up stream web traffic comes from Structured Settlements 4Real.  Unfortunately von Wiki-Toven's "compelling and regularly updated" blog has had a 75% bounce rate over the last 3 months. In other words most people get there and want to leave after viewing the first page.
3. Structured Settlement Services 39.5%. This Settlement Professionals, Inc. affiliate gets 60% of its web traffic from search engines, but almost 40% of its web traffic from parts unknown outside the United States. SSS Robert Risk's "Da-da" commanded an Air Force squadron in Thailand during the Vietnam era. Has he made a "lasting impression"?

Source: Alexa

Treasury's Financial Crimes Unit Eyed Potential Purchase of Structured Settlement by Terrorist Organization

Buried on page 34 of the 74 page January 2010 Suspicious Activity Report Filings of the United States Treasury's Financial Crimes Enforcement Network is:

"Another report described an inquiry from a third-party structured settlement broker regarding the possible purchase of a “non-qualified structured settlement annuity.” According to the narrative, the broker said the payees of the settlement were American citizens and the payor was an “unnamed foreign terrorist organization” backed by an unfriendly foreign government. The broker refused to divulge the identities of any of the involved parties, “repeatedly stressed that the transaction was legitimate,” and cited an unnamed legal opinion that “indicated that no OFAC license was needed.” The broker provided no documentation, and later withdrew the proposal".

The Ironic Man: Settlement Professionals Inc. Affiliate Promotes NSSTA.

When the principals of Settlement Professionals, Inc. split off to expand their structured settlement general agency, a decision made to sever ties with the National Structured Settlement Trade Association ostensibly due to SPI principals' perception that NSSTA did not adequately address the rights of plaintiffs in structured settlement transactions. or more particularly the interests of those that advised plaintiffs. Principals of the company promote the "7 Deadly Sins of the Defense" as part of an advertising strategy that we've previously pointed out includes outdated information. This author has challenged those principals to "prove it" to the present day.

If the "left wing front" of the settlement industry reviles NSSTA so much then isn't it ironic that one of Settlement Professionals' affiliates devotes a full page of its website to videos about structured settlements that have been produced by, or on behalf of,  the National Structured Settlement Trade Association?

Similar irony to this...

Now I'm sure that NSSTA is grateful for the links, thanks to SPI affiliate Bill Tilley, which help to promote NSSTA!

The National Structured Settlement Trade Association is comprised of diverse members who advise all types of stake holders in structured settlements and the settlement planning process. Is Settlement Professionals, Inc. going to join NSSTA?.

Mears in Paradis!

Cam Mears, formerly AVP Structured Settlements at Chartis Insurance has landed in Paradis! That's Crowe Paradis, the national Medicare Set Aside/MSP compliance company in North Reading, MA where he is Product Sales Manager. We wish Cam well.

Qualified Assignments 101, What is a Qualified Assignment?

A qualified assignment is a transfer of  the obligation to make future periodic payments under a settlement agreement, which satisfies the requirements of Internal Revenue Code (IRC) § 130. In a structured settlement agreement the original obligor (the defendant, insurance carrier for the defendant, or the trustee of a IRC 468B qualified settlement fund, assigns its obligation to make the future periodic payments defined in the settlement agreement to a "qualified assignment company". Generally a qualified assignment company is a special purpose company, which does little more than hold an annuity or United States Treasury obligations as a "qualified funding asset" to back up the obligations it assumes from Defendants, Insurers or qualified settlement fund trustee. A qualified assignment company may actually be an insurance company itself. When an annuity is used as a qualified funding asset, the qualified assignment company is usually related to the life insurance company issuing the structured settlement annuity. In such cases, the qualified assignment company typically purchases an annuity from the related life insurance company as a qualified funding asset pursuant to IRC 130(d). A qualified assignment requires the plaintiff's consent.

Plaintiffs and their attorneys who engage settlement consultants who hold themselves out as plaintiff specialists or settlement planners have a reasonable expectation that those settlement consultants deliver accurate and reliable information.

The answer to the question "what is a qualified assignment" should be fundamental knowledge to ALL competent structured settlement consultants and users of structured settlements. It is therefore quite a pity that there is misinformation posted on the website of a veteran plaintiff focused NSSTA member which states incorrectly (see below) that the qualified assignment is "to a financially secure insurance company", or "an assignment to the life company".

"From the plaintiff’s perspective, an assignment to a financially secure insurance company gives them the assurance that future payments will be made as promised. For many plaintiffs, this assignment to the life company alleviates the stress of future contact with the defendant, their insurer, or any party responsible for the injury"- from website of NSSTA member

Of the primary companies offering structured settlements only the qualified assignment facility used by  New York Life (New York Life Insurance and Annuity Corporation) is an insurance company. The qualified assignees of American International Life Assurance Company of New York, Pacific Life and Annuity Company, Allstate Life Insurance Company, Allstate Life Insurance Company of New York, Metropolitan Life Insurance Company, John Hancock Life Insurance Company (USA), John Hancock Life Insurance Company of New York, The Prudential Insurance Company of America, Symetra Life Insurance and American General Life Insurance Company (i.e. the majority) ARE NOT life insurance companies or even insurance companies for that matter.

Members of the settlement industry and their trade associations should take extra care to be sure that their web sites contain accurate information, particularly on such fundamental stuff as a qualified assignment.

Risk on "Structured Settlement Basis"? Must We Carry "Okie"?

 "A structured settlement for workers’ compensation or physical injury tort claims is a special provision under the United States Internal Revenue Code [Sec. 104(a)(1) and (2), respectively] that exempts all payments from current year income taxation, whether received as a lump sum or over a period of time. If the entire settlement is taken as a cash lump sum, that amount is excluded from current year taxable income, but the first dollar earned on the award becomes a taxable event" -

-Robert Risk Structured Settlement Services, LLC, an affiliate of Settlement Professionals, Inc. (SPI)-Tulsa, OK  ("Okie")

We Carry "Okie"

1. Definition of "Basis"- Purchase price, including commissions and other expenses, used to determine capital gains and capital losses for tax purposes. Source: Investorwords.com
2. Perhaps Risk was referring to "basics"?
3. A structured settlement IS NOT defined in Internal Revenue Code Section 104.

"If the total settlement amount is taken as a cash lump sum, the growth from an investment will be subject to federal and state income taxes, which reduces the net performance of the investment by the marginal tax rates, which can approach 50%".

-Robert Risk Structured Settlement Services, LLC, an affiliate of Settlement Professionals, Inc. -Tulsa, OK.

We Carry "Okie"

1. The total settlement amount is the amount before the attorneys take their cut  
2. Robert Risk misleads the reader by failing to account for tax treatment of municipal bonds under IRC 103.
3. Robert Risk misleads the reader by omitting capital gains from his analysis.Only short term capital gains are taxed at ordinary income tax rates. Short term capital gains are those investments that are held for a year or less before being sold. Long-term capital gains, which apply to assets held for more than one year, are taxed at a lower rate than short-term gains. The maximum long term capital gains rate is 15% in 2010.  Based on this point alone those who work with Risk should be checking his math.
4. The net investment performance is the amount left over after deductions for investment management fees, tax and other costs have been taken away.  Net investment performance allows for both gains (positive) and losses (negative), depending on actual investment performance.

There is no excuse for the inability of any settlement professional to articulate the BASICS. Why should the rest of have to carry "Okie"?

This  "Lab-a -oscopy" brought to you by someone who cares about financial literacy in the profession.

Houston "Cat Fight" Exposes Seedy Underbelly Of Structured Settlement Factoring Industry

 
Step right up, it's two cash now pushers fighting in the sandbox.Time to break out the popcorn!

 
 
You won't see me thanking Peachtree very often but an attempt to execute a judgment over the reviled Rapid Settlements has led us to some very revealing court documents.

Only days ago constables descended upon the offices of Rapid Settlements' offices on Westheimer in Houston Texas to execute a writ of judgment stemming from a 2006 case. (2006-2366A)

During the course of the proceedings Stewie Feldman, the "proboscis" for Rapid Settlements, allegedly assaulted Paul J. Brown, of counsel to Greenberg Traurig's Houston office who represents Peachtree.

Subsequently Feldman, who some in the factoring industry might feel is as diabolical as his Griffin name sake, filed for a Temporary Restraining Order, Preliminary Injunction and Permanent Injunction in a matter styled The Feldman Law Firm, LLP and rSL Funding, LLC v Settlement Funding, LLC D/D/A Peachtree Settlement Funding (2010-03192) 113th Judicial District Court, Harris County, TX.

The Peachtree papers submitted in opposition to Feldman paint a seedy picture of Rapid Settlements as perpetual abusers of the legal system. It's a great read. Free admission at the Office of the Harris County Clerk. You will need to register to review the documents.

Kleinick "Flips The Bird!"

On the Kleinick Law website. licensed structured settlement broker" Keith Kleinick says that a "quailed funding asset* "allows NSSTA broker members to "sell" structured settlements more effectively and amounts to a huge tax benefit for the insurance companies..." Wow, one learns something new every day!

"Quailed Funding Assets"?

* as of January 25, 2010 830am EST