by John Darer CLU ChFC CSSC RSP
NSSTA reports that as part of its efforts to assure that all ELNY “shortfall” payees have the opportunity to pursue recoveries from the ELNY Hardship Fund, the Fund’s administrators at JAMS have begun contacting owners of ELNY annuities that fund buy-and-hold settlements. In other words "JAMS on it".
Of course the irony is not lost of a firm founded in 1982 when ELNY was in its pomp, that inspires a creative nod to this 1984 hip-hop classic by Brooklyn New York's Newcleus, that might very well have been spinning on the turntables (no CDs or mp3s back then) of ELNY victims, their families, lawyers , claims adjusters, structured settlement brokers or the "Victrolas" of state regulators of the time, concurrent with placement of ELNY products subject to the Hardship Fund.
Buy and hold structured settlements, which are owned by the Defendant or the Defendant's insurer, were common for personal injury settlements prior to the Periodic Payment Settlement Act of 1982 (effective January 1983) and structured settlements used to fund workers compensation cases prior to August 5, 1997.
JAMS is asking the annuity owners whether they plan to make their payees whole. JAMS wants to know the annuity owners’ intentions because:
(i) “Shortfall” payees who will be made whole by annuity owners are not eligible for Hardship Fund distributions (which are intended to support payees who have no other source of recovery); and
(ii) “Shortfall” payees under many buy-and-hold settlements have not applied to the Hardship Fund. If a payee has chosen not to apply to the Hardship Fund because he or she expects to recover from an annuity owner, JAMS has no reason for concern. On the other hand, if a payee has not applied to the Hardship Fund and has no assurance of receiving payments from an annuity owner, JAMS may want to follow-up directly with the payee.
NSSTA has suggested that its members with clients owning ELNY annuities may wish to alert those clients to the possibility that they will hear from JAMS.