By John Darer
Several ELNY victims are profiled in this January 8, 2013 New York Daily News article that followed a recent press conference featuring ELNY victims and their attorneys
I found the comments to be as interesting as the article, particularly the observations of MFHudson who wrote
"...as any accident victim knows, when settlement is made in their cases, judges want to see that the victim is cared for for life, that the award will not run out when the victim most needs it. Thus the Structured Settlement industry. Victims don't choose these companies and are in no position to know which are secure and conservatively managed, but their lawyers do. Lawyers recommend them to their clients (and take a large percentage of the award), judges are relieved and approve the settlement. Anyone who believes that Structured Settlement policies are secure after this group of ELNY policyholders are left hanging out to dry should examine the industry itself, as well as those seemingly well-meaning regulators who assert their obligation to take policyholders under their protective wings"
Back in the 1980s what Judson says may have been the case, but in 2013, most plaintiffs and plaintiff lawyers do or should retain their own structured settlement experts or settlement planners who participate in the discussion and engage plaintiffs and their guardians and judges. The New York General Obligations Law even provides for it [NY GOL 5-1702(e) ]
I was not in the structured settlement industry when most of the ELNY annuities were being sold, but I WAS in the insurance industry competing against ELNY, mostly successfully. I competed successfully because I ran with a company whose then 125 plus year history, put ELNY to shame.
If I had been in the structured settlement industry at the time I surely would have raised the red flags of Charter and Baldwin United (which did not involve structures but were very much in the news at the time) and would have urged the plaintiffs (and guardians, lawyers) of the benefits of, and need to, diversify.
When I see blanket comments like Hudson's I feel the need to emphasize there is a need to balance sympathy for ELNY victims, ( some of whom were minors when their structured settlement was consummated and had no say in the sole placement of ELNY) and their right to vent, with a harsh reality that the victims DO NOT share with everyone who has ever entered into a structured settlement. Those that choose to attack my industry and misinform others with a misleading generalization simply impugn their own credibilty.
The fact is that structured settlement annuities with life insurance companies such as MetLife, New York Life and others were available then, but were not placed, perhaps not recommended, not insisted upon, not accepted or simply ignored. Even smaller players like Presidential Life, which was painted with as similar brand "junk bond brush" as ELNY survived, and the aforementioned companies are still paying structured settlement annuitants exactlly what was promised. The latter recently merged with Athene Annuity and Life Assurance Company. Athene Annuity has roots that go back over 100 years.
The attorneys for ELNY victims are proceeding on the basis that ELNY was solvent when it was taken over and that the ELNY victims are due to suffer from alleged mismanagement that occurred at the hands of regulators, with the New York Liquidation Bureau front and center. Confidence in regulators is important for the welfare of all.