Structured Settlements 4Real™ Blog: Structured Settlements | Settlement Planning News and Commentary

Dumbest Things Said About Structured Settlements-5

"When the structured settlement annuity is purchased on behalf of the plaintiff, it must be purchased by the defendant. The defendant then assigns the obligation to the assignment company, which in turn purchases the structured settlement annuity from the life insurance company".  Member of NSSTA in Lawyers Weekly publication  (emphasis added)

The operative question based on that statement...does the author of that publication even know who in the heck the structured settlement annuity buyer is? 

It is worth highlighting that the same individual writes later in the article

"Therefore, constant communication between the plaintiff’s attorney and a plaintiff-only structured settlement consultant is a must. If any of the steps are missed, it could be costly to the plaintiff."

Encouraging Financial Literacy In the Structured Settlement Profession... With Us It's Personal!

For more information on how the structured settlement process actually works please click here

 

Structured Settlements 4Real Blog Ranked in Top 15 of Blawgs by Justia

Justia Blawg search has ranked Structured Settlements 4Real 14th in its weekly ranking of legal subject matter blogs (blawgs). Ranking as of August 3, 2010

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As of August 3, 2010 Structured Settlements 4Real has an "all time ranking" of 30th

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About Structured Settlements 4Real

A popular source of news and information about Structured Settlements, Settlement Planning and Lawsuit Recovery Management, written by settlement planing expert John D. Darer, with a stable readership targeted to settlement consultants, financial professionals, lawyers, injured persons and their family members, guardians, survivors, judges, magistrates, special masters, mediators, administrators, trust companies, insurance companies, financial advisers, insurance regulators, government leaders, the media and other interested parties. Using the Alexa metric, over the last 39 months Structured Settlements 4Real has consistently ranked in the top 2 websites in the structured settlements and settlement planning  industry space with the most global traffic and 23 number 1 rankings

 

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

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.

US Treasury Bond Trust Structured Settlements...The OTHER Qualified Funding Asset

You may not be aware that a structured settlement need not only be funded with an annuity. The   Internal Revenue Code makes a provision for more than one type of qualified funding asset, to wit:

IRC 130 (d) Qualified funding asset

For purposes of this section, the term “qualified funding asset” means any annuity contract issued by a company licensed to do business as an insurance company under the laws of any State, or any obligation of the United States, if—

(1) such annuity contract or obligation is used by the assignee to fund periodic payments under any qualified assignment,

(2) the periods of the payments under the annuity contract or obligation are reasonably related to the periodic payments under the qualified assignment, and the amount of any such payment under the contract or obligation does not exceed the periodic payment to which it relates,

(3) such annuity contract or obligation is designated by the taxpayer (in such manner as the Secretary shall by regulations prescribe) as being taken into account under this section with respect to such qualified assignment, and

(4) such annuity contract or obligation is purchased by the taxpayer not more than 60 days before the date of the qualified assignment and not later than 60 days after the date of such assignment.

For the most conservative, a structured settlement funded with United States Treasury obligations offers an attractive alternative, particularly when part of a structured settlement trust funded with a combination of TIPS (Treasury Inflation Protection Securities) and STRIPS

What about the threat of inflation?  Here is a sampling of news reports in the last 9 months:

" No Near Term Inflation Threat" Charles Plosser, Philadelphia Federal Reserve Bank  11/12/2009. He also said  "While inflation is not a threat for now, the United States will have to look very hard at reversing course on rates as the economy strengthens"

"Inflation will likely rise 6% by the end of 2011 and to 7.5% by mid-2012"  economist Alan Beaulieu of Institute for Trend Research. October 2009

“I am 100 percent sure that the U.S. will go into hyperinflation,” Investor Marc Faber said to Bloomberg May 27, 2009. “The problem with government debt growing so much is that when the time will come and the Fed should increase interest rates, they will be very reluctant to do so and so inflation will start to accelerate.”

United States Treasury Bond Structured Settlements

Think about it!

Shame on "Proud Member of NSSTA" and Board Member Who Continues to "Dis" Organization

James E. Logan may be an incredibly nice guy and a board member of the National Structured Settlement Trade Association but, in the opinion of this author, is setting a poor example for the rest of the industry by marketing to the public that he has a Certified Structured Settlement Consultant (CSSC) from University of Notre Dame.

According to NSSTA Executive Director Joe Ricci,  the NSSTA Board of Directors of which Jim Logan is member voted on the official NSSTA guidelines for Promoting The CSSC professional certification. NSSTA guidelines clearly state that it is the NSSTA CSSC. Attendees write checks to NSSTA for the tuition not University of Notre Dame. The vote took place between July 2009 and August 2009 subsequent to which an e-letter was circulated to all NSSTA members, including Logan. 

On July 14, 2009 Jim Logan was copied on the following email which  linked to the author's blog post describing his letter to University of Notre Dame requesting the institution's position on the manner in which some CSSC certificants were holding themselves out to the public with respect to the institution.  Download JDD letter to NSSTA Board and Company heads 7-14-2009 re letter to UND

The website of James E. Logan, Ltd. claims Logan is "a proud member of the NSSTA". If Jim Logan really is "a proud member of the NSSTA" then why does Logan continue to show the NSSTA disrespect (by not following the guidelines that were voted on by the NSSTA board)? Other NSSTA board members (and former board members) have taken the minutes it takes to correct their bios. What is holding up NSSTA board member Jim Logan's efforts to comply?

Leaders have a responsibility to set an example "because they have a powerful influence on the moral behavior of others.  If the leader is rewarded or not punished for specific acts, it may be taken as a cue by a an observant subordinate that the leader's behavior is desirable or at least acceptable to that situation. Similarly if the leader is punished the observer may learn to inhibit such behavior"  Source: Academy Leadership.

CSSC ... Something Else To "Carp" About

NSSTA Board member James E. Logan of Detroit and other settlement industry credential puffers MAY not yet fully appreciate the subtleties of the confusion they create by not appropriately associating the professional certification with the National Structured Settlement Trade Association, on their websites and/or marketing materials. Given the following October 14, 2009 news story about the "CSSC" from just across Lake Michigan, perhaps Mr. Logan and others will be encouraged to make a distinction.

The story from The Great Lakes United:

"As invasive Asian carp bear down on the electrical barrier operating in the Chicago Sanitary and Ship Canal (CSSC) in Illinois, environmental and conservation groups are calling on the U.S. Army Corps of Engineers to take emergency action to stop the threat now and to look at the separation of the Mississippi River from the Great Lakes as a permanent solution.

The CSSC is a man-made waterway that connects Lake Michigan to the Mississippi River basin. Originally intended as a means for the city of Chicago to overcome sewage problems in the early 20th century, it created an artificial connection through which aquatic invasive species can pass in both directions. The electric barrier is located near Romeoville, Illinois on the CSSC. A new DNA monitoring technique being used by the U.S. Army Corps of Engineers, in conjunction with the University of Notre Dame, found that invasive Asian carp are a mere mile from the electric barrier in the CSSC".

Stop "Pervasive" Credential Puffers from Wreaking Havoc on the the NSSTA CSSC professional certification!

Settlement Consultants Who Flout NSSTA Guidelines for Promoting the CSSC 

How Not To Kill Your Client's Structured Settlement By Fumbling At The Goal Line

Epitaph for a would-be structured settlement:

Documentation that says in pertinent part  " For the consideration of Five Hundred Thousand ($500,000.00) the receipt and sufficiency of which is hereby acknowledged, plaintiff hereby releases, remises...

" Plaintiff has been advised by counsel...

Followed by client's signature

Action Followed by fax to defense counsel.

CONSTRUCTIVE RECEIPT...Two big words. One fatal tax principal.  Possible E&O Claim.

Practice Tip: If your client is going to structure then the consideration must include the periodic payments as consideration, not the cost of the payments.

"The Logan Report"

Revered NSSTA Board Member Jim Logan continues to characterize an industry professional certification in a manner that* is misleading, and inconsistent with the guidelines set down and perhaps voted on by the Board on which he serves. How can this be?

Here is Jim's profile.

Here is the NSSTA webpage entitled Promoting the CSSC

I have always known Jim to be a decent human being. Why is he doing this?

How can we have faith in, or continue to respect the people we call leaders, if THEY don't even follow the rules and guidelines THEY set?

As we move into the next phase of our watchdog commentary we intend to single out others who choose to continue to characterize the CSSC certification in a manner that is both misleading, and inconsistent with the guidelines set forth by NSSTA. Not that there was ever anything in doubt, but at this point there are no excuses.

* at the time of this post

MetLife "SIGNIFICANT INCREASE in Structured Settlement Sales"

On the one year anniversary of the 2008 "epicenter of bad news", positive news is coming from MetLife. William J. Wheeler CFO of MetLife, Inc. said that Met is gaining market share in every one of its lines of business, according to a Dow Jones report posted on the NASDAQ website. In the Barclay's Capital Investment conference Wheeler also said that there has been " a significant increase in structured settlement sales".

The primary underwriting company for MetLife structured settlements is Metropolitan Life Insurance Company, the country's largest life insurance company, which enjoys the following current financial ratings:

          

AM Best                     Fitch                             Moodys                               S&P

A+

AA

Aa2

AA-