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

Barbados Rocks For Non Qualified Assignments!

Since Barco Assignments, Ltd. was setup as a non qualified assignment company for the Liberty Mutual structured settlement program,z in the late 1990s, others have followed to the former British colony that is the birthplace of the Grammy award winning singer Rihanna.

In a clear indication that the Barbados offshore assignment company for non qualified structured settlements has gained greater acceptance, in addition to Allstate and Prudential (whose Pruco operation was closed in 2009) it is now estimated that Barbados is home to close to half a dozen non qualified assignment companies.

In addition to  BARCO (Liberty) and Allstate International Assignments, Ltd. which are backed guarantees or agreements to pay by life insurance companies regulated by as many as 50 states, this author understands that the last 18 months has brought the following new  entrants:

• St James Group  (although this group was behind Prudential's operation on the island it now markets its own non qualified assignment operation to accredited investors).
• Evolve Assignments, Ltd (supports IFS Corp Fee Structure Plus Product that is marketed by representatives of IFS companies such as EPS, SFA, Millennium and MTSS)
• TFSS1 (Midwest Trust non qualified assignment facility using United States Treasury obligations)that is in the process of roll-out.

 

In addition to the Barbados facilities there is Kenmare Assignments, Ltd., an innovative non qualified assignment facility in the Republic of Ireland.

All in all more deferred compensation solutions than ever for taxable damages, for those paid via contingency fees, those who have low basis high value real estate or businesses, celebrities who expect endorsement fees that would simply add to already high income, lotteries contest winnings and structured attorney fees

If you want to know more about why an offshore assignment company is necessary you may find this short video helpful.

 

Structured Settlement Annuity Issuers Weiss Financial Strength Ratings

Allstate Life Insurance Company                               B

Allstate Life Insurance Company of New York             B+

American General Life Insurance Company                C+

Berkshire Hathaway Life of Nebraska                        C+

Columbia Insurance Company                                    C+

(guarantor of periodic  payment obligations assigned to BHG Structured Settlements, Inc.)

First Symetra Life Insurance Company                        B

John Hancock Life Insuracnce Company (USA)             B

John Hancock Life Insurance Company of New York      A-

Liberty Life Assurance Company of Boston                  B

Liberty Mutual Insurance Company                              B

(guarantor of structured settlement annuity issuer  Liberty Life Assurance of Boston)

MetLife Insurance Company of Connecticut                  B

Metropolitan Life Insurance Company                          B

New York Life Insurance Company                                A-

New York Life Insurance and Annuity Corporation          A-  

(NY Life qualified assignment company)

The Prudential Insurance Company of America              B

Pacific Life and Annuity Company                                 A-

 

Symetra Life Insurance Company                                  B+

United Of Omaha                                                         B+  (coming soon)

United States Life in City of NY / AI Life                       C+

USAA Life Insurance Company                                      A-

USAA Life (NY)                                                            B+

 

Ratings compiled as of June 6, 2011.

According to its website, "Weiss Ratings tracks the financial safety of approximately 875 U.S. life and annuity insurance companies each and every quarter. It issues Weiss Financial Strength Ratings based on Weiss' analysts' review of publicly available information collected by the NAIC, and supplemented by data that Weiss says it collects directly from the companies themselves. Weiss does not accept compensation from the companies it rates for issuing the ratings, and thus does not allow companies to influence the ratings they receive or to suppress the release of their ratings".

One of the insurers listed above has contacted this author following publication of this report and pointed out that Weiss did not contact his or her company.

Click here for more information about the companies that write structured settlement annuities including third party ratings from Standard & Poors, Moodys, Fitch and addresses of the company home offices.

 

 

Give Me Life But Don't Give Me Their Best (Rating)

Recent press that A.M. Best downgraded Liberty Life Insurance Company has not gone down well in Boston. The Greenville, SC company is headquartered in Greenville, SC,  was downgraded from A- (Excellent) to B++ (Good).  HOWEVER... we can settle the resulting confusion by telling you, categorically,

Liberty Life Insurance Company (of South Carolina) IS NOT a member of Liberty Mutual Group, parent of structured settlement annuity issuer Liberty Life Assurance Company of Boston.  Both Liberty Life Assurance Company of Boston’s and Liberty Mutual Insurance Company’s current financial strength rating is ‘A’ (Excellent – according to A.M. Best’s published ratings definitions). 

 

 

 

Leave it to a notable Virginian to settle the differences between "The Patriots" and "The Gamecocks", albeit in a paraphrase

 

 

 

 

  "The Virginian Patriot"    Patrick Henry

Structured Settlement Returns Improving

Happy days are here again in the structured settlement market as annuity rates continue to improve with a slew of cost decreases announced this week. The improving rate environment makes it all the more important to employ a multi step strategy to get the best deal. Decide on the type of payment stream or streams first and then shop the market for daily rates.

Some companies aren't always competitive at first glance, yet when push comes to shove they are there or thereabouts for the type of business they have an appetite for. Liberty Life Assurance Company of Boston's latest increase states that their rates may be 4.6% better in some cases.

All this good news means that the old rush to lock in rates may not be in the plaintiff's best interest where there is a long funding horizon.  At some point you do need to lock in, but I occasionally see brokers locking in rates way too early,  sometimes months before papers are ready to be submitted to the Court for approval.

 

 

 

Liberty Life Structured Settlements Extends Free Lock In Period

More good news for structured settlements! Liberty Life Assurance Company of Boston announced April 1, 2011 that effective immediately, the free lock-in period for all cases locked-in 4/1/11 or after has been extended from 30 to 60 days. Liberty Life officials confirmed that this IS NOT an April Fool's joke!

Liberty Life Assurance Company of Boston is a subsidiary of Liberty Mutual Insurance Company. Whether or not your structured settlement neds are qualified or non qualified, the Liberty Mutual structured settlement program has two guarantees.

Traditional structured settlement obligations funded through its qualified assignee Liberty Assignment Corporation, are guaranteed by Liberty Life Assurance Company of Boston. Liberty Life Assurance Company of Boston, in turn, is guaranteed by Liberty Mutual Insurance Company, one of the world's largest insurers and a leading workers compensation insurer.

Non qualified assignments of periodic payment obligations funded through its assignee Barco Assignments, Ltd. are similarly guaranteed by Liberty Life Assurance Company of Boston. Liberty Life Assurance Company of Boston, in turn, is guaranteed by Liberty Mutual Insurance Company.

For more information about structured settlement lock-ins and how they affect structured settlement quotes, please watch my educational video podcast

 

Barco Assignments, Ltd., Non Qualified Assignment Company, Gets Financial Commitment From Liberty Life!

The Liberty Life Assurance Company of Boston/Liberty Mutual Insurance Company/ BARCO non qualified assignment program has improved following an announcement that Liberty Life Assurance Company of Boston will issue a Notice of Financial Commitment (in the sample form hyperlinked below) where Barco Assignments, Ltd ("Barco") has entered into a non qualified assignment agreement to assume the periodic payment obligations with claimants.

Barco is one of two non qualified assignment companies domiciled in Barbados. The other is Allstate International Assignments Ltd. A favorable tax treaty between Barbados and the United States coupled with the tax inefficiency of corporate ownership of annuities on US soil makes Barbados entity one of the domiciles of choice. Another non qualified assignment company, Kenmare Assignments, Ltd, is domiciled in Ireland.

The above diagram graphically illustrates the interplay between the various companies that contribute to the high level of financial security for payees under the Barco/Liberty non qualified assignment program.

The notice is in the form of a "keep well" agreement. Quoting from the notice**...

"Liberty Life will ensure that Barco has the minimum amount of net assets required to conduct business under Barbados law, and if at any time Barco has insufficient funds to make any required payment under the terms of any obligation it has to a creditor, Liberty Life will contribute to Barco the funds Barco needs in order to meet its payment obligations".

Moreover, in the event that Liberty Life Assurance Company of Boston decides to terminate the financial commitment, it states that it will satisfy those obligations that predated the termination of the commitment.

The obligatons of Liberty Life Assurance Company of Boston are backed by Liberty Mutual Insurance Company. Liberty Mutual Insurance Company, founded in 1912, is the 5th largest P&C insurance company in the United States. At the end of the 3rd quarter of 2010 it had $65B in assets.

Helpful Links

• Information about non qualified assignments
• **Download BARCO Notice of Financial Commitment for Non Qualified Assignment for the full terms
  
• Need a Non Qualified Structured Settlement quote?
• Barco Assignments Ltd. website

Structured Settlements: Liberty Life Assurance of Boston Strengthens Guarantee of Qualified Assignment Company

Liberty Life Assurance Company of Boston, a subsidiary of Liberty Mutual Insurance Company has made a significant improvement to its structured settlement product offering.

Effective November 1, 2010 qualified structured settlements assigned to Liberty Assignment Corporation will carry the guarantee of Liberty Life Assurance Company of Boston. A company spokesperson said that the new guarantee is in addition to the existing Liberty Mutual guarantee of Liberty Life Assurance Company of Boston.

The new guarantee is a welcome addition and fills the void left when Liberty Mutual stopped issuing surety bonds to back up the qualified assignee on new structured settlements several years ago. Since then, (up until November 1, 2010)  the only guarantee in place was the unusual and unique guarantee by parent Liberty Mutual Insurance Company of the annuity issuer (as opposed to the assignee). 

The structured settlement process is illustrated in the flow diagram set forth below and gives the reader a better visual of how the two guarantees fit into the picture. The guarantees are also summarized below

Summary of Liberty Mutual Structured Settlements Guarantees  (effective November 1, 2010)

• Guarantee of performance of qualified assignee, Liberty Assignment Corporation, by Liberty Life Assurance Company of Boston.  Download LibertyLifeAssuranceBostonGuaranteeAssignment
• Guarantee of performance of Liberty Life Assurance Company of Boston by Liberty Mutual Insurance Company, a Fortune 100 company.  Download LibertyMutualCorporateGuaranteeLibertyLifeBoston.
  

Is An Improvement to Non Qualified Assignment Program Coming?

Liberty Life is encouraged to develop a similar guarantee for its non qualified assignee,  BARCO Assignments, Ltd. How about it Liberty?

 

Liberty Life Assurance Company of Boston Affirmed at "A" by A.M. Best

Liberty Life Assurance Company of Boston has been affirmed at an A (Excellent) Rating by A.M. Best along with the rest of the Liberty Mutual Group of insurance companies. The affirmation was announced in an A.M.Best press release dated June 11, 2010.

Liberty Life Assurance Company of Boston is an issuer of structured settlement annuities used in the resolution of personal injury lawsuits, workers compensation claims. In addition, through its appointed brokers and Barco Assignments, Ltd. facility, the company provides funding instruments for use with non qualified assignments, used to fund innovative periodic payment solutions to many other types of legal disputes and structured attorney fees.

Weiss Ratings of Structured Settlement Annuity Companies

With all the brouhaha about rating agencies being paid to rate it should be noted that Weiss Research DOES NOT charge a fee to the companies being rated, to be rated.

Latest Ratings:

A-

John Hancock Life Insurance Company of New York

New York Life Insurance Company

New York Life Insurance and Annuity Corporation (the qualified assignee of New York Life structured settlements)

Pacific Life and Annuity Company

B+

Allstate Life Insurance Company

B

Allstate Life Insurance Comapny of New York

John Hancock Life insurance Company (U.S.A.)

Symetra Life Insurance Company

B-

Metropolitan Life Insurance Comapny

Liberty Life Assurance Company of Boston

C+

American General Life Insurance Company

American International Life Assurance Company of New York

The Prudential Insurance Company of America

 

Structured Settlement Guarantees

What is the nature of structured settlement guarantees? This important question has an answer that should be part of the fundamental body of knowledge possessed by any qualified structured settlement consultant  that a lawyer, plaintiff, defendant, or insurer, chooses to engage. I continue to be disappointed when I see settlement consultants spreading inaccurate information to the public. Lawyers who then promote such inaccurate information simply foment financial illiteracy. That's not good.

Christopher R. Nicholls' NC Trial Lawyer Blog posted a Millennium Settlements sales piece by Bryan Milner on or about September 16, 2008. It still appears at the time of posting on January 10, 2010. This author acknowledges that while the spirit of the piece was pure, the inaccuracies bring its continued posting by both the NC Trial Lawyer Blog and Millennium Settlements (linked at Bryan Milner bio) into question.

Here's an excerpt, followed by my comments on the inaccuracy:

"Q:  If the life insurance company holding my annuity fails, what happens to my structured settlement?   

A:  The insurance companies are subject to regulations that require them to have assets set aside and earmarked solely for the purpose of meeting their obligations to policyholders .  Even in bankruptcy, these funds are not touchable, and would still be there for the purpose of honoring their commitments.   In addition, each life company that offers structured settlement annuities provides a guarantee from their holding assignment company that the scheduled payments will be made to the claimant.  A document with the details of the guarantee are included in each structured settlement annuity policy. "

Comments

If there is a structured settlement the life insurance company is not "holding" the annuity, nor is the assignment company its holding company. If your structured settlement involved a "qualified assignment"  and is funded with an annuity, THEN the annuity is "held" or "owned" by the qualified assignment company. If your structured settlement did not involve a "qualified assignment" THEN it is owned by the defendant or the defendant's insurer. Click for details of the structured settlement process, including a structured settlement flow chart/diagram

When there is a qualified assignment the defendant or its insurer's obligation to make periodic payments to you or your client is transferred to the qualified assignment company. This is done with your consent and knowledge and should be reflected in the settlement documents It's important to note that with a few exceptions the qualified assignment company is a special purpose entity that only holds annuities funding the periodic payment obligations it has assumed. Thus the putative value of a putative "guarantee" from the "holding assignment company" is worthless.

In the case of New York Life Insurance Company structured settlements the qualified assignment company is an actual insurance company. It is the only one. Its assumed obligations under qualified assignments are further guaranteed by the annuity issuer, New York Life Insurance Company.

All but four of the currently writing annuity issuers of stuctured settlements have a guarantee of the qualified assignment company by the annuity issuer.

1. The assumed obligations of American General Life's qualified assignment company are guaranteed by AGC Life Insurance Company, an upstream holding company
2. The assumed obligations of Pacific life and Annuity Company's qualified assignment company are guaranteed by Pacific Lifecorp, an upstream holding company
3. The assumed obligations of Allstate Life Insurance Company of New York's qualified assignment company are guaranteed by Allstate Life Insurance Company
4. The assumed obligations of American International Life Assurance Company of New York's qualified assignment company have no guarantee.
5. The assumed obligations of Liberty Life Assurance Company of Boston are not guaranteed by its qualified assignment company, Liberty Assignment Corporation. Liberty Mutual Insurance Company, not the qualified assignment company, guarantees that payments will be made by the annuity issuer

The same postings include a discussion about state guaranty funds. There is a strict prohibition against insurance agents using the existence of state guaranty funds in any solicitation for insurance, including structured settlements which, when funded with an annuity, are a form of insurance.

Finally,  insurance companies in general, MAY NOT file for bankruptcy. 11 U.S.C. § 109  governs which entities are permitted to file a bankruptcy petition.  Special state and federal laws govern the liquidation or reorganization of domestic American insurers. In a U.S.context, it is inccurate to refer to an insurer as being "bankrupt". The terms "insolvent", "in liquidation", or "in receivership" would be appropriate under some circumstances.