by John Darer® CLU ChFC MSSC RSP CLTC
Has any one out there run into the following situation? It purportedly involves a structured settlement broker and the following peculiar proposed structured settlement transaction. As I understand it the broker in question, who was representing the plaintiff, through his client the plaintiff attorney, asks that the defense make the structured settlement funding check be made payable to " (Name of Structured Settlement Firm) Assignment Company". As I further understand, the broker in question uses a traditional life insurance company quote from a well known large life insurance company as a basis of what to promise the plaintiffs in submitting the matter for approval to the Court. The papers purportedly state that the (Name of Structured Settlement Firm) "may purchase" and own annuities and be the obligor under the transaction. And....purportedly.... the broker in question was going to pay an amount less to the plaintiff than the annuity was paying.
That the plaintiff attorney's radar didn't catch this is question enough, but had this purported proposed transaction occurred, who would guarantee the performance of the obligor (Name of Structured Settlement Company)? What exposure does the plaintiff attorney have for agreeing to such a transaction?
Some points for consideration:
Generally with standard qualified assignments there is a guarantee backing up the assignee/obligor of any structured settlement.
Who would you want guaranteeing your structured settlement , an A+ or A++ rated insurer with billions in assets or (Name of Structured Settlement Firm) Assignment Company?
Assuming that the firm in question is a related company of the plaintiff's broker and the plaintiff's broker is the plaintiff's agent, is there any negative effect on the plaintiff's tax consequences as a result of performing in a dual role in that transaction. Food for thought.
If any one has any further information about this purported transaction or has run into a structured settlement broker proposing such transaction please contact me.