by John Darer CLU ChFC CSSC
Structured settlement brokers place structured settlements which are typically funded with customizable structured settlement annuities. Since annuities are insurance products, before a structured settlement broker can be paid, he or she must hold a valid insurance license in compliance with the laws of the states governing the transaction. Most structured settlement brokers are affiliated with a producer group of other structured settlement brokers. The producer groups may be run as a company model or under a business model that offers its producers more independence with respect to marketing and business development. The industry accommodates the "must be on a salary" types as well as the true ambitious entrepreneurs who thrive on sowing seeds of potential business relationships and watching them grow.
Brokers can be retained by either side or both parties on a case or multiple parties and, like a real estate transaction it is now common place for brokers to split commissions (between two or more brokers or firms). The commissions earned on the placement of a structured settlement annuity are paid by the life insurance company issuing the annuity, which treats them as a marketing expense and not the defendant or the defendant's insurance company.
Unless rebating is declared legal (which change in the insurance law of Connecticut and others I don't expect to be forthcoming) the lack of one side's broker being compensated in the structured settlement transaction makes absolutely no difference to the benefits to the plaintiff where a structured settlement annuity is placed.
In my opinion the odd structured settlement broker who rebates to anyone, in violation of state laws, is a fool who runs the risk of losing his or her insurance license and destroying a lucrative career.
Some of the better structured settlement brokers are practicing disclosure through the use of a Structured Settlement Affidavit or Certificate of Reliability and Assurance