by John Darer® CLU ChFC MSSC RSP CLTC
It's a given now that the Symetra Financial foray into the factoring business has been a very bad move. The strategy offers much fodder for discussion to MBA students for years to come. Years of good will and long standing relationships may have been irretrievably lost or damaged because of Symetra's creation of Clearscape Funding Corporation and its aggressive marketing efforts. Other life insurance companies issuing structured settlement annuities would be well advised to go to school on the Clearscape Funding's putt, lest they make the same mistakes. It was a huge mistake to run Clearscape through the same office as Symetra Life. The perception was and still is terrible. Add to that the letters that annuitant's receive under the guise of "advising them of their rights".
Patrick Hindert and others have implied in their writings that we should be advising structured settlement payment recipients, at essentially all points in the structured settlement creation and service process and beyond, of their "rights to sell their annuity payments".
The Bill of Rights (Amendments I-10 of the United States Constitution) embodies the core tenet of this nation's liberties and affect every American. By Hindert's and other's logic the United States government should be sending annual notices with your tax refund that remind you of your rights to:
- Freedom of Speech, in case you want to get up on your soap box.
- Freedom of Religion,
- Freedom of assembly, in case you want to have a parade
- Your right to bear arms. I've got two, but do we send the notice to gang members?
- No Unreasonable Searches and Seizures
- Right to Due Process
- Right against Self-Incrimination
- Right of Trial By Jury
- Right to not be subject of excess bail or cruel and unusual punishment
Are you getting my drift here?
The huge margins in factoring have attracted Wall Street and other capital markets. Perhaps some life insurance companies are being seduced privately, with higher ups salivating about the possibilities. I hope not. Some have theorized that if the life insurance companies wanted to get into factoring that it would put the majority of factoring companies out of business. If that were true it would come at a huge price. There simply can't be the perception that a company or industry which consumers have put in a position of trust could or will subsequently betray that trust. New York attorney Michael Kaplen's reaction to "advising you of your rights to sell" letters from a structured settlement annuity issuer (on The Settlement Channel) speak volumes.
Structured settlements are for spendthrift not spend swift!