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November 02, 2007

The Word "Partner" Has "Significant Legal Connotations" That Don't Exist in Structured Settlements

by Structured Settlement Watchdog

The word "partner" is often used loosely in business today. The word "partner" has a legal connotation however, which may

Howdy partner howdy pardner
"Structured settlement cowboy"

characterize or convey something to the public about your structured settlement broker or settlement planner's relationship to that insurance company that may not be legally correct.

When Howdy Partner Turns Into "Howdy Doody"
With this in mind, and in the spirit of the best practices guide that I am developing, I have asked the annuity issuing life companies to respond with their company's position  with respect to the following two questions:

1. Is an appointed general agency and/or appointed agent or sub agent legally a partner in your company?

2. Does the compliance department in your company condone the use of the word "partner" in advertising or on web sites of appointed general agencies or appointed agents and/or sub-agents of that general agency.

Here are four of the responses:

Company A. "Thanks for the question. Your relationship with XXXXX  is solely and legally as a "licensed insurance agent". Do no use the word partner in any way as that has significantly different legal connotations. As a reminder, you agency contract dictates that any use of our  name in any external advertising (website, flyers, advertising, etc..) must be approved by XXXXX Legal before proceeding."

Company B. "I've been in discussions this week with our legal department regarding this issue. We are drafting a letter to an agency that is currently referring to themselves as an XXXXX Life partner with a requirement to stop using the term "partner" when describing their relationship with XXXXX Life. Since agents or sub-agents are not our partners in the legal sense of the word, the term cannot be used in advertising or web site descriptions."
X------------------------------------------------------------X
 
 
Company C."The position of XXXXX  is substantially similar to the position stated in your website.  We don't permit the use of the word "partner", or "partnering", etc. in advertisements.  We might describe close working relationship between two business entities that were not legal partners, with terms such as a "strategic alliance". (added 11/7/2007)
X------------------------------------------------------------X
 
Company D. "If the word is seen in advertising, they ask that it be removed because of the legal connotation the word has.  AAAA said that a generic-enough reference such as, "Our organization partners with these companies to bring you the best products possible" is fine.  However, any inference that an entity is a partner with XXXXXX that draws the conclusion of a legal partnership is not acceptable".

Plaintiffs, Lawyers, Insurance Company claims representatives, Judges and Trial Lawyer Associations should be aware of that the use of the word "partner" may not be permitted under the contract between the person or company soliciting you for business or for your approval of the settlement and may indeed be considered a violation of truth in advertising rules in your state.

As a point of interest, Insurance agencies or agents who use the word "partner" in conjunction to an agency relationship may be needlessly exposing themselves to "bad faith" lawsuits against the annuity issuers or the qualified assignees (particularly an assignee that is  a property casualty company).  According to the Business Dictionary "partnership by estoppel" is a legally binding partnership that may arise where, in fact, no formal partnership agreement is in effect. A person who by conduct or words represents, or allows him/herself to be represented, as a partner in a firm is liable for the credit or loans obtained by firm on the basis of such representation. Also called presumption of partnership."   WOW! WOW and WOW!

 

Posted at 12:52 PM in Settlement Consultants, Settlement Planner Business Practices, Settlement Planning Ethics, Structured Settlement Broker Business Practices, Structured Settlement Information, Structured Settlement Practice for Judges, Structured Settlement Watchdog®, Structured Settlements, Truth in Advertising Structured Settlements |

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  • Treasury Funded Structured Settlements
    Treasury Funded Structured Settlements are a settlement option for the most conservative using the OTHER permissible qualified funding asset under IRC 130(d), United States Treasury Bonds in addition to, or instead of, structured settlement annuities. Treasury Funded Structured Settlements can also be used to fund installment sales, also known as structured sales and other non qualified structured settlements.
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    Use the Taxable Equivalent Yield chart to help compare the Internal Rate of Return (IRR) of a structured settlement to other alternative or complementary investments. Need help with the chart? Call 4structures.com® LLC at 888-325-8640
  • Structured Settlement Payments | Types of Structured Settlements
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  • Structured Attorney Fees for Tax Deferral for Contingency Fees
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  • What Are Structured Settlement Annuities?
    Structured settlement annuities are annuities that can provide one or more customized annuity payment streams in a single contract. Read about structured settlement annuities here.
  • History of Structured Settlements
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  • What Are Market Based Structured Settlements?
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Qualified Settlement Funds

  • What is a Qualified Settlement Fund?
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  • Firmwide Qualified Settlement Funds Debunked
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Structured Settlement Best Practices Corner

  • New York Insurance Advertising law requires the full name of the Insurer to be listed along with the city and state of the principal office. Stating that you represent these fine companies using Insurance company logos without the preceding information are also illegal
  • When it comes to settlement documents it is the ultimate responsibility of the lawyers or claims adjusters who receive input concerning the structured settlement aspects of the documents to actually read the entire document, exercise independent thought and advise their clients properly
  • Be aware that financial advisors use of testimonials is prohibited or restricted
  • Most states require that Testimonials represent the CURRENT opinion of the person who made the testimonial. Be prepared to back it up.
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