by Structured Settlement Watchdog®
The North Carolina Lawyers Weekly reported on August 17, 2009 that on August 7, 2009 North Carolina governor Bev Perdue signed legislation that will add an extra layer of security to those receiving payments from structured settlement annuities.
The legal publication reports that the N.C. Life and Health Insurance Guaranty Association, which provides coverage if a member insurance company becomes insolvent, has increased limits from a maximum of $300,000 to $1,000,000 to North Carolina residents who receive payments from annuities that were purchased in connection with their structured settlement. The $1 million limit, which Millennium Settlements' Bryan Milner refers to as a "spare tire" in the article, is the highest in the country. It also provides coverage for that amount to non-resident payees if the insurer that issues the annuity is domiciled in North Carolina and the state in which the contract owner resides has a guaranty association similar to the one in North Carolina.
While the aforementioned is good news what is particularly troubling is the possibility that structured settlement industry colleagues are breaking the law.
In the August 17, 2009 article R. James Lore, a Cary, NC attorney is quoted as saying that "many of the structured settlement companies were selling these annuities and telling people they had coverage from the guaranty fund, and meanwhile, the guaranty fund was saying there was no coverage here.
Who are these structured settlement companies? If what Lore said is true, the behavior of these "structured settlement companies" appears to violate the following North Carolina statute.
N.C. GS 58-62-96 (a) No person shall make, publish, disseminate, circulate, or place before the public, or cause directly or indirectly to be made, published, disseminated, circulated, or placed before the public, in any newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio station or television station, or in any other way, any oral or written advertisement, announcement, or statement that uses the existence of the Association or this Article for the purpose of sale or solicitation of or inducement to purchase any kind of insurance covered by this Article.
North Carolina Life & Health Guaranty Association prohibition on advertising (N.C. GS 58-62-96)
I was recently shopping for a new car. As part of showing me the features of the vehicle I was thinking about acquiring, the salesman discussed the "spare tire". Does a similar orientation violate the law when it comes to selling insurance? Would the use of a "spare tire" in an insurance sales presentation, earn you a "ticket", OR put a "flat tire" on your insurance career?