I recently heard a comment from a plaintiff lawyer reviewing a structured settlement proposal from an industry colleague which comment was indicative that he was told something to the effect of "not to worry about the structured settlement annuity company's ratings because they had received TARP funds". If you are that structured settlement broker or settlement planner I ask that you take stock of what you are saying because it is both irresponsible and inaccurate.
WARNING: Most states insurance laws prohibit the advertisement or discussion of even the existence of state insurance guaranty funds in connection with the sale of insurance (in New York at least, that includes solicitation in connection with the placement of structured settlement annuities). Most states insurance laws ALSO contain prohibition against using misleading statements in connection with the sale of insurance. The contracts between agents and the companies they represent as well as the codes of ethics/standards of professional conduct of their professional associations also prohibit these practices.
As part of the Emergency Econnomic Stabilization Act of 2008, the Troubled Asset Relief Program, commonly referred to as TARP, is a government program to purchase assets and equity from financial institutions to strengthen the financial sector. It is the largest component of the government's measures in late 2008 to respond to the subprime mortgage crisis. Essentially TARP allows the United States Treasury to purchase illiquid, difficult-to-value assets from banks and other financial institutions. The intent of TARP is to improve the liquidity of these assets by purchasing them using secondary market mechanisms, enabling the participating institutions to achieve a more stable balance sheet and curtail further losses.
In the case of AIG the TARP Funds flowed to American International Group, Inc., not to American International Life Assurahnce Company of New York or American General Life Insurance Company.
In the case of Hartford, the TARP funds did not go directly to Hartford Life Insurance Company, they went to Hartford Financial Services Group, Inc.
It is important that those who dispense financial advice provide accurate structured settlement information to plaintiffs and other structured settlement stakeholders.