Did Former Structured Settlement Annuity Issuer Sell List of Annuitants to Factoring Company?

So far we've been able to establish that some insurance companies buy structured settlement payment rights through securitizations of such assets by factoring companies.

The structured settlement watchdog has recently come to learn that the annuitant list of several former structured settlement annuity issuers was "acquired" by a Florida based factoring company.  The structured settlement watchdog has learned that this information was brought to the attention of the Board of Directors of the National Structured Settlement Trade Association in the past several years. During that period there were life insurer representatives sitting on the Board.

Is it possible that the same or other factoring company has made, or offered to pay financial incentives to insurers for their client lists? How many have accepted such financial incentives?

The structured settlement watchdog has personally received, and has heard for others who have received, a number of calls from upset annuitants who have questioned how they have been targeted directly by one of these factoring companies when the settlement transaction is supposed to be confidential. For those settlement brokers and planners that are contacted by their own clients this may lead to misplaced blame and dented credibility.

The structured settlement transparency initiative was started in part due to information passed to the structured settlement watchdog in 2007 that a broker was selling names of clients to a factoring entity. Now we're talking an insurer with tens of thousands of structured settlement annuitants.

This is not an indictment of factoring. This is the question of expectation of privacy in financial transactions.

In the immortal words of that time traveling scientist Dr. Emmett Brown " your future hasn't been written yet" 

Nobody can be clairvoyant about every event that will happen in a person's future. Often a good financial planner will conduct periodic reviews of a financial plan with a client to be sure that it meets a client's current needs, particularly after life changing events like birth of a child, death of a  spouse, loss of a job, a raise, major illness not covered by insurance, starting a business. Thus factoring has its place. We encourage annuitants to shop around and not to simply take the first offer from the big TV advertisers.

What is a concern however is the idea that you take a structured settlement annuity and a life insurer is potentially selling your name and other personal identifiable information to a third party, whose solicitation practices are unregulated and/or unenforced,  that's going to call you incessantly to bug you to sell your structure, or strafe you with junk mail. Perhaps this is done on an opt-in basis where you get a statement stuffer asking you if you want to receive "carefully selected products and services from third parties".

Given that insurers are atttracted to securitzations of structured settlement payment rights, is it possible that some could be similarly atrracted to financial incentives offered by some factoring company, to encourage their own annuitants to sell their payment rights to a company which will then securitize the cahs flows and sell the securitization of the payment rights back to the company?  How can we be sure this isn't going on right here and right now?

The structured settlement watchdog encourages those managing the structured settlement programs at those insurers currently writing structured annuities to disclose to their agents their business practices in this area.

 

Comments

[John Darer]

Steve, there is a name of both insurer and acquirer from a reputable source. Ive chosen not to reveal the names at this time.

[Steve Craig]

If this is true it is crushing to the trust, faith and credibility that the life insurance companies writing structured settlements have wooked so hard to earn. Worse for them is that trust is the underpinning of their entire franchise.

But what, I believe, I am reading here John, is this is still speculation. So far at least, your source is unnamed and the carriers in question are also unnamed. No "smoking gun" documents have been posted...

So, my opinion remains--if it proves true, this is incredibly bad...