The National Structured Settlements Trade Association, the trade association of the structured
settlement industry primary market, has announced that it strongly opposes A3786 and S4306, a bill whose motivation to enhance the New York Structured Settlement Protection Act appears to target three key areas:
- Making sure that plaintiffs and plaintiff attorneys are aware that they can have their own representation in the transaction and the manner in which they should be informed. If enacted S4306 would require that a claimant receive written notice of the claimant's right to secure a claimant's structured settlement broker to represent the claimant during the acquisition of the defendant's settlement funding mechanism, including an annuity.
- A tacit focus on a certain claims office of a particular insurer which has stubbornly protected its structured settlement brokers by purportedly forbidding them, from splitting commissions with any broker representing the plaintiff, This has been a thorny issue for plaintiff lawyers who want expertise for themselves and their clients and feel that the cost of such services should come out of the annuity commissions earned from the placement of structured annuities. It should be pointed out that the overwhelming majority of structured settlement transactions occurring in New York and elsewhere today, are civil matters concluded with experts representing both sides.
- Busting approved lists of annuity issuers that casualty insurers create for use when their claims are resolved by way of structured settlements.Some lists are broad, others are very narrow. Some ar logical, like restricting to companies with minimum rating criteria, business philosophy, underwriting standards and long term commitment to the market. Still others appear to be all about driving business to an affiliate. Others make little sense at all.
The executive summary that forms part of the National Structured Settlement Trade Association position paper appears immediately below:
- "Structured settlements have been used to provide long-term financial security to injury
victims and their families throughout New York State and across the country for
almost 3 decades.
- The proposed legislation would upset the settlement negotiation process that has been so
successful in New York. NSSTA contends that the result will be fewer structured settlements for injury victims.
- Under the proposed legislation, if the parties cannot agree on the funding source for the
periodic payments under the structured settlement “prior to final approval of the settlement
agreement”, the legislation directs that the plaintiff can choose the funding source. If this
proposed provision is interpreted to mean that after the settlement agreement is finalized, the
plaintiff would have the unilateral ability to impose the funding source on the defendant
without regard to cost, thereby effectively dictating the cost of the settlement to the defendant,
the defendant will have little interest in participating in the structured settlement in the first
- If instead the provision means that the defense simply turns control of the lump sum of cash
to fund the structured settlement over the plaintiff who then picks the funding source, Federal
tax risks would be created for the plaintiff".
For a copy of the entire NSSTA memorandum opposing the expansion of the New York Structured Settlement Protection Act (New York General Obligations Law 5-1702 ) please click here Download Nssta-memo-new-york- structured-settlement-plaintiffs-rights-bill-3786-4306_0
On April 6, 2011 the structured settlement watchdog, John Darer, emailed NSSTA leadership and copied several heads of agencies after receiving a copy of communication dated June 8, 2010, from NSSTA counsel to representatives of 3 broker firms (SFA, Ringler and EPS) and one life insurance company executive about the bill which said that the Life Insurers Council of New York was suspicious of the bill and asked for NSSTA's advice. While we've subsequently learned that NSSTA did provide advice to LICONY and LICONY has acted on that advice and opposed the bill. Following is a copy of the email to which NSSTA did not issue a response other than the above linked memorandum distributed to its membership which was attached to an email newsletter.
"Since 1985, the National Structured Settlements Trade Association has been the leading voice of the structured settlement industry". (emphasis added)
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