by John Darer CLU ChFC CSSC RSP
Despite clear intentions of the New York Structured Settlement Protection Act some defense interests foolishly continue to put their clients in jeopardy by attempting to bully plaintiff lawyers into making the use of the defense broker as sole broker, a condition of settlement.
The New York General Obligations Law 5-1702 says:
In negotiating a structured settlement of claims brought by or on behalf of a claimant who is domiciled in this state, the defendant or defendant's legal representative shall disclose in writing to the claimant or the claimant's legal representative all of the following information that is not otherwise specified in the structured settlement agreement: (a) the amounts and due dates of the periodic payments to be made under the structured settlement agreement. In the case of payments that will be subject to periodic percentage increases, the amounts of future payments may be disclosed by identifying the base payment amount, the amount and timing of scheduled increases, and the manner in which increases will be compounded; (b) the amount of the premium payable to the annuity issuer; (c) the nature and amount of any cost that may be deducted from any of the periodic payments; (d) where applicable, that any transfer of the periodic payments is prohibited by the terms of the structured settlement and may otherwise be prohibited or restricted under applicable law; and (e)
a statement that the claimant is advised to obtain independent professional advice relating to the legal, tax and financial implications of the settlement, including any adverse consequences and that the defendant or defendant's legal representative may not refer any advisor, attorney or firm for such purpose.
Those insurance companies that indirectly take a piece of the action through licensed agency sharing relationships need to have a better understanding of what is happening and what their exposure is.
Defense counsel cannot be ignorant of the law, since the law expressly places the obligation of disclosure on them and the Defendant, NOT the insurance company, or the structured settlement broker brought in by the insurance company.
Wiliam T. Robinson, III, American Bar Association President, recently said there are likely to be brokers on both sides.
To the select few of my industry brothers and sisters. No matter how grumpy you are at the end of a long day, it's the reality, not even a new reality. Learn to embrace it, anticipate it, live with it. Appreciate the value. But if you choose not to play by the rules expect to be called on it.
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