by John Darer® CLU ChFC MSSC RSP CLTC
After years and months of empathy for ELNY victims which has not abated, in which I have given them a voice, I think it is important to say this regardless of the torrent of responses to follow. I write this as someone who shunned placing any insurance products with ELNY (structured settlement annuities or life insurance).
I can only imagine that it is not easy to put things in perspective when you are facing shortfalls that some ELNY annuitants are facing and the impact of those shortfalls on your future. But from a 10,000 foot perspective, one of the things that gets lost in the ELNY Liquidation discussions is that for 25-30 years ALL ELNY annuitants received 100% of what was a grossly unreasonablly priced annuity amount to begin with.
But for the incompetence of New York insurance regulators who permitted ELNY under-priced annuities to be sold to the public, was the ELNY annuity even in the mix of settlement of personal injury cases.
Those who benefited for over a quarter of a century
- Annuitants for 25-30 years
- Insurers and Defendants who relied on and negotiated on the basis of payments generated by the gross under pricing who bought and held the annuities. Had the product been priced more in line with the prevailing structured annuity market the Defendants and Insurers in those cases might have incurred a higher exit price from the litigation.
- Insurers and Defendants who did not buy and hold
As annuitants, ELNY victims have every right to expect that what was contracted for is paid.
Yet had the ELNY annuities been properly priced to begin with, we might not be having this discussion.
The result may have been:
- A solvent ELNY
- Lower payouts to begin with
- More prudent planning would have been the order of the day. There would have been less of an urge to put all the money in one basket.
Other life insurance companies that sold structured settlement annuities during the time period that ELNY was active, are over a century old , still writing new business and have been paying their annuitants. Some of those same companies made it through two world wars, The Great Depression and other panics. Those same insurance companies made it through the 2008-2009 financial crisis when big brokerages and investment banks like Lehman Brothers, Bear Stearns and hundreds of banks failed.
All other things being equal, a business that prices responsibly and maintains reasonable contingency reserves, will be in business a long time. A business that doesn't will not. There are plenty of case studies in all sectors of the business world.
If ELNY victims wish to examine the specific transactions that gave rise to the structured settlements they have been receiving, including an examination of any sales literature used, copies of illustrations etc., nature of negotiations, copies of correspondence, whether pricing and financial comparisons were done, whether pricing was ever questioned by victim's lawyers, executors, adminstrators or guardians etc., then let's have at it. It will make a compelling story. But let's make an accurate portrayal together.
An ELNY annuitant and client of one of my industry colleagues on the West Coast understands this and realizes , as was related to me last Fall, that he or she got significantly more for the last 25 years than he or she would have received otherwise.
As much as you hurt about what has happened to you (that again I too am disgusted about), I am extremely proud to be able to represent what is good about structured settlements and the structured settlement and settlement planning industry. I am proud to have the skill, mental strength and intestinal fortitude, along with others, to push for increasing standards of education and ethics, regardless of the consequences. There is a lot of good being done EVERY DAY all over the country by structured settlement consultants and settlement planners.
I hope you will try to put things in perspective so that we can educate current and future injury victims in a constructive way.