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August 03, 2014

Novation Capital Dreadfully Misinforms on Structured Settlement Issuers

by Structured Settlement Watchdog®

Novation said what
Duh! Did Novation Really Say That?

Novation Capital contributes to the Social Media Road Kill and Structured Settlement Humor columns with failed attempts to define structured settlement broker and annuity issuer in a July 28, 2014 post.

This is just pathetic...

Novation Capital  (Beth) "A structured settlement broker is an individual that negotiates the financial payout of a settlement after a lawsuit verdict on behalf of the insurance company that issues the annuity. This payout can be assigned to one person or to a group, such as a family.  The broker will also set up the time frame for each payout based on the individuals’ needs"

Comments: 

  • As the name suggests, structured settlements are settlements.  More cases settle than go to trial, because it's often cheaper and less emotionally draining to settle out of court than to go through a court battle. For both parties, one does not know the outcome in advance of a trial (either by judge or a jury). Settlement offers the advantage of predictability in that the parties can author the terms of their own compromise.
  • Without a trial there can be no verdict. 
  • Assignment generally refers to a qualified assignment or substitution of periodic payment obligors in a case involving damages for personal physical injury or physical sickness.  A structured settlement is comprised of periodic payments that are paid to individuals and occasionally to a law firm, or to an entity if the structure was being used to help resolve commercial litigation. All of the latter would be referred to as Payees, not assignees. If you assign something to somebody, the assigned-to party is referred to as an assignee.

Novation Capital  (Beth) "Who are some of the top structured settlement issuers?

"MetLife, TIAA-CREF, AXA, Allianz Life of North America, Lincoln Financial Group are some of the top annuity insurance companies in the US. These companies own the annuities and pay them out to individuals"

Comments

  • Other than MetLife, a brand name used by Metropolitan Life Insurance Company, none of the companies Novation Capital mentioned is a structured settlement issuer.  The link leads to a March 2014 publication of Life Health Pro that deals with all annuities not the niche market that is structured settlement annuities. Oddly AIG was left out given that through its subsidiaries,  it is one of the largest writers of annuities. Here is a link to a list of companies that issue structured settlement annuities through licensed insurance agents and brokers they authorize or appoint.
  • Neither the companies that actually issue structured settlement annuities, nor the companies that Novation Capital(Beth) erroneously claims to issue structured settlements ,owns the annuities. With structured settlements, the annuity applicant and owner is usually the qualified assignment company or non qualified assignment company.  In rare instances the defendant or insurer owns the annuity. The ownership of the annuity does not change in this regard even if a company like Novation Capital enters into a structured settlement factoring transaction and acquires structured settlement payment rights from the payee.
  • With a regular annuity the applicant and owner is usually an individual. But the companies that Novation Capital (Beth) alludes to  are not the owners.Th eindividual completes an application through a licensed agent or broker

And now, punctuated by the Novation Capital output we've just read,  comes the humor, Novation Capital style:

"Getting the facts about structured settlement brokers, issuers and factoring companies can sometimes be overwhelming, especially since there’s so much misinformation out there"

Novation Capital does a disservice to structured settlement consumers by taking up shelf space in publishing inaccurate information.

Image: Dreamstime.com

Posted at 01:28 PM in Annuity News, Boca Raton Florida Structured Settlements, Canard of the Week, Cleaning Up "The Structured Settlement Neighborhood", Factoring Company Bad Business Practices, Florida Structured Settlements, Misinformation About Structured Settlements, Novation Settlement Solutions | Novation Funding Commentary , Palm Beach Structured Settlements, Social Media "Road Kill", Structured Settlement Factoring, Structured Settlement Factoring News, Structured Settlement Humor, Structured Settlement Watchdog® |

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  • Treasury Funded Structured Settlements
    Treasury Funded Structured Settlements are a settlement option for the most conservative using the OTHER permissible qualified funding asset under IRC 130(d), United States Treasury Bonds in addition to, or instead of, structured settlement annuities. Treasury Funded Structured Settlements can also be used to fund installment sales, also known as structured sales and other non qualified structured settlements.
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  • Structured Settlement Payments | Types of Structured Settlements 2024
    Ways You Can Structure Your Settlement Payments in 2024. With a structured settlement you can have more than one type of payment in a single contract. Different types of structured settlement payments can be customized and combined to meet your needs on a stand-alone basis, or in conjunction with other financial products. Diversify your structured settlement, if you wish, by funding with more than one annuity issuer, with treasury funded structured settlements, index linked structured settlement payments and market based structured .
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    Structured attorney fees is a financial strategy that offers a unique way to defer taxes for lawyers and law firms. Lawyers CAN structure their legal fees even if the plaintiff doesn't structure their settlement. There are multiple ways to structure your attorney fees, such as capped or uncapped index linked structured settlement annuities where payments are adjusted based on upside changes in the S&P 500 or another index, Trial Lawyers may also use a special deferred pay/deferred compensation arrangement, if market based returns returns are desired with no cap. Plan NOW for year end! Put structured attorney fee expert John Darer® on your settlement planning team in 2024.
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  • What Are Structured Settlement Annuities?
    Structured settlement annuities are annuities that can provide one or more customized annuity payment streams in a single contract. Read about structured settlement annuities here.
  • History of Structured Settlements
    Tracing the roots of structured settlements history from 1918, when Congress exempted damages for personal injury or sickness from income tax, to the establishment of structured settlements as a core personal injury settlement planning tool to the present day.
  • What Are Market Based Structured Settlements?
    Market based structured settlements are an alternative or supplementary structured settlement solution for the plaintiff, attorney or law firm that: 1. Can afford to take some market risk 2. Have discretionary settlement dollars. Claimants and attorneys alike may find that market-based structured settlements provide the opportunity to receive tax-free income, or tax-deferred income, while enjoying growth potential.
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Qualified Settlement Funds

  • What is a Qualified Settlement Fund?
    Qualified Settlement Funds | What You Need to Know
  • Firmwide Qualified Settlement Funds Debunked
    Firmwide qualified settlement funds have been heavily promoted to trial lawyers, but have been debunked in a detailed analysis in a July 2022 legal opinion a tax partner at the law firm of Faegre Drinker Biddle & Reath, LLP. Trial lawyers and firms who have established Firmwide QSFs or coinsidering establishing a Firmwide QSF should read the analysis as part of their evaluation.

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