by Structured Settlement Watchdog®
Is it kosher for an appointed agent of a structured annuity issuer to compete against that company and its other appointed agents with structured settlement payment rights acquired directly in the structured settlement secondary market ("recycled structured settlements")?
Generally, in order to sell insurance products to the public you must hold a valid insurance license for the line of insurance* being sold and you must be appointed by the life insurance company issuing the annuity. Appointment is a privilege not a right. Annuity issuers may set certain standards in order to (i) become appointed (ii) remain appointed.
"Recycled structured settlements" are structured settlement payment rights acquired from someone who is receiving structured settlement payments as compensation from the settlement of a claim or lawsuit. Recycled structured settlements are not annuities and salespeople who are purveyors of such payment rights may not hold any professional licenses that would be legally required of someone who solicits the public.
Some appointed agents of life insurance companies are selling recycled structured settlements to their customers, directly, or through trusts or limited liability companies. Some of these agents are then competing with the business of structured annuity issuers, even using the annuity issuer's valuable brand.
Apparently one company has had enough and terminated the appointment of an agent making a business in recycled structured settlements. Now the agent has sued the life insurance company. As soon as I have a copy of the complaint I will share with you more of the details.
* annuity sales generally come under the life insurance line of business authority.