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June 13, 2016

The Coming Fallout From Structured Settlement Secondary Market's Sins

by Structured Settlement Watchdog®

The structured settlement secondary market currently poses significant financial and reputation risk for participants in the unregulated market segment where there is no licensing and no regulator of its sales practices.

Despite the current lack of regulation, The Consumer Financial Protecton Board (CFPB) continues to plug away at JG Wentworth "to determine if their business of purchasing structured settlement and annuitant payments, or any ancillary aspects of that business, violate federal consumer financial law"  [Download 201602_cfpb_decision-and-order-on-petition-by-jg-wentworth-llc-to-modify-or-set-aside-civil-investigative-demand]. JG Wentworth, a publicly traded company, which has been fighting for its life in the investment markets, with a stock price in Bingo number range,  continues to fight CFPB on jurisdiction. The outcome of JG Wentworth's fight could have a negative impact other settlement purchasers.

 

Crystal ball
The Structured Settlement Secondary Market Is Not Pretty

 

 

Underwriters of insurance for settlement purchasers (and anyone tied to them) need to take a closer look at what has been going on to properly assess their exposures. 

Predictions

  1. Hedge funds and banks tied and investors owning, backing or funding structured settlement factoring companies who engaged in illegal activity may themselves  be investigated and targeted in litigation 
  2. Structured Settlement Buyers (Cash Now companies) may be prosecuted for providing unlicensed financial advice to sellers and to investors in structured settlement payments rights in forum shopped cases that did not comply with the structured settlement transfer act. 
  3. Retirees who  bought shady deals may be huge casualties in the fallout from vacated structured settlement transfer orders. There will be an ethical dilemma on the solution pitting the vulnerable, cognitively impaired and/or disabled, the original beneficiary of the original structured settlement payments, against the vulnerable retirees who were bamboozled by financial advisors  (or settlement purchasers improperly acting as financial advisers) into buying them.
  4. The lack of adequate insurance may be a huge problem for consumers and investors seeking redress.
  5. A money trail will lead to certain insurance companies and other American and foreign financial institutions who financed or bought structured settlement payments rights in which disabled, vulnerable and/or cognitively impaired American consumers who got shafted in high discount rate deals that were not in American consumers best interest.
  6. Lawyers who may be fined and/or disbarred for knowingly and repeatedly submitting structured settlement transfer petitions that did not comply with structured settlement protection statutes. 
  7. Judges who repeatedly and negligently did not perform their duties in protecting disabled, vulnerable and/or cognitively impaired Americans by approving structured settlement factoring transactions not in the best interest of the disabled, vulnerable and/or cognitively impaired Americans, will take a big hit.
  8. More cases of forgery of judges' on structured settlement transfer documents will be uncovered.  Two forgery cases involving a lawyer or employee of a law firm, each involving more than 100 forgeries have arisen in roughly the same "longitude', within the similar time frame.
  9. It will be revealed that multiple cash for structured settlement transactions were approved by a Florida judge in a short time frame involving forum shopping and an imposter annuitant!
  10. An investment Ponzi scheme involving participants in the structured settlement secondary market will come to the fore.

 

Posted at 09:16 AM in Cash Now Pushers | The "Cash Now Fix", Factoring Company Bad Business Practices, JG Wentworth CFPB, Judges on Structured Settlement Factoring, Judges Responsibility and Structured Settlements, National Association of Settlement Purchasers (NASP), Palm Beach Structured Settlements, Secondary Market For Structured Settlement Payment Rights, Secondary Market Structured Settlements, Structured Settlement Factoring News, Structured Settlement Watchdog® |

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Guide to Structured Settlements 2023

  • What is a Structured Settlement? What You Need to Know
    Structured settlements and what you need to know about them including a helpful introductory video featuring 2023 A.M. Best Client Recommended Structured Settlement Expert and Registered Settlement Planner John Darer® of 4structures.com® LLC
  • How Do Structured Settlements Work? How Structured Settlements Work
    How structured settlements work, including 4structures.com LLC's super helpful structured settlement flow chart/diagram showing how structured settlements fit in on the spectrum of settlement planning solutions.
  • Rated Ages and Structured Settlement Cost
    Rated Ages for Structured Settlement Annuities present advantages to all parties. Shift the mortality risk to a life insurance company whose business it it is to assess mortality risk to price its life insurance and annuities. Rated ages boost your structured settlement annuity benefit per premium dollar, or your yield on lifetime payments. Rated ages help to reduce the cost of funding a Medicare Set Aside arrangement where a Structured MSA, is being used { WCMSA LMSA or NFMSA].
  • Structured Settlement Annuity Companies 2023
    Which life insurance companies issue structured settlement annuities going into 2023? A list of current structured annuity issuers, the location of their home offices and their financial ratings from A.M. Best, Moodys, Fitch, Standard & Poors and/or other Tier1 NAIC ratings, with links to their websites and other useful information.
  • 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.
  • Compare Structured Settlement IRR to Other Settlement Alternatives
    Use the Taxable Equivalent Yield chart to help compare the Internal Rate of Return (IRR) of a structured settlement to other alternative or complementary investments. Need help with the chart? Call 4structures.com® LLC at 888-325-8640
  • Structured Settlement Payments | Types of Structured Settlements
    Ways You Can Structure Your Settlement Payments. 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 .
  • Structured Attorney Fees for Tax Deferral for Contingency Fees
    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 the an index linked structured settlement where payments are adjusted based on upside changes in the S&P 500 with no downside and a cap of 5%. 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.
  • Structured Settlement Annuity Company Customer Service Phone Numbers
    Receiving structured settlement payments from your own structured settlement or inherited structured settlement? You'll like this huge time saver. Click the title for a link to a comprehensive list of customer service telephone numbers that includes both current AND former structured settlement annuity issuers and reinsurers. If you have simple bank or beneficiary changes, or if the insurance company that issued the structured annuity has merged, sold or spun off its block of structured annuity business (e.g. Aviva, Allstate, Transamerica, AEGON, GE Capital, Liberty, CNA, Confederation Life) or changed its name and you're trying to track them down, here you go! The list is regularly updated. Last updated September 14, 2023
  • Structured Settlement Quote Lock-Ins | What You Need To Know
    What does a Structured Settlement Lock-In Mean? How do plaintiffs, defendants and insurers benefit from a structured settlement quote lock in when finalizing a settlement? How does the defendant/insurer/court benefit from using a structured settlement lock-in? Where to be careful when using structured settlement lock ins.
  • 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.
  • iStructure |Uncapped Fixed Index Structured Settlement Annuity
    iStructure is an innovative game changing fixed index structured settlement annuity for plaintiffs or attorneys. with an intermediate to long term horizon

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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    with a stable readership that seeks credible structured settlement information, John Darer Reviews, commentary and/or opinion about topical issues related to settlement planning, targeted to lawyers, injured persons and their family members, guardians, survivors, judges, magistrates, special masters, mediators, administrators, trust companies, insurance company executives and adjusters, financial advisers, settlement professionals, financial professionals, insurance regulators, government leaders, federal and state law enforcement, buyers and sellers of structured settlement payment rights, the news media and other interested parties. 4structures.com LLC established this structured settlement blog in 2005. John Darer ®, CLU ChFC MSSC CeFT® RSP CLTC, President of 4structures.com, located in Stamford, CT 06902. John Darer is an experienced New York City area structured settlement expert, structured settlement broker, Certified Financial Transitionist, and Registered Settlement Planner. He holds insurance licenses in 45 states, has 40 years financial services experience and more than 29 years in the structured settlements and settlement planning space. In his capacity as a investigative journalist and commentator, and professionally, John Darer passionately believes that shining the light on a business practice is both healthy and newsworthy. It is in the best interest of injury victims, their families and their legal advisers, that the settlement planning discussion involve those that are properly trained in the topic, properly informed on the topic and, with respect to structured settlements, properly licensed and/or appointed. It has significant instructional and deterrent value to other practitioners and firms as well as those who may be caught in the cross hairs. WHAT YOU GET here is the straight stuff with a touch of irreverence and humor. We hope you enjoy and find the content to be helpful. Subscribe to the structured settlement blog feed, or a specific category feed through your blog reader, or through the Subscribe button at the top left of this page. Followers of JDDarer™ on Twitter may also receive select content. If you would like to speak with John he can be reached at (888)325-8640 Thank you for reading! Last updated December 4, 2023

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Structured Settlement Best Practices Corner

  • New York Insurance Advertising law requires the full name of the Insurer to be listed along with the city and state of the principal office. Stating that you represent these fine companies using Insurance company logos without the preceding information are also illegal
  • When it comes to settlement documents it is the ultimate responsibility of the lawyers or claims adjusters who receive input concerning the structured settlement aspects of the documents to actually read the entire document, exercise independent thought and advise their clients properly
  • Be aware that financial advisors use of testimonials is prohibited or restricted
  • Most states require that Testimonials represent the CURRENT opinion of the person who made the testimonial. Be prepared to back it up.
  • Number of States That Prohibit Payment of QSF expenses by licensed agents and brokers
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