by Structured Settlement Watchdog
Coral Springs Company Makes False Wholly Misleading Statement Re "Purchase of Structured Settlement Annuities"
According to MJ Structured Settlement Annuities' (MJSSA) definition, "a Structured Settlement Annuity (SSA) is an annuity from an insurance company paid over a period of years as a result of a legal settlement for financial restitution". For example, MJSSA says, "the victim of a motor vehicle accident may be awarded an SSA where the guilty party will fund an annuity to pay out to the victim over time"
MJSSA Fails to Comprehend Basic Difference Between Civil and Criminal Lawsuits
Setting aside MJSSA's showing a lack of understanding of the difference between a civil suit (where at the conclusion of trial a civil Defendant may be found liable (as opposed to a criminal trial where a Deendant could be found guilty)**, MJSSA makes a false and wholly misleading marketing claim by holding out the purchase of factored structured settlement receivables as a purchase of a structured settlement annuity (or structured settlement annuities).
"MJSSA offers investors the opportunity to purchase Structured Settlement Annuities that deliver a guaranteed, fixed income stream over a defined period of time. These are individual, one-time-only secondary market annuities available for a limited time". See the screenshot immediately below.
It is well settled that factored structured settlement payment rights are not annuities
Factoring is a sale of receivables. For example, see A. DRB Capital -- Structured Settlement Receivables Successfully Acquired | News & Insights | Arnall Golden Gregory LLP (agg.com) "DRB Capital, LLC, is a Florida-based specialty finance company that buys and sells structured settlement receivables, such as annuity payments and court-ordered payments" and "As a result of the deal, DRB, which has over $1 billion in committed capital and employs more than 150 people, was able to add a substantial inventory of structured settlement receivables to its balance sheet". B. Genex Capital Corporation Issues "Recall Notices" on Certain Pre-2015 Genex Capital Receivables - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and John Darer Reviews (typepad.com);
- The National Association of Insurance Commissioners (NAIC), in its Statutory Issue Paper No. 160, which was finalized April 6, 2019, made it clear that acquired structured settlement payment rights are not annuities or insurance products. See NAIC Statutory Issue Paper No. 160 p6 Section 6, footnote which states clearly " This guidance is specific to acquired structured settlement income streams (legal right to receive future payments from a structured settlement) and does not capture accounting and reporting guidance for the acquisition of any insurance product (e.g., life settlement, annuities, etc." ]
In the event of insolvency of the underlying annuity issuer, investors in acquired structured settlement payment rights are screwed in 80% of the US states, have adopted the 2017 Revisions to the Life & Health Guaranty Associations Model Act (#520), which expressly excludes acquired structured settlement payment rights from insolvency schemes. The application of the exclusion expressly applies to acquired structured settlement payment rights that were acquired prior to the effective date that the investor's state adopts the 2017 Revisions to the Model Act.
Section 5891 of the United States Internal Revenue Code of 1986, as amended states that "The term “structured settlement factoring transaction” means a transfer of structured settlement payment rights (including portions of structured settlement payments) made for consideration by means of sale, assignment, pledge, or other form of encumbrance or alienation for consideration".
- Structured Settlement factored receivables do not meet the definition of annuity under the laws of the State of New York. For example: "An annuity is a contract between a purchaser and an insurance company in which the purchaser agrees to make a lump sum payment or series of payments in return for regular disbursements, beginning either immediately (within 12 months) or at some future date" Source: New York Department of Financial Services.
- Structured Settlement factored receivables do not meet the definition of annuity under the laws of the State of Georgia. For example "An annuity is a contract you enter into with an insurance company to provide a guaranteed income in exchange for a payment or series of payments" Source: Annuity | Georgia Office of Insurance and Safety Fire Commissioner
- Ask MJSSA if any of their current structured settlement receivables offerings (falsely held out as annuities) are covered by your state's life & health guaranty association? Here is where the MJ Structured Settlement Annuities has been a bit naughty and says that they are (not even a "maybe"). See number 3 from the screenshot of September 14, 2023 10:11 below.
Factored Structured Settlement Receivables Are An Unregulated Non-Insurance Product Sold, and Continuing to be Sold by Certain Salespeople and Companies under the Wholly Misleading "Secondary Market Annuities"
Factored structured settlement receivables have been marketed to investors, including seniors in Florida, injury victims, trial lawyers and fiduciaries as "structured settlement annuities", "secondary market annuities", even by people they trust that hold insurance licenses. There is little regulation of the the sales practices of structured settlement factoring companies and these receivables being deceptfully marketed as "annuities" or "secondary market annuities" to investors by the secondary or tertiary markets. With what is known, the lack of regulation is just reckless at this point and has been for more than a decade.
Here MJ Structured Settlement Annuities is holding out a list of stuctured settlement factoring receivables for sale as if they are annuities and advertising them as offerings to investors. See Available Offerings - MJ Structured Settlement Annuities (mjsettlements.com)
And the operative question is why? Where are Regulators Protecting Consumers and Investors?
Helpful References for Consumers
- Under Florida law Chapter 626 Section 99296 - 2023 Florida Statutes - The Florida Senate (flsenate.gov) titled Transfers of structured settlement payment rights. As opposed to sale or transfer of a structured settlement annuity contract.
- annuities-guide.pdf (myfloridacfo.com)
- Structured Settlements | What Is a Structured Settlement? (4structures.com)
- What Are Structured Settlement Annuities? Structured Settlements FAQ (4structures.com)
Broward County Confusion? Who led which horse to water?
"Let’s start with the basics. A structured settlement is an agreement reached during a lawsuit, where the guilty party agrees to pay the victim a specified amount of money in periodic payments". -123Lump Sum website 123 Lump Sum in Quandry Over Whether Civil Defendants Are Guilty (or Liable)? - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and John Darer Reviews (typepad.com) August 24, 2022
MJ Structured Settlement Annuities appears to also use the name EZStructuredsettlementannuties, based on what was found on its website at time of original posting.
Last updated October 20, 2023