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May 26, 2024

Are Structured Settlement Receivables Considered Annuities under Nevada Law?

by Structured Settlement Watchdog

How are Annuities defined under Nevada Law? Nevada structured settlement reeivables

"An annuity is a contract in which an insurance company makes a series of income payments at regular intervals in return for a premium or premiums you have paid. Annuities are most often bought for future retirement income, and can pay an income that can be guaranteed to last as long as you live". Source: Nevada Division of Insurance (nv.gov)

"SMA" is not listed as a type of annuity under Nevada Law

It is noteworthy that the definition of an annuity provided by the Nevada Department of Insurance does not include any reference to "Secondary Market Annuities" among the types of annuities listed.

Las Vegas Wealth Management Expert Flops on "SMAs"

A. Here is what John Stevenson said in an Article published on Annuity.com along with his bio on May 24, 2024 as well as Retirement Village (targeted at Retirement market):

"Investing in SMAs involves purchasing an existing annuity contract from the current owner. This process is often facilitated by intermediaries and may require court approval in some cases"

That was an outrageous misrepresentation by Stevenson. 

  1. The term SMA was slapped on to structured settlement receivables by marketers to financial advisors more than a decade ago so it would be an easier sell to retirees. Seniors will likely be more familiar with the term annuities than receivables. 
  2. Buying structured settlement receivables are not equivalent to buying annuity contracts. See National Association of Insurance Commissioners Statutory Issue Paper No. 160 (finalized April 6, 2019)
  3. Structured settlement receivables are not insurance products. If you buy structured settlement receivables and the underlying annuity issuer goes insolvent there may be no safety net, reagrdless of when the receivable was purchased by you or who you bought it from. See Life & Health Guaranty Association Model Act (#520).
  4. Some structured settlement receivables are marketed to retirees and other investors as SMAs after they have been to the "chop shop". Think figuratively speaking, a company buys a used automobile that goes to a chop shop and is stripped for its parts which it then sells to investors.  If you're buying a chopped Toyota Corolla axle, you're not buying a Toyota Corolla. You're not buying a new or used automobile.
  5. So, first you have a structured settlement factoring transaction in which future periodic payments are assigned to a transferree. Under Nevada law "Transfer" means any sale, assignment, pledge, hypothecation or other alienation or encumbrance by a payee for consideration of the right to receive payments pursuant to a structured settlement; and  (j) "Transferee" means a party acquiring or proposing to acquire the right to payments pursuant to a structured settlement through a transfer. See Nevada Revised Statutes Title 3. Remedies; Special Actions and Proceedings - TITLE-3-REMEDIES-SPECIAL-ACTIONS-AND-PROCEEDINGS § 42.030 | FindLaw; and then the Transferee may sell the structured settlement receivable to an investor in whole or in part (chopped up auto analogy)

B. More nonsense from Stevenson

"Secondary annuities offer a unique opportunity for investors to receive a lump sum payment in exchange for future annuity payments".  Isn't it the other way around?

"In an SMA transaction, the current owner of an income annuity opts to trade their future income payments for a lump sum"  Stevenson is describing a structured settlement factoring transaction, which at IRC 5891 A  states "In general, 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.  Source: Legal Information Institute. Cornell Law School.

 

 

Posted at 03:44 PM in Carson Structured Settlements, Las Vegas Structured Settlement Receivables, NV Structured Settelment Receivables, Reno Structured Settlements, Structured Settlement Factoring News, Structured Settlement Investments, Structured Settlement Payment Rights, Structured Settlement Receivables, Structured Settlement Transfers, Structured Settlement Watchdog® |

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Guide to Structured Settlements 2024

  • 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 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].
  • Top Structured Settlement Annuity Companies 2024
    Which life insurance companies issue structured settlement annuities in 2024? 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. Last updated June 14, 2024
  • 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 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 .
  • Structured Attorney Fees for Tax Deferral for Attorney 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 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.
  • 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), oran annuity issuer has changed its name and you're trying to track them down. Here you go! The list is regularly updated. Last updated May 20, 2024.
  • 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
  • Structured Settlements and Longevity Risk| What Are the Odds?
    Do your financial resources give you enough road, or will the road run out before you do? A structured settlement annuity helps mitigate the risk of outliving your savings, no matter how long you live. A structured settlement can include one or more customized payment streams and types.

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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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
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Why Take a Structured Settlement?

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