by John Darer CLU ChFC MSSC CeFT RSP CLTC
The majority of US states have no insolvency protection for investors in other people's structured settlements, leaving some investors perhaps blissfully unaware that they are running naked. This means almost 80% of US States!
The Life & Health Guaranty Associations Model Act (#520) makes it crystal clear that investors who have acquired structured settlement payment rights in a structured settlement factoring transaction are expressly excluded as a protected class. Under the 2017 revisions, the exclusion applies regardless of whether the investor acquired structured settlement payment rights before or after the effective date that their state adopts the 2017 revision.
Some of these investors may have been misled into believing the investments were annuities,when sold the investments by trusted advisors, including some settlement planners. They weren't.
To be clear, this is not referring to injured parties who are receiving structured settlement payments that were established as consideration for settlement or their personal injury, wrongful death or workers compensation cases (or their beneficiaries) . This applies to investors, regardless of when they bought the structured settlement payment rights.
Hopefully there is no insurer insolvency.
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