by Structured Settlement Watchdog
I am going to go out on a limb with this one because I, for one, want to know how many structured annuity issuers really care about protecting plaintiffs, their insureds, from the vultures of the structured settlement factoring industry? Looking beyond the brochures, the web sites and the marketing hype, what is being done? What can be done to protect these people?
Halpern Group Efforts to Enforce Anti-Assignment Provisions
The Halpern Group has strong anti-assignment language in the qualified assignment agreements for its United States Treasury Bond Structured Settlement Trust. The company has recently been endorsed by the American Association for Justice whereas, at the time of posting, no structured annuity issuer or intermediary has. My sources tell me that cash now pusher companies such as J.G. Wentworth have tried but now hardly bother going after Halpern clients because they're going to be shut down by the Halpern anti-assignment language. Halpern Group anti assignment language is available to resourceful members of the structured settlement industry, including structured annuity issuers.
United States Department of Justice Successfully Fights and Wins Against Factoring
The same could be said about structured settlement factoring company attempts to factor structured settlement annuities owned by the United States government after a series of stunning defeats in multiple circuit courts of appeals. If there is a concern about vulnerability to factoring, a structured settlement taken in settlement with the United States government, or one of its agencies is a great line of defense.
Why Enforce Anti-Assignment Provisions?
Richard Halpern tells me that a personal decision was made NOT TO ALLOW Halpern Group products to be factored to offer more safety to injured plaintiffs. As a by product it gave them a competitive advantage and I understand from Halpern that it has stimulated business from attorneys who are concerned about their client's factoring because the attorneys are interested, like Halpern, in protecting plaintiffs. A United States Treasury Bond Trust is paired with a pour over trust to provide for liquidity needs.
What Could Be The Reason For Insurance Industry Inaction?
Why couldn't an annuity issuer make its own decision, without the hamstrung imprimatur of NSSTA, SSP or the industry factoring jackal Patrick Hindert, to add and enforce anti-assignment provisions except in extreme circumstances? The solution is an easy one, could be done today, but no structured annuity issuer seems to have the balls to take it.
- Could it be a tax issue? If so, I challenge any structured annuity issuing life insurance company, NSSTA member, SSP member, or their counsel, to state the tax reasons why. Don't you think Halpern sought tax advice before having the anti-assignment provisions added to its documents?
- Could it be the fear of anti-trust? Absent Federal regulation of insurance doesn't McCarran-Ferguson prevent that? The Act provides that federal anti-trust laws will not apply to the "business of insurance" as long as the state regulates in that area, but federal anti-trust laws will apply in cases of boycott, coercion, and intimidation.
- Could it be the never ending supply of factoring company securitizations (if one is to believe the press releases issued by these companies) that provide attractive returns for life insurer portfolios? I challenge every structured annuity issuer to come clean on whether their company does or does not purchase structured settlement securitizations in any of its divisions. If a company does not purchase the securitizations why not use it as competitive advantage?
- Could it be pressure put on them by some of their own agents because those agents are receiving payments from the factoring industry?
- Could it be pressure put on them by some of their own agents because those agents have convinced those companies that IRC 5891 confers rights ? An example to those that tell you otherwise:
"IRC 5891 is NOT a money mandating statute that creates a substantive right enforceable against the United States for money damages" 424 U.S. at 398.
Can anyone think of any other plausible explanation why The Halpern Group appears to be the only person or entity providing products to tort victims that has the guts to do something in this regard, besides the United States government?
The United States Department of Justice consistently and successfully fights attempts to factor structured annuities which are owned by the United States.
By doing nothing, have the structured annuity issuers miscalculated or been ill advised into thinking that factoring gives the structured settlement product a competitive advantage?
Is there a structured settlement annuity issuer that independently has the guts to put anti assignment provisions into its qualified assignments, to see just how competitive their product might become?
With factoring industry discount rates in the mid to high teens is there any structured settlement annuity issuer that has the balls to do commutations today at more competitive discount rate for their own annuitants in hardship situations, like Allstate?
This issue needs to be out on the table despite the fact that many in the structured settlement industry appear not to want it to be. Scared by a notional shrinkage of market capacity some wish to sweep this issue under the rug instead of taking the issue head on.