by John Darer CLU ChFC MSSC CeFT RSP CLTC
Transfers or assignments of other people's structured settlement payment rights, have been deceptfully marketed to investors as secondary market annuities by certain members of the structured settlement secondary market and
market, in addition to certain settlement planners and structured settlement brokers who incorporated them in settlement plans and (as the evidence showed last year), some have even used them in purported qualified assignment documents with a related factoring company.
Then came the 2017 Revisions to the Life & Health Guaranty Associations Model Act(#520), which is has been approved by the majority, but not all US states, which expressly excludes structured settlement annuity benefits where a payee or beneficiary has transferred rights in a structured settlement factoring transaction regardless of whether the transaction occurred before or after the adoption of the 2017 Revisions became effective.
New Jersey Joined the Party in August 2022.
Progress report on the clarity for investors in structured settlement payment rights and it isn't good news. I reported that it was coming and it is now effective in New Jersey.
New Jersey P.L. 2022, CHAPTER 98, effective August 12, 2022, AN ACT concerning the “New Jersey Life and Health Insurance Guaranty Association Act” and amending P.L.1991, c.208 has SERIOUS implications for NJ investors in structured settlement payment rights.
c. Except as otherwise provided in subsection d. of this section, P.L.1991, c.208 (C.17B:32A1 et seq.) shall not provide coverage
(11) structured settlement annuity benefits to which a payee (or beneficiary) has transferred rights in a structured settlement factoring transaction as defined pursuant to section 5891 of the federal Internal Revenue Code, 26 U.S.C. s.5891(c)(3)(A), regardless of whether the transaction occurred before or after that section became effective.
The in excess of two decade long strategic failure of state legislatures to (1) implement licensing standards and (2) to regulate the secondary market sales practices through licensing standards and regulatory enforcement of a reasonably forseeable problem
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