Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and John Darer Reviews

Structured Settlement Quotes | Guide to Structured Settlement Quotes

by John Darer® CLU ChFC MSSC CeFT RSP CLTC

How do you obtain a structured settlement quote? 

First, make sure that you are speaking to a true structured settlement broker, expert or consultant and not a factoring company or cash flow company representative masquerading under any of these terms.

Most state insurance departments in the United States have consumer protection regulations which require actuaries at insurance companies to certify that each liability has an asset to match it on an annual basis. Therefore, the insurance companies issuing structured settlement annuities must be careful in rate setting to assure that they have a balance of assets to meet their obligations. Should it take on too much premium and the corresponding liability, without assets to match, an insurance company could find itself in hot water with the regulators.

What are the types of structured settlement quotes?

On a very basic level there are several types of quotes: Book Rates, Daily Rates and either of the two with a Rated Age or special impaired risk pricing .

Book rates are the published rates of the structured settlement annuity issuer. The "book" refers to the fact that in the pre-computer era, rates literally came from a rate book or rate sheet. Today most companies make such rates are available for download online to its appointed agents/brokers so that your structured settlement broker, expert, consultant or settlement planner should have in his/her office or installed on his/her note book computer. Book rates change periodically. Generally book rates are good for a certain number of days

Daily rates, as you might assume, are generally good "for the day of quote only", a " blue plate special". Given that bond markets fluctuate daily there may be bonds out there on a particular day that will permit the annuity issuer to issue a more aggressive rate. In part because of the asset/liability matching requirement most annuity issuers require daily rate pricing on very large cases (definition of "very large" varies by company).  Note that some structured settlement annuity issuers will hold daily rate pricing for 24 hours.

Rated age pricing applies to book rates or daily rates. A rated age affects the cost of any life contingent structured settlement annuity benefit. Rated ages are opinions based on medical information concerning the annuitant that causes the underwriter to believe that the plaintiff or annuitant has a shorter than normal life expectancy. Based on this opinion the annuity issuer is wiling to issue the annuity at a lower cost/higher yield an absorb the mortality risk. A rated age can either reduce of the cost of providing a known life contingent benefit or it can boost the yield per claim dollar if buying a life contingent benefit and the contribution is known. Rated ages vary by annuity issuer and the effect of the rated age on the pricing of the annuity will vary by company and even by the type of benefit desired. If you are seeking a benefit that is for a certain period of years or is a guaranteed lump sum  payment then the rated age has no effect on the cost of the structured settlement.

Different structured settlement annuity issuers specialize in different types of cash flows. Some may be better short term. Some may be better long term. Some may specialize in lump sums. Others may be more competitive at older ages or with deferred start dates. It seems complex but a good structured settlement broker, expert, or consultant should be skilled at weaving the best plan/offer together for you or your client. Such plan/offer may involve one or more structured settlement annuity issuers.

Most structured settlement brokers today have the ability to send you structured settlement quotes via email for speed, ease of storage and re-transmission (to clients or other advisers) and reduce your paper clutter.

One thing to note is that a quote to "sell your structured settlement annuity payments rights" is NOT a "structured settlement quote". To clear up the confusion (created by factoring company Internet advertising) it is a "factoring quote".

Updated July 1, 2023

 

Gobler's "Should You Cash Out a Structured Settlement" is a Turkey

by Structured Settlement Watchdog

Gobler's "Gobledegook"

The New York Post published a Personal Finance piece July 19, 2023, authored by freelance writer Erin Gobler, that it disclaims to a source ironically named "Credible", for which The New York Post earns a fee if you click a link and close a loan through Credible.

"Gobbler" to "Gobler"

In a case of you lost it at hello, Gobler writes

"If you’re the plaintiff in a personal injury or similar claim and win your case, you could find yourself awarded a large amount of cash. But you may not necessarily get that money in one lump sum. Instead, monetary awards may be disbursed over a longer period in what’s known as a structured settlement" says Gobler.

Let's Talk Turkey

1. An Award is not a Settlement
2. A Settlement is not an award. That's why it's called a settlement. Pretty basic stuff.
3. A monetary award, would not be disbursed as a structured settlement.
4. A settlement is a negotiated compromise. This is key. You don't need to "win your case" to enter into a structured settlement with your adversary or their insurance company.
5. In New York, there are a pair of periodic payment of judgments statutes that provide for portions of a judgment in excess of certain thresholds to be paid by what is known as a structured judgment. The statutes are described at New York CPLR 5031-5039 for recovery of damages due to Medical, Dental and Podiatric malpractice (known as Article "50-A") and CPLR 5041-5049 to recover damages for personal injury, injury to property or wrongful death, not subject to Article 50-A  (known as Article "50-B")
6. As long as there are good faith appealable issues and the parties have a meeting of the minds, they can enter into a settlement in lieu of judgment. 

The Value of a Settlement Planner

Gobler  "A structured settlement can provide a source of tax-free income over a long period. But for someone who needs the money right away — perhaps due to the injury that landed them in court in the first place — cashing out the structured settlement could be an option. However, it’s important to consider the benefits and downsides beforehand".

All the Trimmings

1. Work with a credentialed and experienced settlement planner to explore your options before signing any release. What is Settlement Planning? Settlement Advisors and Transitional Financial Planning NY|NYC|CT|NJ (4structures.com)
2. A structured settlement can provide tax free income over short term, intermediate term and long term time frames. 
3. Periodic payment settlements can be used in the comprise of claims for damages that are taxable. What are Non Qualified Structured Settlements and Non Qualified Assignments for Tax Deferral (4structures.com)
4. Muliple income streams can be customized in the same annuity contract, or in multiple contracts, diversified by company if desired or prudent. What Are Structured Settlement Annuities? Structured Settlements FAQ (4structures.com)
5. Don't enter into a structured settlement if your mind is on "cashing out" in the near term.

One of the clearest elements of my 18 year mission as the Structured Settlement Watchdog is to help provide consumers the clearest path to accurate information about structured settlements. 

John Darer Reviews Divorce and Structured Settlement Annuity Issuer Service Standards

by John Darer CLU ChFC MSSC CeFT RSP CLTC

Divorce is a Reasonable Forseeable Possibilty

The divorce rate in the United States around 44.6% of marriages.  Source: The Hive Law

As the Structured Settlement Watchdog I typically do 100 hours of pro bono work each year. Not only is it well received and needed by consumers, it also informs on service gaps (known, unknown or should have known gaps) and on how companies in the industry can improve.  

Known Structured Settlement Servicing Issues That Have Been Uncovered

1.  Carefully Document the File When Split Funding Structured Settlements

When using split funded structured settlements in any combination, whether a mixed duration split, annuity company split, or a product split, it's a good idea to have a simple summary of the documentation delivered to the client.

In 2015, I received a call from a concerned Allstate annuitant whose benefits had been abruptly "cut off". The structured settlement payment stream from the annuity, was the annuitant's share from a divorce settlement, Naturally they were concerned. I did not write the policy.  

Unfortunately, just two years following its life insurnace companies ceasing underwriting this line of business, Allstate had outsourced customer service to a Phillipine call center with inadequate training. The rep ecnountrered by the annuitant was neither knowledgeable enough, nor helpful. The ill-prepared Allstate Phillipine call center rep needlessly sent the annuitant into a state of panic by incorrectly stating (because they likely did not know how Allstate issued annuity policies) that her benefits were over.

Fortunately, the annuitant contacted me, someone with enough experience to know the history and nuance and peculiarity of how Allstate issued policies. Instead of issuing a single policy, as is the customary practice with every single life insurance company I've dealt with in 40 years in the insurance industry, Allstate split the certain and life contingent portions into two separate annuity policies. 

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SIDE BAR

Structured settlement annuities are a unique policy form that enables different types of structured settlement payments to be combined in a single annuity contract.

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What happened was that the periodic certain policy stopped and the "switch" to the life contingent policy did not happen as it was supposed to. It took some calling to find someone at the home office of Allstate who was from the old structured settlement department  (Allstate stopped writing new structures in 2013), who could take remedial action but eventually the situation was rectified. It would have been helpful however and have saved the annuitant a quite a bit of agita, if the original broker had placed a summary in with the delivery of the policy. 

Split Funded Structured Settlements Require Careful Documentation - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and John Darer Reviews (typepad.com)

2.  When a Policy payment is split between two former spouses then each spouse should receive notices concerning the policy

Eight years from the above Allstate issue there is a new issue.  The payments are life contingent and require an annual attestation of Proof of Living [see Proof of Living and Structured Settlements (4structures.com)]. It was relatively smooth sailing from 2016-2022.  Something has changed. The divorce split annuitant had been contacting E.M. at Allstate and she would send the Proof of Living form which the annuitant would complete and send in. However apparently things changed in 2023 when E.M. was no longer there and Allstate having been reconstituted as Everlake Allstate Life Structured Settlements | What You Need To Know (4structures.com).

The split annuitant speaks of intolerable on hold times on the Everlake service line and being told  that Everlake (or its servicing company) would only send notice to her ex-husband, who she has been divorced from for 15+ years! She is listed as an annuitant in the company records as a result of the long in place divorce decree.

3. When one divorced spouse payee initiates a Structured Settlement Transfer and the Annuity Issuer will not split, or further split payments?

This exposes the non-selling split annuitant spouse and dependents to a servicing agreement and possible invasion of privacy from secondary market actors that are mostly non regulated. At what point should this issue be disclosed and who is responsible for disclosing it? 

4. Companies who are divesting their life insurance or annuity divisions or product lines that include structured settlements should include this consideration on their punch list

It seems to me that dealing with this forseeable issue earlier rather than later, by establishing updated policies and procedures to address these issues, will be less of a burden for the annuity issuer and qualified assignment company than having to dig out after a divestiture. There is the reputational risk exposure as well.

Divorce Statistics that Validate Why Annuity Issuers, Attorneys and Settlement Planners Must Initiate Discussions to Address Reasonably Forseeable Issues in updated Company Procedures and Workflow

• The average length of a marriage that ends in divorce is 8 years.
• Women file for 66% of divorces.
• The most common age for divorce is between 25-39 years old.
• The median age for divorce is 39.
• The divorce rate among those over 50 (gray divorce) has doubled since the 1990s.
• 60% of second marriages end in divorce.
• The rate of divorce decreases with higher levels of education and income.
• States that have no-fault divorce laws have higher divorce rates than states that require proof of fault.
• Children of divorce are more likely to experience emotional and behavioral problems.
• Children of divorce have a higher risk of divorce themselves when they grow up.
• The average age for couples to divorce for the first time is 30 years old for men and 29 years old for women.
• The divorce rate for first marriages within the first five years is around 20%.
• The divorce rate for military couples is higher than the general population, with a rate of 3.7% compared to 3.2%.
• The percentage of divorced adults in the US has more than doubled since 1960, from 9% to 22%.
• The percentage of divorced adults who remarry is around 75%.
• The divorce rate for couples who marry before age 25 is around twice as high as for those who marry after age 25.
• The divorce rate for same-sex couples is around 39%

Source: 113 Divorce Statistics On The Divorce Rate In America (For 2023) - The Hive Law

What About Non Binary Couples and Divorce?

How Many Gay Marriages End In Divorce? - Pride Legal

 

 

 

 

Annuities and "Bobby Bonilla Day" | Time to Stick a Fork in It?

by John Darer CLU ChFC MSSC CeFT RSP CLTC

If you really think about it, you too may find it quite odd that some promoting annuities, including structured settlement annuities, persist with the lack of awareness in using the joke that is Bobby Bonilla Day in their annuity marketing. 

Does Bobby Bonilla Have An Annuity, or Something Else?

Was what Bobby Bonilla agreed to an annuity, or was it actually unfunded deferred compensation? Let's discuss...

What is an Annuity in New York?

"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

Is/Was the New York Mets an Insurance Company?

Is the New York Mets an insurance company? Hmm, we'll revisit that later in this post.

Bobby Bonilla Day | "In Good Fun" Picking The Scabs Of Victims of a Crime Every July 1st?

Marketers seemingly can't help themselves in making Bernie Madoff part of the Bobby Bonilla "annuity" story. in marketing materials and news articles on an annual basis. The repetiton of the story and the Madoff connection, is disprespectful to victims of the Madoff Ponzi scheme, . Among Madoff's victims were director Steven Spielberg, actors Kevin Bacon and Kyra Segwick, Nobel Peace Prize winner and Holocaust survivor the late Elie Wiesel, Hall of Fame pitcher Sandy Koufax, in addition to former Mets owners Fred Wilpon, Jeff Wilpon and Saul Katz who were major investors, not to mention others who were not celebrities. 

"As a side note, the Mets had significant investments at the time with Bernie Madoff and believed they were poised to rake in large profits to offset some contract moves. We all know that did not work out very well (more on market volatility later)". -Boston area structured settlement brokerage firm Chronovo "How an Annuity Turned $6M into $30M!!!" June 30, 2022 (and still posted on its website June 20, 2023)

Too bad they didn't read this, or if they did read it, didn't give it much thought:

• "Some victims, including those who could barely afford to invest in the first place, lost their entire life savings and several later committed suicide as a result". Source: Daily Mail April 14, 2021
• For Madoff Victims, Scars Remain 10 Years Later : NPR
• "It was disbelief. It was distrust. I mean this man was highly recommended,” said Ilene Kent of Columbus, Georgia, who said her elderly parents lost three-quarters of their net worth in the $65 billion fraud".  CNBC December 10, 2018
• For Bernie Madoff victims, 'betrayal still hurts' years later | CUOMO | Watch (msn.com)  January 11, 2023

Must people keep picking at these people's scabs as a reason to hock annuities, to party, or in one case, offer mobile phone service?  Was this "Eephus Pitch" about something that wasn't even an annuity, as defined by New York's insurance regulator? Would it be enough without the embellishment of a financial term and the tie in by sales people and reporters to a dead crook?  Perhaps not.  Please read on.

Fact or Fiction?  Bobby Bonilla Day| Was It Really an Annuity, or Just Unfunded Deferred Compensation?

This 2020 article by NBC Sports explains deferred compensation. Reminder: Bobby Bonilla's payments from the Mets aren't mockworthy - MLB | NBC Sports

Had the Mets actually purchased an annuity to fund their obligation to Bobby Bonnilla from the outset, their cost would have fixed at effective discount rate in the annuity purchase cost at the time the deal closed. But they would have had to put up the cash to buy the annuity which they were using for other things. They would have locked-in the prevailing rate at the time of the contracted agreement and instead of getting squeezed as interest rates dropped, the present value of the payments would have done the opposite.

Interest rates/ Discount rates rise means lower present value. Conversely interest rates/ discount rates drop means higher present value.

So... if the New York Mets were/are not an insurance company as that is defined under New York law and had the New York Mets owners had actually funded their obligation to Bobby Bonilla by buying an annuity, they would not have found themselves in the financial predicament they found themselves in. And, if it wasn't an annuity and all the only logical conclusion putting together these clues, then it undermines the entire sales pitch of those that make a meal out of "Bobby Bonilla Day"

Bobby Bonilla Deal Referred to as Deferred Payment Agreement NOT an Annuity

Deferred-money deals have been going on for a long time, but the Mets did more of them than most, according to a 2016 report by ESPN. The first deferred-money deal we know about is Darryl Strawberry's 1985 contract, in which the Mets deferred 40 percent of his 1990 $1.8 million team option ($700,000) at a 5.1 percent interest rate. The deal, which pays out $1.64 million from 2004 to 2033, was obtained through a life insurance company.

Bonilla's agent, Dennis Gilbert, was an insurance agent at the same time he developed into a superagent (Gilbert's clients included Bonilla,Barry Bonds, Jose Canseco and Danny Tartabull), so he was more uniquely prepared to understand annuity-type payouts than other agents.  Source: ESPN " Why the Mets Pay Bobby Bonilla" June 30, 2016

And the definitive from Bloomberg, citing Dennis Gilbert, Bobby Bonilla's frickin agent...

"Nothing about this Bonilla contract seems so bad so far, right? No talent squandered, no flotsam acquired in return. Just a rich family’s pocket change. Who cares? It’s not your money. Most accounts of the Bonilla deal describe it as a bold innovation gone awry, but it wasn’t in either respect. It was just an annuity. (Technically, Gilbert clarified for me, it was “nonqualified deferred compensation.” Annuities pay out for life.)  See Bobby Bonilla Contract Was Good for Baseball’s New York Mets - Bloomberg  by Devin Gordon March 16, 2021 

Time to Switch Up The Narrative and Pinch Hit For Bobby Bonilla as an "Annuity" Example

Bobby Bonilla made a good deal.  But enough already. As I've previously proved in prior writing, Bonilla's stats and his "annuity" was well eclipsed by more than capable former baseball players.

In 2022, I highlighted how a Boston area company opted to promote Bobby Bonilla Day 2022. despite local legend Manny Ramirez having a far more impressive career, better stats and a better "annuity", or deferred payment agreement, I also cite Ken Griffey, Jr. and others who are better examples. See Chronovo Could be Promoting Annuities Using Red Sox Legend Instead of Bobby Bonilla, NY Mets Madoff Misery - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary (typepad.com August 4, 2022

What about Babe Ruth  (1895-1948) who played for the Boston Braves and the New York Yankees?

Babe Ruth DID have annuities and actually bought annuities. For example, see 1923 Babe Ruth Annuity from Equitable Life Assurance Society

The image from the auction house includes authentication "The policy (12 x 17 inches),which is not signed by Ruth, displays one horizontal and two vertical folds (as issued), as well as a few small edge tears and tiny stains. In Very Good to Excellent condition overall. Accompanied by a second-generation photo (10 x 8 inches; of Babe Ruth (late in life) shaking hands with an unidentified insurance executive and vintage newspaper clippings documenting his annuities with the Equitable Life Insurance Society"

" I may take risks in life, but I will never risk my money, I use annuities and I never have to worry about my money"-Babe Ruth

The inscription on Babe Ruth's grave at Gates of Heaven cemetery in Valhalla New York reads

"May the divine spirit that animated Babe Ruth to win the crucial game of life inspire the youth of America!"- Cardinal Spellman   Source: Find-a-Grave.com

What About NBA legend Shaquille O'Neal on Annuities? Shaq actually bought annuities

Shaq: “He was very successful and he had saved a lot of money, so I asked him how he and his family did so well. He told me, “We have annuities.” I asked, “What the hell is that?” He explained to me, “It’s when you pay a life insurance company a single premium, which they will pay back years later in the form of a fixed sum.” That sounded like something I needed. When I started making all the big bucks and I had more money than I could spend, I put big hunks of it into annuities. I bought them for myself, my parents, for my brother, and for my two sisters. What it meant was when I turned forty years old, which back then seemed like light-years into the future, I would receive a nice monthly sum for the rest of my life that would keep me in excellent financial shape. Thanks, Lester.”  (Lester was Shaq's accountant)  Read the full story here Having blown $1,000,000 in 1 day, Shaquille O'Neal Sought Accountant's Help to Prevent Going 'Broke' in the Future - The SportsRush  April 19, 2023

Other NBA Players and Annuities

Grant Hill, Caron Butler among retired NBA players thriving financially - Sports Illustrated

Football Players and Annuities

What About Steve Young, Former USFL Quarterback "The Happiest Annuity Story Ever"?

Football For A Buck: Steve Young Has The Happiest Annuity Story Ever (forbes.com) October 10, 2018

SportsBlog :: NFL Retired Players United :: The NFL Player Annuity Plan: How Sweet it is! November 26, 2016

A Witty Story About The Rolling Stones and the Alliance for Lifetime Income

The Rolling Stones Know What You Need: An Annuity - The New York Times (nytimes.com)

Writers and Annuities

"Buy an annuity cheap, and make your life interesting to yourself and everybody else that watches the speculation".

Time to sunset the Bobby Bonilla Day false narrative. It may be a story for deferred compensation, but when Dennis Gilbert Bonilla's agent says it was a deferred payment agreement, it takes the wind right out of the sails from those pushing the Bobby Bonilla annuity false narrative. Think about it!

 

 

 

 

 

 

11th Circuit Court of Appeals Pulls The Plug on Cordero Serial Structured Settlement Factoring Case

by Structured Settlement Watchdog

The 11th Circuit of the United States Court of Appeals has pulled the plug on Lujerio Cordero's Serial Structured Settlement Factoring Case, following the majority opinion in the New York Court of Appeals in April 2023.

What is Serial Structured Settlement Factoring?

Serial Structured Settlement Factoring refers to actions by individuals who have engaged in multiple structured settlement factoring transactions, sometimes in a short time frame, leading in some of the worst cases to erosion of the financial security that was established at the time of settlement. 

The Cordero Serial Structured Settlement Factoring Case

Over the course of just twenty-two months, plaintiff-appellant Lujerio Cordero—a childhood victim of lead poisoning—assigned his rights to nearly one million dollars in structured settlement payments to factoring companies for pennies on the dollar. Through six transfer agreements that he lacked the capacity to understand, Cordero relinquished his rights to monthly payments with a total aggregate value of $959,834.42 spread over the course of about twenty-six years for a series of immediate lump-sum cash payments that amounted to $268,130.  Source: 11th Circuit Court of Appeals opinion filed June 16, 2023.  LUJERIO CORDERO, Plaintiff-Appellant, versus TRANSAMERICA ANNUITY SERVICE CORPORATION, a.k.a. Wilton Re Annuity Service Corporation, Defendant-Third-Party Plaintiff-Appellee,TRANSAMERICA LIFE INSURANCE COMPANY, Defendant-Cross Claimant-Appellee, on Appeal from the United States District Court for the Southern District of Florida D.C. Docket No. 1:18-cv-21665-DPG

Mother Helped Lujerio Cordero Sell His Structured Settlement Payments?

"At the urging of his mother, he gave up his right to the $1 million over the next three decades — in exchange for lump-sum payments of about $268,000, the court documents indicate", said Insurance Journal Structured Settlement Cash-out Left Impaired Man with Little. Transamerica Not Liable (insurancejournal.com) June 22, 2023

Lujerio Cordero's mother acted on his behalf in the establishment of the structured settlementin the first place.

11th Circuit Notes That Cordero DID NOT Sue the Structured Settlement Factoring Companies

After Cordero exhausted his cash payments, he endeavored to recover the money that he assigned to the factoring companies. But, instead of suing the factoring companies or attempting to void the transactions, Cordero sued Transamerica Annuity Service Corporation and Transamerica Life Insurance Company (collectively,“Transamerica”), the entities that issued and funded his periodic payments before he assigned them. Cordero asserted two claims against Transamerica: one for breach of contract under New York law, and the other for exploitation of a vulnerable adult under Florida’s Adult Protective Services Act (“FAPSA”), Florida Statute § 415.111  Source: Ibid.

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Side Bar

The wording of the 11th Circuit decision in the immediately above referenced section needs clarification in the opinion of this author.

Transmerica Annuity Service Corporation (TASC) was the Qualified Assignment Company and Transamerica Life Insurnace Company was the Annuity Issuer of the annuity that funded the periodic payment obligation that TASC

TASC did not issue the periodic payments TLIC did not fund the periodic payments. The Defendant or its insurer made a promise to pay the future periodic payments, the obligation to make the payments was assigned to TASC along with money and TASC then funded the future periodic payment obligation it assumed by way of the qualified assignment and funded it with a structured settlement annuity it purchased from TLIC.

For details of the sequencing, please visit this link and the flow chart on the page. How Structured Settlements Work | Structured Settlements Explained 4structures.com)_

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Cordero's Strategy | Attack Structured Settlement Annuity Insurers Not Factoring Companies

Thirteen months earlier, on May 18, 2022, Cordero's counsel was quoted in Do insurers have duty to question possibly ‘abusive’ annuity cashouts? | Reuters

“Because this is an important question without a clear answer, we certify it to the New York Court of Appeals,” the 11th Circuit said in a per curiam opinion by the three judges who heard argument in March (2022). Cordero’s lead lawyer, Brenton Ver Ploeg of Ver Ploeg & Marino, called the court’s question “perfectly appropriate.”

“This crucially important issue concerning abuses in the structured settlement industry is without a definitive opinion from New York’s highest court and long overdue for resolution,” Ver Ploeg said in an email,  Reuters' Barbara Grzincic reported at the time. We now know the answer.

The 11th Circuit Appeals Dismisses All 

This appeal followed the district court’s with-prejudice dismissal of Cordero’s claims and the New York
Court of Appeals answered a reformulated version of a question that we certified for its review. See Cordero v. Transamerica Annuity Serv. Corp., 34 F.4th 994 (11th Cir. 2022), certified question answered, No. 21, --- N.E.3d --- (N.Y. Apr. 25, 2023).

Given its guidance from the New York Court of Appeals that "such allegations (by Cordero) do not state a cognizable cuase of action for breach of an implied covenant (under New York law), we affirm the district
court’s with-prejudice dismissal of Cordero’s breach of contract claim.

Cordero's Florida Adult Protective Service Act (FAPSA) Claims Failed

Cordero’s FAPSA claim fails under the plain language of the statute. In his operative complaint, Cordero does not allege that Transamerica intended to deprive him of the use of his funds. See id. § 415.102(8)(a). Instead, Cordero asserts that Transamerica “allowed” (or “facilitated”) his exploitation by the factoring companies, which resulted in an unauthorized taking of his assets. Based on the facts that Cordero pleaded, Transamerica’s actions simply do not amount to “exploitation” as that term is defined in FAPSA.Because Cordero has failed to state a violation of FAPSA, we affirm the district court’s with-prejudice dismissal of his FAPSA claim.

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SIDE BAR

What is Exploitation Under Florida Law?

FAPSA § 415.102(8)(a) “Exploitation” means a person who:

1. Stands in a position of trust and confidence with a vulnerable adult and knowingly, by deception or intimidation, obtains or uses, or endeavors to obtain or use, a vulnerable adult’s funds, assets, or property with the intent to temporarily or permanently deprive a vulnerable adult of the use, benefit, or possession of the funds, assets, or property for the benefit of someone other than the vulnerable adult;

 

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In the footnotes the 11th Circuit remarked:

The facts as Cordero has alleged them are truly troubling. They describe a situation where it appears an industry is able to systematically victimize individuals who are not in a position to protect themselves. See Cordero, slip op. at 30 (Rivera, J., dissenting). But given the governing law, we cannot grant Cordero the relief that he seeks based on the claims that he asserted against Transamerica.

Attorney Ver Ploeg's comments from an email to a reporter published in May 18, 2022 and cited above, makes a false equivalency by commingling of the primary structured settlement market with the secondary market. 

Primary Market

• Insurance companies are regulated in each state that they do business.
• Insurance companies are required to use statutory accounting priniciples (SAP) when preparing their financial statements. Insurers in all states are required to use a special accounting system when filing annual financial reports with state regulators.
• Licensing of insurers, brokers and agents is mandatory.
• Having professional liability insurance is customary
• In addition to licensing many participants have industry professional designations and may hold additional professional licenses such as securities licenses.

Secondary Market

• There is no requirement for professional licensure in any state.
• A few states require registration of structured settlement transferees. Those that do have often been legislatures reaction to shockng stories exposure of misdeeds that appear in regional and national news media. However there is no licensing standard in the way that life settlements are regulated and how other fiancial professionals are regulated. One can onlyhope and continue to advocate for such a standard.  But the almost universal lack of such standard is on state legislatures who have had 22 years to get it right. 
• Probably one of the most notable statements in the New York Court of Appeals part of the case was Cordero's attorney's explanation of why Cordero did not go after the structured settlement factoring companies, which were referred to as " fly by night". This meme just about sums it up, figuratively speaking of course.
• While one can understand why a lawyer such as Mr. Ver Ploeg,would attempt to go for a perceived deep pocket. Nobody works for free, right?  Instead of shaking down life insurance companies that issue structured settlement annuities, while ignoring the bad actors, perhaps another avenue is those who are investing in reprobate structured settlement secondary market companies. Who is loaning the reprobate companies money to do what they do? If they can go after Jeffrey Epstein's bank, why not the deep pocketed investors in naughty structured settlement factoring companies? Perhaps it would be worthwile to explore those that finance serial structured settlement factoring transactions?  

Last updated June 24, 2023

Structured Settlements | Let's Get This Periodic Payment Party Started

by John Darer CLU ChFC MSSC CeFT RSP CLTC

A structured settlement is a financial solution that addresses what most people in America worry about the most. Structured settlements should always be considered in the settlement planning mix for this reason.

Why Structured Settlements? Because Certain Sells®. Certainty Sells.

Let's Get This Periodic Payment Party Started!

"You can do it in the mix, in the mix, in the mix...." -parody of old school hip hop classic Last Night a DJ Saved My Life, by Indeep (1982)

What is a structured settlement?

What is settlement planning?

Because Certain Sells® is a trademark of 4structures.com LLC  (USPTO Reg 6237309)

Structured Settlement Production Surpasses $2B For Second Quarter in a Row

by John Darer CLU ChFC MSSC CeFT RSP CLTC

The Structured Settlement Industry got off to a great start in Q1 2023, with substantial increases over Q1 2022. The structured settlement industry saw its second straight quarter with in excess of $2B in production.

Summary

1. The structured settlement industry placed $2,069,165,084 of premium in Q1 2023.
• This represents an increase of $904,770,552 or +77.7% Q1 YOY and the second straight quarter with industry production in excess of $2B.
2. Structured settlement industry case count totaled 7,180 in Q1 2023.
• This represents an increase of 2,572 cases or +55.8% Q1 YOY
3. Average structured settlement premium per case was $288,185 in Q1 2023.
• This represents an increase of $35,495 per case or +14% Q1 YOY   Source: Matthew Ross

MetLife was the leading company in terms of Q1 2023 production with $584,900,000. MetLife structured settlement underwriting companies are Mettropolitan Tower Life Insurance Company and Metropolitan Life Insurance Company. The former is the primary underwriting company and the latter is the MetLife underwriting company that has been in business since the 19th Century, having been founded in 1868.

Pacific Life was the second leading structured settlement annuity issuing life insurance company, not far behind behind MetLife, with $513,699,241  Together MetLife and Pacific Life made up more than 50% of the undustry's Q1 2023 production, combining for more than $1B in production between them in Q1. Pacific Life writing companies include Pacific Life Insurance Company in all states except New York and Pacific Life and Annuity Company for all structured settlement cases with a nexus to New York (e.g. venue, parties).

In third place in terms of production was USAA LIfe, which exploded in growth, leaning into its sweet spot on long term structured settlement payouts with $357,000,000

In fourth was New York Life Insurance Company, with $222,229,672, founded in 1845.

IStructure, the first and only uncapped index linked structured settlement annuity issued by Independent Life Insurance Company (the only structured settlement annuity issuer that issues structured settlement annuities  as its sole product line), is running at about 60% of Independent Life Insurance company sales according to company sources this author spoke with. Independent did $130,313,000 in Q1

Why Structured Settlements? Because Certain Sells®.  We have solutions to deal with the thing that most people worry about the most.

Because Certain Sells® is  a Registered Trademark of 4structures.com LLC

 

 

John Darer Reviews Broker's Claim that Structured Settlement Brokers Issue Annuity Policies

by Structured Settlement Watchdog

Who Issues Structured Settlement Annuity Policies?

Here's one answer...

"Structured settlement brokers...and are responsible for issuing the annuity policy to the plaintiff"- FAQ answer from the website of a California licensed insurance agent and structured settlement broker , retrieved April 29, 2023

 

According to the Insurance Information Institute however

 

"Annuities can be purchased through insurance agents, financial planners, banks and life insurance carriers. However, only life insurance companies issue policies".  See How are annuities sold? | III

 

Is an Annuity Policy "issued to the plaintiff" When a Structured Settlement Is Established?

 

No, an annuity policy is never issued to the plaintiff when a structured settlement is established. See How Structured Settlements Work | Structured Settlements Explained (4structures.com)

 

Structured settlement annuities can be purchased by Defendants, Insurance Companies for Defendants, or Qualfied Assignment Companies.

 

April is Financial Literacy Month – a month intended to raise awareness on planning for a secure financial future. It’s also a time to reflect on the state of your personal finances and explore opportunities to improve them one step at a time. 

 

Publishing what should be basic information directed to consumers, that is bereft of the accurate truth, would not be acceptable standard for someone who just passed a state insurance licensing exam, let only someone with decades of experience in structured settlements.

 

Let's try to do better, eh?

 

 

 

 

 

Cordero v Transamerica | NY Court of Appeals Rules AGAINST Cordero in Favor of Transamerica

by John Darer CLU ChFC MSSC CEFT RSP CLTC

The Focus Should Have Been on The Locus

The New York Court of Appeals has ruled against lead paint victim Lujerio Cordero in his battle against Transamerica to break new legal ground in the interpretation of structured settlement agreements, having attempted to do so without a focus on the "locus", the unlicensed and unregulated structured settlement factoring companies that actually completed 6 structured settlement factoring transactions, a point raised by the judicial panel in New York's highest court during oral arguments on March 16, 2023.

In writing for the majority decision, Judge TROUTMAN opined:

"The United States Court of Appeals for the Eleventh Circuit certified to this Court a question requiring us to consider whether a plaintiff sufficiently pleads a cause of action for breach of the implied covenant of good faith and fair dealing under New York law by alleging that, during a Structured Settlement Protection Act proceeding, defendants (i.e., the structured settlement obligor and the issuer of an annuity funding the settlement) failed to enforce the anti-assignment provisions contained in structured settlement and qualified assignment agreements. Based on the New York Court of Appeals' reformulation of the question, it concluded that such allegations do not state a cognizable cause of action for breach of the implied covenant".

Download Corderov Transamerica NY Court of Appeals 21opn23-Decision 4-24-2023

The case now goes back to the 11th Circuit Court of Appeals. 

Lujerio Cordero,
Appellant,
v.
Transamerica Annuity Service
Corporation, &c.,
Respondent,
Transamerica Life Insurance
Company,
Respondent,
et al.,
Third-Party Defendants-
Cross Defendants.

Transamerica Annuity, the qualified assigmment company used in the placement of Transamerica Life Insurance Company until Transamerica Life stopped writing strucured settlement annuities in 2003, is now known as Wilton Re Annuity Service Corporation.

Prior Blogs and Background

New York Court of Appeals Oral Arguments in Cordero v Transamerica - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary (typepad.com)  March 23, 2023

Anti-Assignment Provisions in Qualified Assignments Focal Point of Structured Settlement Litigation - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary (typepad.com)  March 6, 2023

Cordero v Transamerica | A Crowbar at "Pandora's Box" Due to Mostly Toothless State Regs and Judicial Immunity - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary (typepad.com)  February 14, 2023

New York Law Journal Headline April 25, 2023

NY Court of Appeals Dislodges Insurance Companies From Guardian Role in Sale of Structured Settlements | Law.com Radar

 

 

 

 

Pacific Life and Prudential Are Named Among World's Most Ethical Companies 2023 by Ethisphere

by John Darer CLU ChFC MSSC CeFT RSP CLTC

Pacific Life and Prudential, leading life insurance companies that issue structured settlement annuities, have been named among the World's Most Ethical Companies for 2023. For Pacific Life the Ethisphere recognition is for the 6th time, while for Prudential it is for the 9th time. Both Pacific and Prudential have been in business since the 19th Century.

How Does the Ethisphere Determine the World's Most Ethical Companies?

In 2006, Ethisphere launched the World’s Most Ethical Companies® recognition program to measure and showcase the superior achievements of organizations that are committed to doing business with ethics and integrity. The process is rigorous and objective. It includes a 200-point assessment, documentation review, and research into an organization’s reputation and ethical practices. The process itself provides a way for organizations to assess their own programs against leading practices. World’s Most Ethical Companies honorees also enjoy recognition of their exceptional ethics and compliance programs. Ethisphere also broadly shares the World’s Most Ethical Companies data to help all organizations understand and improve programs

Read more about the Ethisphere annual recognition program.

Cordero v Transamerica | A Crowbar at "Pandora's Box" Due to Mostly Toothless State Regs and Judicial Immunity

by John Darer CLU ChFC MSSC CeFT RSP CLTC

Does a Qualified Assignment Company Have a Duty to Annuitant to Enforce Anti-Assignment Provisions when confronted with a Structured Settlement Transfer Petition?

Lujerio Cordero is at the center of a controversy that AT BEST, if successful, could lead to reduced capacity for ALL structured settlement consumers. On referral from the 11th Circuit Court of Appeals, the New York Court of Appeals, New York's highest Court is considering whether or not the insurers that issue structured settlement annuities have a duty to question and contest possibly abusive structured settlement factoring activity petitions.

After reading this blog, others' may differ from my opinion, which is based on my extensive experience in the structured settlement and financial services industry and more than 17 years observing, chronicling and opining about the space as the Structured Settlement Watchdog. I believe that this case is an important one for the structured settlement industry and its stakeholders.  

Who is Lujerio Cordero?

Lujerio Cordero was, a childhood victim of lead poisoning when his family lived in New York in the 1990s.  A structured settlement was established the Westchester County lawsuit was settled. Sometime later, in multiple structured settlement factoring transactions Cordero assigned his rights to more than $900,000 in structured settlement payments to factoring companies for the only outcome there could ever be in such structured settlement factoring  transactions, pennies on the dollar.  However, as a result of the lead poisoning, Plaintiff contends he lacked the capacity to understand the six structured settlement transfer agreements he entered into with the factoring companies—agreements that contained allegedly false statements about Plaintiff’s need for immediate funds and failed to disclose his limited mental capacity. Florida state courts—after holding hearings where Plaintiff was not present or represented, approved the six agreements based on the factoring companies’ incomplete set of facts.

_____________________________________________________________________________________________

SIDE BAR

For more than two decades, some stuctured settlement factoring companies have, without consequence, individually or collectively participated in a vulture-like feeding frenzy. figuratively ripping almost every piece of flesh off the bone of structured settlements paid to recipients who have no business selling their structured settlements. In 2008, 15 years ago, I memorialized the words of Rhode Island Judge Netti Vogel in the following referenced blog.

Rhode Island Judge Vogel Warns of Financial "Vultures" - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary (typepad.com)  February 3, 2008. 

Years later, a multi-part expose by David Weissman, a reporter for McClatchy includes stories such as this from South Carolina:

Murdaugh and Mayhem | Client of Color Ripped Off. Then Factoring Cos. Churned His 6 Children's Structures - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary (typepad.com)

_____________________________________________________________________________________________

Lujerio Cordero's Appeal

Plaintiff Cordero sued Defendants-appellees Transamerica Annuity Service Corporation (TASC) and Transamerica Life Insurance Company  (TLIC) (collectively, “Transamerica”), the qualified assignment company that received money from the Defendant/Insurer and and the company that issued the structured settlement annuity that funded Cordero's periodic payments before he assigned them to the factoring companies for pennies on the dollar.  Transamerica subsidiaries issued structured settlement annuities until the early 2000s. 

Plaintiff Made Decision Not to Sue Structured Settlement Factoring Companies and Turned Turrets to a Deep Pocket

See my April 2, 2021 blog for background Lawsuit Over Insurer's Alleged Failure to Enforce Structured Settlement's Anti-Assignment Provisions in 6 Cash Now Deals Fails - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary (typepad.com)

The United States District Court for the Southern District of Florida GRANTED the motion of the annuity issuer and owner to dismiss plaintiff’s first amended complaint, finding that no such duty pertains, but provided leave for the plaintiff to file a second amended complaint. Plaintiff filed a second amended complaint on April 20, 2020

In ruling on the first Complaint, the District Court reasoned:

1. the anti-assignment provision exists to protect the annuity issuer and owner;
2. that provision did not require the issuer or owner to exercise discretion for the settlement payee’s benefit; and
3. requiring the annuity issuer and owner to analyze each proposed transfer would create new duties not required under the applicable Settlement Agreement.

The Eleventh Circuit then deferred its decision in Plaintiff’s breach of contract of claim, certifying to the New York Court of Appeals to answer: whether a plaintiff sufficiently alleges a breach of the implied covenant of good faith and fair dealing if he demonstrates that the defendant drastically undermined a fundamental objective of the parties’ contract, even when the underlying duty at issue was not explicitly referred to in the writing?

What Are Anti-Assignment Provisions in a Structured Settlement Agreement?

Patrick Hindert, of Independent Life Insurance Company, citing on his company's blog from the seminal industry text he co-authors (independent of Independent Life), says that one of the requirements for a “qualified assignment” under IRC 130 is that “periodic payments cannot be accelerated, deferred, increased, or decreased by the recipient of such payments.”

In addition to this statutory language, Hindert states, many structured settlement documents also have added additional restrictive language such as stipulating that the payment recipients may not assign, transfer, pledge or otherwise encumber the rights acquired by settlement.

Validity of Assignments of Structured Settlement Payments

Hindert and his co-authors state that "where a clear anti-assignment provision appears in a bilateral agreement, the general (majority) rule is that it will be enforced, unless some other provision of state law overrides the parties’ express agreement not to permit assignment of future payments – or if the party or parties having the right to enforce the anti-assignment provision (in structured settlements, generally the assignment company and annuity provider) give their approval and support.

There is a minority view, followed in Connecticut, that an anti-assignment provision is not clear unless it expressly makes void any attempt at assignment. Under this minority view, the words “this agreement may not be assigned” are not sufficient. Connecticut distinguishes between the right to assign and the power to assign and requires both the power and the right be negated to prevent an assignment. To enforce an anti-assignment provision in Connecticut, therefore, an agreement must expressly say that any attempt to make an assignment is void and of no effect".

What is a legal duty?

A legal duty is an obligation, created by law or contract. A legal duty requires a person to conform their actions to a particular standard. And it also carries with it a recognition that the law will enforce this duty to the benefit of other individuals to whom this duty is owed. Put another way, the existence of a legal duty depends on whether the interest that a defendant has allegedly invaded is entitled to legal protection.  Source: Legal Information Institute, Cornell Univ. Law

Transamerica Brief Highlights

Federal tax rules facilitate structured settlements

State SSPAs require courts to review all proposed transfers
of structured-settlement rights .................................................p14
1. New York’s SSPA applies to settlement agreements
that, like Cordero’s, are governed by New York law ........................p17
2. Florida’s SSPA applies to transfers by payees who,
like Cordero, reside in Florida ..................................................p19
C. SSPA courts approved Cordero’s transfers of his
structured-settlement payment rights.........................................p20
1. Different parties executed the Settlement
Agreement, the Qualified Assignment, and the
Annuity Contract...................................................................p22
2. Courts approved Cordero’s transfers of his
structured-settlement payment rights to the
factoring companies...............................................................p24
3. Cordero sued the Transamerica defendants rather
than the factoring companies ...................................................p26
Argument............................................................................p28

A. The Transamerica defendants made no implied promise to
Cordero to object to his transfers of payment rights during
the court proceedings that approved them ...................................p30
1. Cordero has no contract with Transamerica Life
Insurance and thus no implied covenant with it..............................p34

_____________________________________________________________________________

SIDE BAR   How a Structured Settlement Is Established

See the following flow chart describing how a structured settlement is established. Note that step one is the establishment of a future periodic payment obligation as part of the consideration for the release of liability. Then, in step two. the obligation to make the periodic payments is transferred, with the plaintiff's consent, to the qualified assignment company.  An assignmment payment is made by the Defendant/Insurer or QSF to the qualified assignment company, which then purchases an annuity as a qualified funding asset  (qualified funding asset is defined in IRC 130(d). The Settlement Agreement would have clearly stated that the annuity would be owned by the qualified assignment company, which has all the rights of ownership. The key point is that the payee is not applying for and purchasing an annuity, the assignment company is.

__________________________________________________________________________________________________

 

2. Cordero’s implied-covenant theory is incompatible
with the common law in any event .................................. .........p36
a. Cordero’s theory is incompatible with the
common law because it calls for the parties to
obstruct each other during contract
performance ......................................................................p39
b. Cordero’s theory also is incompatible with the
common-law rule allowing obligors to waive
anti-assignment clauses .........................................................p45
i. Cordero had no right to compel the Transamerica parties to enforce anti-
assignment clauses against assignments he approved .................... .p47
ii. The law gives obligors the right to not enforce anti-assignment clauses that say
obligees have no “power” to make assignments........................... .p50
iii. Cordero has no viable theory that the Transamerica defendants’ non-
enforcement of these clauses was an abuseiscretion ......................p55
B. Cordero’s implied-covenant theory is incompatible with
policy choices embodied in state SSPAs.......................................p58
1. New York’s SSPA reflects the General Assembly’s
judgment that issuers and obligors should not be
liable for court-approved transfers............................................p59
2. The other states’ SSPAs operate in a manner that is
inconsistent with Cordero’s implied-covenant theory .....................p62
Conclusion ........................................................................p68

In cases in which the plaintiff’s conduct is what caused the injury alleged, on the other hand,an implied-covenant theory makes no sense. Nor is there foundation for Cordero’s suggestion that, “if [the parties’] attention had been drawn” to the issue when these contracts were executed, the expectations wrapped up in their obligation of good faith would have included an understanding that the Transamerica defendants were promising to keep him from selling his payment rights if he
ever demanded to do so in the future That would amount to a promise to save the other contracting party from its own
choices, and that is not what the implied covenant does. As Judge Posner has suggested, it is “unlikely” that any State has, “in the name of” the implied covenant, made “every contract signatory his brother’s keeper.

Read the Transamerica Respondents' full brief  Download Cordero Respondent Brief for Filing

Bipartisan Congressional Support for Structured Settlements

Bipartisan congessional support for structured settlements has been unwavering for more than 40 years.  In addition to enacting the Periodic Payment Settlement Act of 1982, which went into effect in January 1983, the Victims  of Terrorism Tax Relief Act of 2001  (VTTRA 2001), included legislation that created IRC 5891 which opened a liquidity spigot for structured settlement annuitants. 

The intent of the 2001 Federal legislation to allow liquidity, with limitations, was in good faith. It took another two decades for all of the 50 states and DC to adopt a state structured settlement protection act.

Cordero Case Exposes the Strategic Failure of State Legislatures to Deal With Known Reasonably Forseeable Risk

The Cordero case is the latest case to expose (1) a two decade long strategic failure of state legislatures to be proactive and enact adequate structured settlement protection laws that includes licensing and regulation of structured settlement factoring companies' sales and solicitation practices in a manner consistent with other financial services, leading in some cases to disastrous outcomes for targeted annuitants; (2) serious questions about the adequacy of state judicial reviews of structured settlement transfer petitions when judges approve multiple structured settlement transfer petitions in short tiime frames, with disastrous outcomes for unsophisticated annuitants and the judges, immune from any consequences. Imagine some judges as bartenders with with a gavel, who continue to serve the obviously drunk, as if they were following God's guidelines to power delivered to Bruce in Bruce Almighty  (" you can't mess with free will").  The system is far from adequate.

But as I have persisted for the majority of better part of close to two decades, the intervening years suggest that the absence of regulation of sales practices in the structured settlement secondary market which would give a regulator the power to fine, suspend or revoke authority to transact business has led to some poor outcomes. That and judicial immunity for inadequate oversight. 

These negative outcomes were reasonably forseeable, yet from the outset and at every opportunity to amend the state laws to regulate companies and salespeople who interact with annuitants and their sales and solicitation practices, legislatures failed, in my opinion. 

Consider the following " small" sampling:

1. The collapse of the Advance Funding Ponzi Scheme, although those in charge of Advance Funding have not been arrested or convicted. See Advance Funding LLC Structure Advance Program a Madoff Like Ponzi Scheme Says New Complaint - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary (typepad.com)
2. The collapse of SMA Hub, a tertiary market company that marketed factored structured settlement payment streams as annuities to investors, through financial advisors, including several settlement planners with ties to prominent trial lawyers. Some of the factored streams with a bogus secondary market annuity label were sourced from Access Funding (see 3, 4 & 5 below)
3. The collapse of Access Funding in October 2015 after blistering high profile mainstream news reports about the Access Funding scam
4. The Consumer Financial Protection Bureau legal action against Access Funding which uncovered exhibits such as the Access Funding training manual targeting "Lead Paint Virgins".Lee Jundanian and Company's Two Year Pillage of Baltimore "Lead Paint Virgins" | Victims to Get 4% of Money Owed Says AG - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary (typepad.com)
5. The indictment in 2021 and subsequent conviction in November 2022 of an officer of Access Funding (and its successor Reliance Funding) its lawyer and a Derwood MD lawyer who did gave purported Independent Professional Advice.Criminal indictments filed against Maryland company that targeted Baltimore lead paint victims’ settlements – Baltimore Sun
6. The Sumter County forum shopping mall, the courtroom of Judge Michelle Morley, the scene of pillaging of New York City lawyer Evan Torgan's excellent work for the late James McMillan,  the 2003 Staten Island Ferry crash victim's settlement undone in a series of in a series of improvident structured settlement factoring transactions. The first factoring vulture appeared 4 years after the 2009 settlement. McMillan had a 2012 attempt dismissed by a New York judge and then was financially raped through 9 transactions in 2013 alone in the Sumter County Florida "kill zone", one of several preferred forum shopping venues that cash now pushers were using at that time. Paralyzed Staten Island Ferry Victim in Structured Settlement Annuitant v Factoring Co. War Part 1 - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary (typepad.com)
7. Class Action lawsuit against former structured settlement annuity issuer Symetra certified Symetra Hit With Class Certification In Structured Settlement Lawsuit Over Affiliate Factoring Operation - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary (typepad.com)
8. Judges like now retired Judge Dean Sword of Portsmouth Virginia presided over the majority of Terrence Taylor's ridiculous number of approved sales in two years. The flawed system that allows companies to make millions off the injured - The Washington Post. That the Taylor case is finally set for trial in June 2023, 8 years after its filing, speaks volumes. 
9. FL Company Preyed on Mentally Disabled Man's Structure and Caused Alleged Loss of Government Benefits - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary (typepad.com)
10. High Pressure Structured Settlement Factoring Company Mailers Reviewed - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary (typepad.com)  [2019]
11. Was Client First Settlement Funding Show Of 8% Investment Projection to Structured Settlement Annuitant A Permissble Inducement? - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary (typepad.com)
12. How Long Are State Legislatures Going to Tolerate Bribes for Structured Settlement Factoring Quotes? - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary (typepad.com)
13. JG Wentworth Faces Potential Liability in TCPA Class Action (natlawreview.com)  July 26, 2022
14. A Miami lawyer forged structured settlement transfer documents a massive scandal. Lawyer Charged With Forging Signatures Of 7 Judges On Over 100 Court Documents - Above the Law  February 24, 2016. It was the second such incident involving stuctured settlement factoring transactions in less than a year. A 2015 incident involved  forgery by a paralegal for a New York City personal injury law firm that also served structured settlement factoring companies.
15. Houston Plaintiff Lawyer's Company's Purchase of Client's Structure | "Crossing The Streams" - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary (typepad.com)

When capital supply tightened as the result of the Financial Crisis of 2008-2009, secondary and tertiary market companies sought to raise capital from alternative sources. They began to offer factored structured settlement payment rights to individual investors as annuities  ("secondary market annuities"), knowing that these were factored structured settlement receivables were not annuities and still are not annuities. In addition to calling the receivables annuities when soliciting investors in the receivables, some solictors even inferred state guaranty fund protection for those who purchased receivables thinking they were annuities, a practice that would be unlawful if they were indeed annuities.

These were perhaps unnoticed, or perhaps ignored, by state financial regulators.

The NAIC Takes Action, Finally

It took until 2017 for the National Association of Insurance Commissioners (NAIC) to make revisions to the Life & Health Guaranty Association Model Act (#520) which at 3(B)2(n), specifically excludes:

"Structured settlement annuity benefits to which a payee (or beneficiary) has transferred his or her rights in a structured settlement factoring transaction as defined in 26 U.S.C. 5891(c)(3)(A), regardless of whether the transaction occurred before or after such section became effective".  As of July 2022, 37 states had adopted the 2017 Revisions. 

Insurers are among those who buy factored stuctured settlement payment rights through securitizations 

When Judges Do Their Job Under the Structured Settlement Protection Act

Judge in Niagara Foils Structured Settlement Factoring Last Stand, Citing Bob Dylan in Reject of Boca Broker - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary (typepad.com)

NY Judge Lisa Fisher Sings "Bier Bier Baby" to Forging NY Structured Settlement Seller - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary (typepad.com)

Last updated June 6, 2024