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

Wilcac LIfe Registers as a Structured Settlement Transferee in MD Giving Its Annuitants "Home Team" Liquidity Option

by John Darer CLU ChFC MSSC CeFT RSP CLTC

Wilcac Life Insurance Company is listed is one of the three registered structured settlement transferees in Maryland, giving former Continental Assurance Company (CNA) structured settlement annuitants a "home team" liquidity option.  Wilcac Life Insurance Company acquired the structured settlement portfolio of CNA several years ago. It's name is an amalgamation of Wilton Re and the initials for Continental Assurance Company.

Maryland regulations established in the wake of the Access Funding debacle make it unlawful for a factoring company, or “structured settlement transferee," to acquire structured settlement payment rights in Maryland without first registering with the Office of the Attorney General. 

It is unclear whether or not Wilcac intends to buy structured settlement payment rights from annuitants of life insurance companies it has not acquired. A number of insurance companies buy securitizations of structured settlement payment rights from companies such as JG Wentworth.

If you have a structured settlement originally with Continental Assurance Company, which is now Wilcac Life Insurance Company, and have liquidity needs by all means get a quote from Wilcac Life, but ALWAYS shop around. Always speak to an independent licensed financial professional.

MD Attorney Shafted Multiple Allstate Structured Settlement Payees with Bogus IPAs

by Structured Settlement Watchdog

Charles E. Smith's Structured Settlement IPA Work | The "Pffft" That Keeps on Lingering

Allstate offered an Advanced Funding Exchange Notice (AFEN) liquidity option as a rider its standard

"Trusty" Lawyer IPA

structured annuity contract, which according to its terms, permitted annuitants to exchange their future payments for a lump sum at a discount rate of 8%.  This is material information that was publicly available and that attorney Charles E. Smith should have known when he was engaged to provide independent professional advice. 

Charles E. Smith's bogus independent professional advice to Baltimore lead paint victims with structured settlements has already been the subject of a Washington Post expose, or two.   I also posted about his "work" in June 2015 (see link below).

But having been provided with and examined a list of cases where Charles E.Smith was listed as the provider of independent professional advice (or alleged independent professional advice), at a trade conference,  the details of just how badly Charles E. Smith's shoddy advice shafted Allstate structured settlement annuitants in particular, including the late Freddie Gray and his family, have become crystal clear.

Discount rate on a sampling of Maryland structured settlement transfer cases involving Allstate Life Insurance Company payee where Charles E. Smith is listed as the IPA. Compare to Allstate's AFEN rate of 8%.

Melinda Buchanan  CAE14-13520  10.48%

Brittany Marshall    CAE14-13538   18.71%

Melinda Buchanan  CAE-14-13537  10.48%

Vincent Jones Jr.   CAE 13-35467   13.93%

Jason Blake            CAE 13-36530  16.73%

Tysean Robinson      CAE 13-37648  18.05%

Crystal Linton          CAE  13-37649  22.52%

Crystal Linton           CAE 13-28909   19.85%

Frank Driver              CAE  14-02175   25.07%

Brian Stokes              CAE 13-23519     22.80%

Freddie Gray Jr.       CAE 13-28911      17.10%

Carolina Gray            CAE 13-28911      17.10%

Fredericka Gray        CAE 13-28910     17.10%

Floyd Lindell             CAE 13-28912      12.31%

MD Lawyer Charles E. Smith Sued for Bad Structured Settlement Advice in IPA   June 19, 2015

How many of the payment streams from these cases ended up as structured settlement derivatives sold as scam labeled "secondary market annuities" to investors?

Maryland's structured settlement transfer laws were amended and higher standards became required for IPAs as a result of the furor created by the Washington Post expose.  An appeal of the settlement in a class action lawsuit brought on behalf of victims, by the Maryland Attorney General, is pending oral arguments in March 2019.

 

 

 

 

 

Legal Scholars Jump on Bandwagon for Regulation of Structured Settlement Factoring

by John Darer CLU ChFC MSSC CeFT RSP CLTC

 

University of Maryland Law Professor Opines That Structured Settlement Transfers Involving Lead Paint Victims Should Be Unlawful

In Structured Settlement Sales and Lead-Poisoned Sellers: Just Say No”, University of Maryland Law Professor Karen Syma Czapansky questions whether courts should permit sales of periodic payments under a structured settlement when the structured settlement is compensation paid by the defendant in a tort suit brought by or on behalf of the seller for damages caused by childhood lead poisoning that left the seller incapable of self-support. Professor Czapansky concludes that allowing sales in this situation is unjustifiable and opines that the Maryland SSPA should be amended to ban the sale of structured settlements by lead-paint victims, just like workers compensation recipients.  (36 Va. Envtl. L. J. 1)

Four Issues Professor Czapansky Raises in Reaching Her Conclusions

• Current structured settlement factoring law gives the parent no opportunity to have a say about a sale of structured settlement payments, even in cases where the parent agreed to a bar on the assignment of the benefits and where the parent is likely to become responsible for the care of the seller who spends a lump sum improvidently.  
• Whether lead-poisoned sellers can be protected from being exploited by factoring companies that arrange for sales of structured settlement benefits without spending an undue  amount of taxpayer resources to provide public supervision of the transactions.
  
• While converting an income stream to a lump sum is desirable in a limited number of cases, judicial procedures  adequate to the task of discriminating between desirable and undesirable sales would be costly compared to the usual lack of benefit to potential sellers.
• Improvident sales unfairly impose costs on taxpayers, communities and parents, even though both the government and, in most cases, parents, expend resources establishing the structured settlement as a reliable source of support for the sellers.

Three alternatives to a straight ban discussed by Professor Czapansky

• Treat the sale of a structured settlement the same as other contracts by eliminating the favorable tax treatment and the judicial review
• Allow a Lead-Poisoned Recipient of a Structured Settlement to Sell Income Stream and Favorable Tax Treatment after Review by a State Court
• Prohibit the sale of structured settlement payments without the consent of a limited guardian of the property  (periodic payments).  No sale could be approved unless the factoring company convinced the guardian to approve the sale. Unlike the usual seller, especially one with a history of lead poisoning, a person named as guardian of property should have experience and understanding in financial transactions to make well-considered decisions on behalf of the person under guardianship. The guardian is also under a duty of loyalty, which should preclude the guardian from making a sale for reasons other than the well-being of the person under guardianship. Finally, guardians are subject to judicial supervision and other protections such as bonding and liability for failure to act properly.

Other salient points brought up by Czapansky

• Failure of Judges to See Their Role as Protective 
• Factoring Company Success Rate Shows How SSPAs are Inadequate

"Mississippi Burning" on Current Structured Settlement Protection Acts

It's Your Money and We Want It Now: Regulation of the Settlement Factoring Industry in the Era of Dodd-Frank and the Consumer Financial Protection Bureau 86 Miss. L.J. 151, 173-75 (2017)  by Alexander Ash.

"Calls for reform in the structured settlement factoring industry have recently grown louder across the nation. However, those calls ring hollow and many recipients of structured settlements are suffering abuses at the hands of the structured settlement factoring industry. Structured settlements substitute a lump-sum award with periodic payments, protecting against spendthrift behavior. The purpose of a structured settlement is to provide an income stream for the long term care of an injured party, and by “factoring,” often at a heavily discounted rate, the rights to future payments form the settlement leads to this purpose being completely undermined.

The Missisippi law professor suggests a comprehensive approach enhancing existing protections, and layering in new federal regulation will advance the purpose of the structured settlement. Three solutions to protect the purposes of structured settlements and minimize unwanted outcomes in structured settlement factoring transactions. These include (1) increasing existing standards of review, (2) creating three protected “classes” of structured settlement recipients, and (3) regulating structured settlement factoring on an industry-wide scale with the Consumer Financial Protection Bureau. These proposals do not call for sweeping changes, but instead using existing mechanisms to protect the goals of structured settlements, as well as the recipients of structured settlements"

" Blue Bayou"

Indeed in the next state over, Louisiana's structured settlement protection laws could do with a little beefing up. A 2016 predatory deal, concocted by a personal injury lawyer in a position of superior knowledge and trust, may have taken financial advantage of a personal injury client a little more that one year after placing him into a large structured settlement,  by entering into a structured settlement factoring transaction using an offshore company controlled by the lawyer and shafting his client for in excess of $1 million spread, in an awful deal that bore an effective discount rate in excess of 22% when a fair cost of money would have been less than a third of that amount. The documents submitted to Acadia Parish (twice) each contained false representations to the Court as to the discount rate and the documents in public record show the client's and his wife's social security numbers in plain text. An attempt was then made to pawn of the cash flows to other settlement purchasers for a profit through an intermediary.  Read Personal Injury Lawyer Buys Client's Structure 1 Year After Settlement and Shafts Client in Awful Deal and Houston Plaintiff Lawyer's Company's Purchase of Client's Structure | "Crossing The Streams"  for more details.

 

 

 

 

 

Baltimore Structured Settlement Forum To Address Factoring in Maryland

by Structured Settlement Watchdog®

Washington Post's Terry McCoy reported that Access Funding, a Bethesda-based cash now pusher, purchased structured settlement payments worth $146,000 from Freddie Gray for “around $18,300.”   Yes, THAT Freddie Gray. The story went on to detail the the Access Funding business model, which it said included purchasing structured settlements awarded to Baltimore residents who have suffered from lead paint exposure at steep discounts and typically seeking the required court approval from a single judge in Prince George’s county  (as opposed to Baltimore City)

Today October 26, 2015, there is a public structured settlement forum on the subject taking place at the University of Baltimore John and Frances Angelos Law Center Moot Court Room – Room 008  1401 N.Charles Street Baltimore, MD from 3-5pm EDT.

University of Baltimore
John and Frances Angelos Law Center
Moot Court Room – Room 008
1401 N. Charles Street
Baltimore, MD - See more at: http://www.greenandhealthyhomes.org/latest-events#structured-settlements-forum

During today's structured settlement forum, Congressman Elijah Cummings (D-MD), Congressman Chris Van Hollen (D-MD), Maryland State Senator Jamie Raskin and Maryland State Delegate Sandy Rosenberg will hear directly from Amanda Lane, whose family has been aggressively pursued by structured settlement purchasers. Ms. Lane’s daughter was awarded a structured settlement as a result of lead paint exposure, and she will speak to the business practices of companies seeking to purchase payments from her daughter’s settlement. Also joining Ms. Lane will be Ruth Ann Norton, President and CEO, GHHI; Elizabeth Embry, Chief, Criminal Division, Office of the Attorney General for the State of Maryland; and Eric Vaughn, Executive Director, National Structured Settlements Trade Association (NSSTA) to discuss shortcomings in existing law that leave structured settlement recipients vulnerable to predatory business practices.

Factoring Reforms that do not provide prophylaxis to address business conduct will fall short

Participants in the structured settlement secondary market should be subject to a licensing and regulatory standard on par with other financial professions, including life settlements.  Individuals with felonies on their records should not be permitted to participate in the structured settlement marketplace.  The structured settlement secondary market has been allowed through legislative oversight, to operate without a regulator to set standards, including rules of conduct and solicitation of the public.

Nobody, I repeat nobody currently has the power to fine, suspend or revoke authority to transact business. The status quo is outrageous.