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

JG Wentworth's Instagram | A Major Demotion, Big Paycut and "Watch Savings Bloom"?

by Structured Settlement Watchdog

Another headscratcher from the structured settlement factoring industry.

"Start things off by letting your savings bloom" claims a sticky JG Wentworth Instagram Post from 2022 that still

JGW Instagram screenshot 7-21-2024

features prominently for the hashtag #structuredsettlement at time of this posting . It presents the impetus for an interesting social commentary.

I've Never Thought of Spring as "Silly Season" But...

JG Wentworth is universally known for being a #cashnow company.  JG Wentworth is the undisputed 800lb gorilla of cash now for structured settlements. HOWEVER, cash now for structured settlements is a losing pennies on the dollar value proposition. So sell your structured settlements to JG Wentworth for pennies on the dollar and "let your savings bloom"?  What social media guru came up with that one and who were they targeting?

Would you give yourself a demotion?

Would you give yourself a demotion, a reduction in rank or status that means a significant reduction in salary to start a savings plan, in any season of the year?  Would you trust any sales person who pitched you with that?

 

Selling A Structured Settlement in 2024? Get The 411 on Cash Now. Don't Be a Victim (4structures.com)

 

 

 

 

 

 

Survivor Payments | "All payments From a Structured Settlement Are Guaranteed" ?

by John Darer CLU ChFC MSSC CeFT RSP CLTC

Structured Settlement Survivor Payments

Seen on the Internet about Structured Settlements this week

A. "If no beneficiary was designated, the payments will become part of the recipient's estate and be distributed according to their will or state laws".

The statement needs further clarification.

Commentary

1. If the Payee dies without having designated a beneficiary to the annuity issuer prior to the Payee's death, AND there are any remaining period certain payments or guaranteeed lump sums, those payments will be paid, when due, to the Estate of the Payee. From there, payment will be distributed in accordance with the Payee's will, if there is one, or state intestacy laws if there is no will.  See intestacy | Wex | US Law | LII / Legal Information Institute (cornell.edu)

2. If a Commutation Rider is in place when the Payee dies, any remaining certain payments and guaranteed lump sums are commuted to a lump sum in accordance with the terms of the commutation rider.

3. If the Payee dies after there are no remaining period certain payments or guaranteed lump sums then payments will cease at the Payee's death.  

Structured Settlement Beneficiary | Why It's Important (4structures.com) May 8, 2024 update

Structured Settlement Beneficiary Designations (4structures.com) May 24, 2021

B. "All payments from a structured settlement are guaranteed"

Commentary

All payments from a structured settlement are contractually guaranteed in accordance with the terms of the contract. 

When a structured settlement is established there are multiple contracts

• A settlement agreement and release which establishes an obligation to pay periodic payments as damages in exchange for a release of claims.
• A qualified assignment, which is a subsitution of obligors from a Defendant or his/her/its insurer(s) to a qualified assignment company
• An annuity contract, which is purchased as a "qualified funding asset" by the qualified assignment company and is owned by the qualified assignment company.

How Do Structured Settlements Work | Structured Settlements Explained (4structures.com)

While the terms "guaranteed" and "certain" are often used synonymously by those holding an insurance license, including some settlement planners and structured settlement brokers and even lawyers, such use is inaccurate and can lead to misinterpretation and/or misunderstanding by Payees.

 

Structured Settlement Industry On Track for $9B After Stellar First Half of 2024

by John Darer CLU ChFC MSSC CeFT RSP CLTC

Structured Settlement Industry production figures have been released and it's looking to be a record year, again!

• The total for June                         $   708   Million
• The total for 2^nd Q 2024                $2.220   Billion
• The total for 1^st Half of 2024         $4.485   Billion

Annuity.Org in Another "Financially Reviewed and Edited By" Structured Settlement Farce

by Structured Settlement Watchdog

They "Farce in Your General Direction"  

With all due respect to Monty Python, lead generators for the structured settlement factoring industry like Annuity.org have been spinning the "written by, edited by and financially reviewed by a CPA or MBA" farce for years. But these often wafted "prestige hooks" are easily discredited as I will show you now.

Annuity.org does not have a good grasp of Structured Settlement Basics as this diagram shows

Published on Annuity.org  11/10/2023 | Retrieved 7/5/2024

Annuity.org doesn't have a good grasp of the facts

Step 1  Claimant "Agrees to Settle and Releases  From Liability" Defendant

 

Step 2  Defendant Funds the Settlement and Assigns Liability to Assignment Company

Step 3  Assignment Company assumes the responsibility to make payments and Purchases an annuity from Insurance Company

Step 4   Insurance Company Makes Payment to Claimant

Annuity.org and the edited by reviewed by team sums it up

"While the arrangement may sound complicated, it is designed to take ‌damages and restitution full circle — back to the claimant". 

"Structured settlements are relatively simple" claims Terry Turner, the author. If that were the case, how could it get so foozled by Turner and Annuity.org quality control so badly?

Annuity.org, its writer, its editor and financial reviewer with an MBA completely miss THE MOST critical element in the establishment of a structured settlement, the release in exchange for a promise to make future periodic payments.

Please refer to the 4structures.com LLC Flow Chart below for the correct sequencing

Annuity.org Reposted and Repeated Its Own Previous Farce

Readers should know that Annuity.org has been spreading this nonsense since at least 2022, as I covered here  The Structured Settlement Process | Annuity.Org Cites 10 Sources and Still Gets It Wrong - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and John Darer Reviews (typepad.com) The chart in that case was a shade of blue, not coffee stain brown.

The above Annuity.org chart was wrong in 2022. The same Annuity.org chart was republished in 2023 and "edited" by Savannah Pittle and "financially reviewed" by Timothy Li MBA in a "farce regurge".  Who does the fact review at Annuity.org?

Annuity.org serves CBC Settlement Funding, a structured settlement factoring company based in Conshohocken PA. As I have diligently documented for its entire existence, the quality control at Annuity.org, as it relates to comprehension of structured settlements, is a farce.  Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and John Darer Reviews: Annuity.org | Sweeping Up Poor Annuity.org Research (typepad.com)

Part of my long standing mission in my strucured settlement watchdog capacity is to help structured settlement consumers have the clearest path to accurate information about structured settlements

The October 2023 Annuity.org Farce

Let's move onto an October 2023 Annuity.org chart (displayed below) which is even more deficient than the other Annuity.org regurge.

This is overly simplistic and just plain wrong. Did the MBA really review this crap?  

Once again, please refer to the 4structures.com LLC flow chart above for the proper sequencing and here How Do Structured Settlements Work | Structured Settlements Explained (4structures.com).

 

 

Structured Settlement Industry BEST Quarter EVER in Q1 2024 After Record 2023!

by John Darer CLU ChFC MSSC CeFT RSP CLTC

Has the "golden age of structured settlements" returned?   

• March 2024 premium production for the structured settlement industry was $774 MILLION!
• Q1 2024 industry production was $2.273 BILLION, a new quarterly record
• On top of the Structured Settlement Industry's $8.68B Record Year in 2023

What's Behind Structured Settlement Industry Growth?

John Darer reviews what he sees

1. One obvious reason is the return of interest rates post pandemic, beginning in 2022 which eventually eroded anti-selection bias.  Contrast when in April 2020, the 10 year United States Treasury yielded 0.40% to the Internal Rates of Return seen in recent times on 10 year structures that have exceeded 4.5% and at times have exceeded 5%. Bear in mind that because periodic payments from qualified structured settlements (personal physical injury, physical sickness, wrongful death and workers compensation are income tax free[IRC 104(a)(1) and IRC 104(a)(2)], the payment recipient is benefiting from a very competitive taxable equivalent yield. See Tax Advantages of Structured Settlements | Taxable Equivalent Yield Chart (4structures.com)
2. It is clear from multiple sources and surveys that decumulation risk is a major concern for Americans. In June 2023, Allianz claimed that Americans fear running out of money more than fear of death. Nobel laureate William Sharpe has called decumulation "the nastiest problem in Finance".  Humans in Financial Transition are who we deal with. Structured settlements are an important part of the conversation and the solution.
3. Years of declining interest rates encouraged producing structured settlement industry particpants (including settlement planners) to up their game and be better educated and skilled at what they do. 
4. Diversification of product offerings within the industry. Annuity issuers and other product providers have stepped up to the plate.
5. Industry workflow systems continue to improve operating efficiency.
6. Increased investment by product providers and brokers/planners in business development tools. MetLife has made the most visible marketing efforts to be seen everywhere
7. Increased investment in knowledge by industry participants leads to more fluency in approach and delivery of services to clients and prospects that leads to greater opportunities
8. Continued growth of flexible business models. 
9. To some extent, there are Pandemic era backlog cases continuing to work their way to resolution.
10. To some extent the severity levels of claims have increased.

Why Structured Settlements?  Because Certain Sells®

 

 

 

 

 

StructuredSettlements.com "Honor the Deceased" by Selling a Structured Settlement for Pennies?

by Structured Settlement Watchdog

CBC StructuredSettlements.com shills have stooped to a new low. Structuredsettlements.com, with a self-stated address corresponding to an Altamore Springs Florida UPS store 2156 mailbox*, suggests that you can "Honor a Legacy" by selling your future payments (for pennies on the dollar).

*478 E. Altamonte Drive Suite 108 Altamonte Springs, FL is a UPS Store.

They say "Loss and money on their own evoke strong feelings – and together can be explosive. But it doesn't have to be". 

Translation: You too can pay respect to the person you lost by short changing yourself for pennies on the dollar. It's ridiculous!

 

What is a Legacy?

1. an amount of money or property left to someone in a will:

   "my grandmother died and unexpectedly left me a small legacy"    (i.e. all about you)
2. the long-lasting impact of particular events, actions, etc. that took place in the past, or of a person’s life:

   "he left us a rich legacy of buildings that are both innovative architectural creations and genuine works of art" · "her legacy will live on for generations to come" · "the legacy of centuries of neglect"  Source: Oxford Languages

Instead of a Legacy, it's the type of stuff that CBC Settlement Funding shills say that might result in "Mama" reaching up out of the grave to whup your ass

"it can be something beautiful to actively pay respects to the person you lost. It could be a way to realize your dream of finishing college. Or it could be that you've always wanted to be your own boss. Or maybe you just want a home to call your own.

According to its  "What They Do" page Structuredsettlements.com "specializes in structured settlements and the laws that regulate them. In contrast to full-service financial providers, we concentrate on this one area so we are better able to serve the unique needs of people with structured settlements. In addition to settlement-specific information, we cover broader financial literacy topics as they relate to the benefits and risks of selling future payments, so you can feel confident in your decision. 

When you’re ready, they connect you with a trusted settlement purchaser, CBC Settlement Funding who will walk you through the more personal details of your transaction".

The response can be summed up in this meme.

Image © Wannapong Phobklang | Dreamstime.com

Meme © 4structures.com LLC

Structured settlement experts and settlement planners are better equipped to discuss these topics, not pennies on the dollar merchants.

Structured Settlements for You and For Those You Leave Behind (4structures.com)

Using Structured Settlements to Create a Loving Legacy (4structures.com)

Prudential and Pacific Life Again Named Among Most Ethical Companies in the World

by John Darer CLU ChFC MSSC CeFT RSP CLTC

Structured Settlement Annuity Issuers Keep Up Their Good Work

Congratulations to Prudential and Pacific Life who repeat as among the World's Most Ethical Companies of 2024, according to Ethisphere.

Pacific Life Home Office Newport Beach CA

 

Both Prudential and Pacific Life have been in business for over 100 years and are important players in the structured settlement annuity marketplace

Longevity, among other things, is important in an industry that addresses longevity risk and provides longevity income protection and stable income, addressing the thing that most Americans worry about the most.

A survey published by Allianz on May 31, 2023, found that 61% of Americans were more scared of running out of money than scared of dying.  Americans Facing a New Retirement Reality | Allianz Life

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

According to Ethisphere, "the  journey to the World’s Most Ethical Companies starts with a qualitative and quantitative assessment across five categories. This proprietary rating system, known as the Ethics Quotient® (EQ), is at the heart of the selection process for this prestigious honor. Featuring more than 240 multiple-choice and text questions, the EQ framework evaluates a company’s performance in an objective, consistent, and standardized way". Ethisphere has been  honoring the World's Most Ethical Companies for 18 years.

All applicants to the World’s Most Ethical Companies receive their overall EQ score and scores across the five categories as compared against the honorees. These insights – and access to the resources, guidance, and contextual expertise in The Sphere – offers tremendous value for improving ethics and compliance programs".

Weiss Ratings | John Darer Reviews What is a Weiss Rating?

 

by John Darer CLU ChFC MSSC CeFT RSP CLTC

Who is Weiss Ratings?  

Weiss Ratings has been in business since 1971, but when it comes to structured settlements, you tend to mainly see A.M. Best ratings and ratings from Moodys, Standard & Poors and Fitch (formerly Duff & Phelps). There are also other so-called Tier 1 ratings such as Kroll Bond Rating Agency, LLC ratings (KBRA) that are less commonly seen with structured settlement annuity issuing life insurance companies.

Weiss | First Insurance Rating Organization to issue Independent Financial Strength Ratings for Life and Health Insurance Companies

My first recollection of the elevation of Weiss Ratings  (formerly known as Weiss Research) was during a period of heavy criticism of the larger rating agencies during the Executive Life era. Martin Weiss, the company founder testified before Congress and the Senate in 1991 and 1992.

Weiss ratings became the first insurance rating organization to issue independent financial strength ratings for life and health insurance companies. 

The Wall Street Journal reported that the Weiss stock ratings ranked #1 in profit performance, ahead of ratings by Goldman Sachs, JPMorgan, Merrill Lynch, Morgan Stanley, Standard & Poor’s, and all other firms covered.

In 2004, a U.S. Government Accountability Office (GAO) found that the Weiss insurance company ratings beat those of Moody’s, Standard & Poor’s, and A.M. Best by at least three to one in accuracy.

Ratings are helpful and important but not exclusive factor in the insurance decision making process (which includes structured settlement annuities).

Helpful links

• Rating Agencies (naic.org)
• Master NAIC Designation and Category grid - 2020.xlsx. Note that Weiss Ratings is not on the NAIC grid. That doesn't mean you should exclude them as part of your evaluation and consideration of any insurance placement, including the placement of structured settlement annuities.

Why Is Weiss Ratings Not on the NAIC Grid?

I asked the NAIC for a response to this question on January 9, 2024 7:05pm,through their email portal

"Hi,

I am researching why Weiss Ratings is not on the NAIC grid?  It is my understanding that Weiss  does not charge for insurer ratings and claims to be non conflicted.

Thank you in advance for your response".

Here was the NAIC response received January 10, 2024:

"Only ratings from SEC recognized nationally recognized statistical ratings organizations (NRSRO) that have requested and been approved by the Valuation of Securities (E) Task Force to be a credit rating provider (CRP) to the NAIC are on the grid for translation to an NAIC Designation"

Insurance Companies - Weiss Ratings

 

 

 

 

 

Prudential Receives Favorable IRS PLRs for Index Linked Structured Settlement Annuity

by John Darer CLU ChFC MSSC CeFT RSP CLTC

One of the most positive structured settlement product developments of a record breaking 2023 was the introduction of Prudential Income Advantage, an index linked structured settlement annuity. 

Prudential Income Advantage | Structured Settlement Index Linked Annuity (4structures.com)

Prudential Income Advantage is the third index linked structured settlement annuity currently on the market, following offerings by Pacific Life in 2014 and Independent Life in 2020.  The Prudential Insurance Company of America, founded in 1875 and based in Newark New Jersey, is one is one of the oldest and largest life insurance companies insurance companies in America offers a fully domestic solution.

Increased Choices for Structured Settlement Consumers Regardless of Interest Rate Environment

This is great news for structured settlement  consumers and beneficiaries, which include personal injury victims, wrongful death survivors, personal injury attorneys seeking structured attorney fees. Allocating to an Index linked structured settlement offers growth potential, downside protection and tax benefits.

Prudential Index Linked Structured Settlement Annuity Supported by Two IRS Private Letter Rulings

Prudential sought and obtained favorable IRS Private Letter Rulings to support Prudential Income Advantage. The two PLRs were issued on October 30, 2023. Click on the links below to view the PLRs. 

1. PLR 109798-23 issued to Prudential's qualified assignment company

Download PLR_for_PASS_Corp_-_REDACTED_for_public_release_(00406537)[1]

What is a Qualified Assignment?

2. PLR 109799-23 

Download PLR_for_PICA_-_REDACTED_for_public_release_(00406257)[1]

Following is a link to the brochure for Prudential Income Advantage.

Download Prudential  Income Advantage Index Structured Settlement Annuity Brochure

 

 

 

 

 

Does the Structured Settlement Annuity Contract Transfer When You Deal With JG Wentworth or Lump Sum Funders?

by John Darer CLU ChFC MSSC CeFT RSP CLTC

Can you Sell a Structured Settlement Annuity Contract? 

Nope. However, a highly credentialed but mistaken settlement planner says you can, in a discussion of "the process of selling a structured settlement" found on their website at time of publication.

"Transferring the annuity contract: Once the court approves the sale, the annuity contract is transferred to the funding company, and the claimant receives their lump-sum payment" they say.

What is the Annuity Contract in a Structured Settlement?

The annuity contract in a structured settlement is a qualified funding asset as defined in the Internal Revenue Code Section 130(d).

Who Owns the Annuity Contract in a Structured Settlement?

The annuity contract in a structured settlement is typically owned as a qualified funding asset by a qualified assignment company. In certain cases, such as with claims settled under the Federal Tort Claims Act (FTCA), the structured settlement annuity is owned by the Defendant

What is a Qualified Assignment Company?

A qualified assignment company is a special purpose company that serves as the fulcrum of a structured settlement transaction. Please refer to the Step 2 and Step 3 in the structured settlement flow chart below. 

Structured settlement documentation makes clear that the payee has no rights of ownership in the qualified funding asset. 

But companies like JG Wentworth must be buying something if all these people have been scoring all that "cash now". What the heck are they buying?  The magic words are "structured settlement payment rights" or " structured settlement receivables". What do factoring companies sell to investors?

Think "Receivables Purchase Agreement" not " Buying an Annuity".

So if you're raising cash from your structured settlement you are selling receivables or structured settlement payment rights.

Fellow settlement planners and structured settlement consultants,  please be mindful of inaccuracies.