by John Darer CLU ChFC CSSC RSP CLTC
Life Health Pro, an insurance industry trade journal has done an outstanding job of contradicting itself by publishing Eddie Stone's missive about structured settlements, on which reside the latent "fingerprints" of an individual who, until very recently, for nearly 2 decades promoted structured settlements on behalf of NSSTA and was paid by NSSTA.
The "stoning" of structured settlements is a misdirection. Structured settlements were not the problem with ELNY and they are not the problem. To generalize that structured settlements were the problem is not telling the whole story.
To the chagrin of some, I often qualify my ELNY related posts with the statement that I never placed any life insurance or structured settlement annuities with Executive Life or ELNY. I make no apologies for stating such facts. Out of belief in structured settlements and the insurance industry, respect and empathy for the victims (a few of whom I have spoken to) , and respect for those life insurance companies who wrote structured settlements during and beyond the ELNY era, who have consistently met their contractual obligations and still paying people, I have made it my business to get out in front of the ELNY story, to research, learn and share as much as I could about contemporaenous information of the time, even if at times, it meant paddling against the current. In addition to the below linked blog archives, I participated in 4 podcasts about the ELNY story in 2011-2013 which aired on Legal Broadcast Network. In August 2014 I appeared in an NBC news expose featuring investigative reporter Tom Llamas, now an anchor for ABC news.
Victims of Bad Advice But Culpability All Around
As I have repeatedly stated, in my opinion, some ELNY victims were victims of bad advice. Based on my extensive research (chronicled here) and personal knowledge , there is a limited number of reasons why a person would have all their eggs in one basket. The bad advice came from lawyers, financial advisers, structured settlement brokers who advised plaintiffs. It would be fair to say that there is culpability all around. ALL around!
One could even argue in some cases that the plaintiffs and the attorneys who represented them in settlement negotiations had the opportunity to say no to an all ELNY offer and didn't. For those who were minors at the time the ELNY structures were set up, it's the tough reality that perhaps their parents or guardians made a bad decision agree to their child's entire future be placed with one counterparty.
The fact is that settlements are negotiated compromises. Plaintiffs have a release for sale. They set the price and the "hondlers" from the defendant or insurance company make an offer. Although the process is more organized than Sunday afternoon in Tijuana, the principle is the same.
Life Health Pro's Latest Post Contradicts its "Complete ELNY Saga" Using Its Meaningless Misdirection
According to Life HealthPro itself in their Complete ELNY Saga published in 2012...
"For more than two decades, the Executive Life Insurance Company of New York (ELNY) has been bled for billions of dollars while languishing in a state-imposed purgatory. Soon, due to years of mismanagement by the very institution charged with saving it, ELNY will begin denying hundreds of innocent victims the compensatory payments they depend upon to survive. ELNY entered rehabilitation in 1991 as a solvent insurance company incorrectly treated as if it were insolvent: It fell under the aegis of the New York Liquidation Bureau—a rogue agency known for its codes of secrecy and characterized by many who spoke for this story as ineffective and mismanaged at best, and a snake pit of corruption at worst".
ELNY Victim focus in 2012 was on New York Superintendent of Insurance and the Firms Hired to Manage the Assets of the ELNY Estate
In my December 1, 2012 post 'On Executive Life of New York | Touching on a Touchy Subject, I reported on a lengthy comment made by an ELNY victim that appeared on an S2KM/Patrick Hindert blog post of November 28, 2012, placing the blame on the New York Superintendent of Insurance. To wit...
"Why should we blame our original attorneys? Back in the day these were backed up and backed up, they thought there were doing right by us. The blame goes to the Superintendant for hiring firms that had no idea how to do the job they were paid for, by squandering monies that belonged to us. I could once again, go on and on, but why? No one wants to hear how we are affected by this loss" (emphasis added)
In 2012 Eddie Stone Blamed The New York Liquidation Bureau But Was Slammed With Contempt to Block His Efforts
In fact, Greenwich attorney Eddie Stone, the purported author of the most recent Life Health Pro missive filed a class action against " the very institution charged with saving it" until he was charged with contempt with respect to the ELNY liquidation proceedings. Subsequently the suit was dismissed without prejudice and which suit could eventually be re-filed if the contempt order is successfully challenged.
The Class Action Against Ringler Associaties and Paul Hoffman
The latest missive posted October 29, 2014, hovers over a class action lawsuit pending in federal court in Oregon filed against Ringler Associates and Paul Hoffman, a former President of Ringler who executed certain ELNY annuity applications back in 1985 or 1986. The missive is the 3rd in one week which brings up the subject of "massive undisclosed commissions" as if such disclosure if made would have made any difference due to strict statutory anti-rebating laws that have been on the books at all relevant times. It's a red herring. I'm not defending Paul Hoffman, but from an academic standpoint, if Paul Hoffman told Reggie Kelly he was making $40,000 commission, he would not legally be able to share that commission with Reggie Kelly. In fact, if Reggie Kelly had another adviser who possessed a active insurance license and received a commission on such annuity placement, that agent or broker would not be able to legally rebate. I'm not saying that commissions should not be disclosed, whether voluntarily or by statute, I'm saying it would have made no difference.
The "foot" attempting to "bust open the door" on the statute of limitations, aims at the sale or placement of insurance products that were not licensed to be sold in the states where Reggie Kelly and Marie Westrope resided.
The 'Massive Tax Break' Saber Rattle Fails
In fact. according to the tax expenditure estimate prepared by the Joint Committee on Taxation, in regards to Internal Revenue Code Section 130 , it is a de minimis tax expenditure. It states that the “estimated revenue losses for fiscal years 2014 through 2018 are below the de minimis amount ($50 million).” See for yourself, the report was published August 6, 2014. Download Estimate_of_Federal_Expenditures_2014_to_2018_pub_08_06_2014 (1)
The Truth About The Structured Settlements Industry
Contrary to the implications of the Life Health Pro missive, the structured settlement industry is not full of a bunch of cold heartless bastards. There are alot of outstanding professionals in the industry who devote hours and dollars to challenging themselves academically and to making things better for those they serve, including injury victims.The National Structured Settlements Trade Association is dedicated to the American Association of Persons With Disabilies (AAPD) as are many of its members.
Structured settlements offer significant benefits to injured plaintiffs and their families. The benefits of structured settlements have long been recognized by Congress and leading disability advocates.