by Structured Settlement Watchdog
The Rhode Island Lawyers Weekly isn't going to make the legal media all-star team this quarter.
"Where a defendant insurance company agreed as part of structured settlement agreements to purchase annuities that would make periodic payments to the plaintiffs, the insurance company cannot be held liable for fraudulent misrepresentation based on the fact that the insurer deducted four percent commissions owed to the brokers who arranged the annuity transactions. A judgment dismissing …"
One needn't go past the snippet from the opening paragraph to realize that whoever wrote it for Rhode Island Lawyers Weekly (a) isn't dealing with a full deck of information (b) didn't take the time to understand the history of Ezell v Lexington insurance Company case and how a structured settlement transaction works, or (c) is intellectually dishonest and leaves the reader with false reality.
Consider these quotes from the Affirmation by the 1st Circuit in Ezell v Lexington insurance Company
1 "the four percent commission payment would have been paid by the life insurance companies that sold the annuities, and would have been accounted for as a standard element of the cost of doing business by the life insurance companies and reflected in the market prices that Lexington paid"
2. "the annuity companies' payment of brokers' commissions from out of the money Lexington paid for the annuities does not belie the facts that Lexington paid the amounts it quoted and that appellants received exactly those specific annuity payments the agreements had promised, payments that the appellants have not alleged that they failed to receive".
and the underscoring conclusory statements...
3. "Because there is no dispute that appellants did receive the periodic payment amounts they were promised in agreements containing no uncorrected misrepresentations, there is no allegation in the pleadings that appellants suffered the kind of harm necessary to make out a case of the statutory or common-law violations claimed".
4. "The basic problem with appellants' complaint is not that they failed to state some facts "with particularity." Fed. R. Civ. P. 9(b). Rather, it is that the facts they (Plaintiffs/ Appellants) have pleaded "with particularity" on the matters discussed here demonstrate the absence of any "circumstances constituting fraud.
- Lexington insurance Company did not deduct a 4% commission.
- Commissions are paid by the life insurance companies (Lexington is not a life insurer) issuing structured settlement annuities to licensed agents.
- Rebating of commissions is unlawful under the insurance laws of most states. A 2007 opinion letter from the Office of General Counsel of the new York Insurance Department (now Department of Financial Services) even opined that it was unlawful for licensed insurance agents to advertise contributions to an association of trial lawyers.
- The largest representative case in the Ezell matter involved annuity issuers that were not even related to Lexington and the representative plaintiff Erica Biddings, expressly chose annuity issuers not related to Lexington insurance Company or AIG.
- All the representative plaintiffs were represented in the structured settlement transactions by notable, experienced law firms like Beasley Allen and Krupnick Campbell, which firms had extensive prior history handling settlements that included structured settlements for their clients. I am aware of multiple structured settlement firms that have done plaintiff work for Beasley Allen lawyers. A Beasley Allen lawyer spoke at an October 2018 meeting of the National Structured Settlements Trade Association and another appeared on a podcast produced by a structured settlement brokerage firm.
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