by John Darer® CLU ChFC MSSC RSP CLTC
Are you an investor, or potential investor in structured settlement payment rights* and a resident of the State of Connecticut? Did the person or company or sold you (or the person or company who is attempting to sell you) structured settlement payment rights state or imply that guaranty association protection applied to you?
We believe there are such salespeople. Whether or not such claims are true or false, please note that on the cover of a publication"The Consumer's Safety Net" published by the Insurance Guaranty Associations of Connecticut it reads:
Note: It is a prohibited unfair trade practice and a violation of state law** for any person to make use in any manner of the existence, except for the distribution of any publication approved by the commissioner and describing the general purposes and current limitations of the insurance guaranty association acts, such as this brochure. Connecticut General Statutes, Sections 38a-852 and 38a-871(e) (emphasis added)
It is worth noting that the Connecticut statutes apply to ANY person not just Connecicut licensed insurance agents.
A purchase of structured settlement payment rights may make good financial sense for a person or entity who seeks stable income. The transaction however is complex and is not for everyone. It is not for yield chasers who don't want to take time to understand what they're getting into. The limited regulation (in some states lack of regulation) of marketing and solicitation practices could lead to purchasers being given an incomplete picture of the risks. Pay attention to what is happening with the liquidation of Executive Life Insurance Company of New York. It may be the poster child for investors in structured settlement payment rights, particularly just what standing those rights have in insolvency.
* for the purpose of this article please note that I am referring to rights acquired in the secondary market, not rights acquired as the result of your being a party to a settlement of a lawsuit.
** similar advertising prohibitions apply under the laws of other states