North Carolina Insurance Law | NC §58-62-86 “Prohibited advertisement of Article in insurance sales

Is there a nice way to criticize a competitor who appears to be continually violating the Advertising Prohibition statute under North Carolina Insurance Law, and is also inaccurate?

First    The Law

North Carolina §58-62-86 “Prohibited advertisement of Article in insurance sales; notice to policyholders” (a) No person shall make, publish, disseminate, circulate, or place before the public, or cause directly or indirectly to be made, published, disseminated, circulated, or placed before the public, in any newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio station or television station, or in any other way, any oral or written advertisement, announcement, or statement that uses the existence of the Association or this Article for the purpose of sale or solicitation of or inducement to purchase any kind of insurance covered by this Article. However, this subsection does not apply to the Association or any other person who does not sell or solicit insurance.

Second  The Advertisement

 

by Douglas Bryan Milner of Millennium Settlements Consulting published on his website (1/26/2011 11:00AM EST):

 

"Q: Are Structured settlements "insured" or guaranteed by someone other than the company issuing them? 

A: All states have a Guaranty Association Act.  The Act states that in the event that a member insurer, who is licensed to sell annuities in that particular state, is ordered to be liquidated by a court, the Guaranty Association Act enables the State Guaranty Association to provide protection up to a certain amount for its residents who are holders of annuity policies with the solvent insurer.   For example in North Carolina, the State Guaranty limit is $300,000". 

AND

Q:  Is it possible to "split" annuities among different companies to spread risk?  Would that also help to keep the annuity amount "under" the maximum coverage provided by the NC Guaranty Fund? 

A: Yes, it is possible to "split" the settlement amount into different life companies for the structured settlement in order to stay under the $300,000 limit for the North Carolina Guaranty Association Act. 

Question:  Is there a better example of an agent licensed by the North Carolina Department of Insurance who "uses the existence of the Association or this Article for the purpose of sale or solicitation of or inducement to purchase any kind of insurance covered by this Article"?

In addition to being on Milner's website, Milner's article was previously placed into the public domain on the NC Trial Lawyers Blog (Nichols Law Firm), in September 2008.

June 25, 2010  He's Still Tallking About Guarantry Associations But Is It Kosher Or Accurate

August 30, 2009 North Carolina Lawyers Weekly reported, on August 17, 2009, that on August 7, 2009 North Carolina governor Bev Perdue signed legislation that will add an extra layer of security to those receiving payments from structured settlement annuities. How we reported it.

One wonders how the IFS Corporation, which owns Millennium Settlements, and whose logo is used (presumably with permission) as part of Milner's website, has permitted this apparent violation to continue?

Third   "The Attention to Detail"

1. Would structured settlement protection be needed in the event of solvency, or insolvency?
2. Has Bryan Milner kept up to date with ALL bulletins issued by The North Carolina Department of Insurance on this subject?  Has Bryan Milner forgotten about his "spare tire"  (see August 17, 2009 NC Lawyer Weekly)? Another page of Milner's website shows it being updated as recently as January 3, 2011.
3. In addition, when discussion structured settlement protections, Milner states, "each life company that offers structured settlement annuities provides a guarantee from their holding assignment company that the scheduled payments will be made to the claimant.  A document with the details of the guarantee are included in each structured settlement annuity policy".  
   

        The statement is inaccurate.  On qualified assignment cases, the guarantee is never from the assignment company. Any guarantee, if one is issued, is from either (1) the annuity issuer, as is the case with Metropolitan Life, New York Life, Allstate Life Insurance Company, The Prudential Insurance Company of America John Hancock Life Insurance Company (USA) and Liberty Life Assurance Company of Boston; (2) The upstream holding company, as is the case with structured annuities issued by American General Life Insurance Company and Pacific Life and Annuity; (3) a related or parent company, as is the case with structured annuities issued by John Hancock Life Insurance Company of New York, Allstate Life Insurance Company of New York. On LIberty Life cases its parent Liberty Mutual provides an additional guaranty from its parent Liberty Mutual (but of the life insurance company's (not the assignee's) performance). .