by John Darer
Virginia Dunn of Integrity Funding Sources, has "resurfaced" with all the fervor of a paraphrased Sam The Sham and the Pharoahs lyric:
I swear by the hair on my "Ginny" chin chin
I'm gonna find a way to get in
I'm gonna keep hangin' around
Till I huff and puff and blow the structure "house" down
Let's set aside the snafu in the title of the Portland Oregon based cash now pusher's post "Annuitys (sic) & Structured Settlements: The Controversy Of Selling Payments" which occurs throughout the post
Virginia M. Dunn: "Is it legal to sell your structured settlement or annuity payments? Your insurance company will tell you "NO". And yet people are selling them all the time. What is the real scoop here?"
Structured Settlement Watchdog: The majority of states have structured settlement protection acts which govern the process of selling structured settlement payment rights. The structured settlement protection acts were put in place to protect consumers, in part because prior to their enactment it was not uncommon to see discount rates charged by purchasers that were in the stratosphere. If an insurance company is telling you NO as Virginia Dunn alleges then perhaps the individual has not satisfied the requirements of the structured settlement protection act in their state, or the person being canvassed is ignorant. Despite Ms. Dunn's misleading allegations, most insurance companies hire law firms to make sure that any selling transaction of structured settlement payment rights complies with the structured settlement protection acts and applicable Federal law. If she finds fault with the law then the beef is with legislators not the insurance companies trying to comply with the law.
Virginia M. Dunn: "The annuities themselves represent a very large income stream for insurance companies. ...the fact that the settlement awards are structured provides a means for the insurance industry to secure huge tax breaks from the government. Here is their pitch: By structuring the payments of an injury award over time, the insurance company is providing long-term support for the injured party, thereby keeping them off of welfare. By keeping these people off of the roles of government subsidy, insurance companies are providing a valuable public service - hence, they should qualify for tax breaks.
Structured Settlement Watchdog:Structured settlements for payment of damages that qualify under IRC 104(a)(2) [physical injury or physical sickness and wrongful death] offer income tax free benefits. The tax subsidy also applies to workers compensation payments under IRC 104(a)(1)
Were there not a tax break under IRC 130, which creates an income tax exclusion for a company that takes on qualified assignments, purchases and owns qualified funding assets (such as annuities and United States Treasury obligations), subject to certain qualifications, victims of accidents, survivors of those killed in accidents or by the negligence of others would have fewer opportunities to structure.
Prior to the Periodic Payment Settlement Act of 1982, such instruments were held by the defendants and insurers of those defendants. These parties had no legal obligation to enter into structured settlement agreements, but if they did they were saddled with a contingent liability on their books. And, if the annuity company were to later go insolvent as was the case with Executive Life of California (and may yet be the case with Executive Life of New York) the Defendant or Insurer with these contingent liabilities ended up having to make up a shortfall.
Last on this point, the ability to do a qualified assignment benefits the plaintiff in that their financial future is not tied to the financial fortunes of the Defendant or its insurer as a general creditor. Most assignees permit the plaintiff or payee to be a secured party of the assignee. The Defendant wins too because they it/they get to write off the paid loss when the obligation transferred to the assignee.
The structured settlement watchdog does not mind educated criticism of structured settlements. In my opinion, the least someone like Ginny Dunn can do is do the research instead of reminding me of another paraphrase of a Sam the Sham and the Pharoahs classic... "Wooly Bullsh*t"
In conclusion it's worthy of note to observe the irony that Integrity Funding Sources uses the moniker IFS, to promote its cash now philosophy, while another unrelated company on the primary side of the market, also called IFS owns multiple structured settlement brokerages.