"How many structured settlements have you been involved with in the past 10 years in which the annuity was funded through the life insurance company affiliate of the casualty insurer? Is it likely that the affiliate life market of the casualty insurer provided your clients the highest benefits for the claim dollars being spent? The answer is an unfortunate -NO! An even harder answer to swallow is Probably not by a long shot".
To boil this rhetoric down , it is necessary to independently shop the market, but it is possible that the affiliate life company IS giving the best deal. Like anything else shopping around improves your bargaining position.
"A number of attorneys have been successfully sued by their clients when the claimant realized a sizeable (sic) benefit stream could have been acquired if another, more competitive life insurance company had been utilized".
The creator of the sales piece doesn't cite any specific cases, but the statement is simply not in line with the facts of two widely cited cases by settlement professionals. Successfully sued suggests that these cases were tried to a verdict, which in the case of Grillo v Pettiete et al Cause 96-145090-92 and Grillo v Henry Cause 96-167943-96 96th Dist, Ct Tarrant County, TX, simply wasn't true. The cases were settled. The Grillo cases against the attorneys and the guardian ad litem centered upon not doing a structured settlement and not preserving the public benefits that the plaintiff was entitled to.
The matter of Lyons v MMIA 730 N.Y.S. 2d 345 centered on the issue of privity and New York's Appelate Division for the second department overturned a lower court ruling that said defendants do not owe a duty of privity to the plaintiffs In a matter that involved numerical manipulations of present value). It is this author's understanding that the attorneys were sued, for among other things failing to realize that the numbers proferred to them were future value, not present value, resulting in excessive attorney fees. This author also understands that the matter was settled. Furthermore such practice is virtually impossible in 2009 because of the disclosure requirements set forth in New York General Obligations Law Section 5-1702.
Neither of these cases support the claim of the marketing memo creator that the lawyers "were successfully sued "when the claimant realized a sizeable(sic) benefit stream could have been
acquired if another, more competitive life insurance company had been
utilized". This author challenges the creator of the aforementioned claim to come up with a case that supports the claim being made.
Cites a March 2003 Internal Memo (from AIG) that stated " unless compelled by the plaintiff or plaintiff's broker to illustrate competitiveness, the broker need not canvas the Approved list of life companies for the best quote. If compelled , the broker must canvas the Approved List for the best available rates. The broker, however, must give (our life market) the last right of refusal"
The following questions underscore the pernicious manner in which the Marketing claim has been made.
- Is the same person CEO of AIG as was in March 2003? No
- Is the person running the structured settlement department the same as in March 2003? No
- How many CEO's has AIG had since March 2003? 4 (Greenberg, Sullivan, Liddy, Benmosche)
- Is AIG the same company as it was in March 2003? No
- Is the name of AIG's property and casualty company the same it was in March 2003? No, the name was changed to Chartis in July 2009.
The continued use of the March 2003 internal memo by any structured settlement professional or settlement planner is disingenuous in the context that the creator of the marketing claim is likely aware of the majority of the above facts and is aware of the events that took place in September 2008 and the sequelae. A call to Ismael Acevedo who runs the Chartis structured settlement operation would dispel the marketing claim being made with relation to the March 2003 memo. This author is aware that a the time of writing the author of that marketing piece had not contacted Mr. Acevedo.
"(Name of Firm) exclusively represents plaintiffs and their attorneys".
This author has knowledge that among the firm's "42 offices nationwide" there IS defense source business being written. Even one piece of business written torches the absolute marketing statement. I keep warning people about making unsupportable absolute statements in marketing. There is nothing wrong with writing business via such source. In that regard however, given that the firm in question has apparently distributed copies of the marketing piece to more than one trial lawyer, it stands, without further qualification of the marketing claim (for example that a specific office or specific individuals are exclusive) that the firm is engaging in advertising that is grossly false and misleading. How shocking!
"If (Name of Firm) is involved you will be covered under our $10,000,000 Errors and Omissions Policy"
- This author has reason to believe that the policy in question is a single limit policy insuring 42 offices and the claims they may have.
- If the creator of the marketing piece really had the conviction that AIG was so bad, why on principle did the company insure (for the 2003-2004 and 2004-2005 policy years) the cited E&O policy for with an AIG subsidiary? It's certainly worth noting that the frequently cited March 2003 memo would have been fresh in mind in when the insurance was placed in in 2003.
- An insurance policy covers its named insureds and coverage is subject to the policy terms and the interpretation thereof.
- The statement about coverage is outrageous because it makes the intentional or unintentional misrepresentation that an entirely new class of insureds (plaintiffs and plaintiffs attorneys) is covered by the policy by virtue of simply doing business with this firm.
- Can the insured unilaterally enlarge a class of insureds under its policy?
- What acts of the plaintiff attorney would the plaintiff attorney be covered as an insured under this structured settlement firm's policy. Again we are dealing with a snappy sounding marketing throwaway that could have severe consequences!
- What possible exposure does a firm have if it makes such a misrepresentation to induce a plaintiff or law firm to do business ?
- Wouldn't that bring a whole new pricing structure for the E&O policy if it were true? I mean we're talking 42 offices and all the clients of those 42 offices implied by the marketing statement.
I have no doubt that a dog loving old friend will be upset with me for writing this post, but the fact that your marketing piece is all over the frickin' country now leaves me no alternative but to inflict a "bite".
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