by John Darer CLU ChFC MSSC CeFT RSP CLTC
Kansas is fixing to be the next state to adopt the 2017 Revisions to the Life & Health Guaranty Associations Model Act (#520), which would make it the 41st state to adopt the Model Act
Kansas HB 2810 contains an express exclusion that makes clear, if passed, that investors in structured settlement receivables HAVE NO SAFETY NET in the event of insolvency of the annuity issuer.
Here is the relevant excerpt:
This act shall not provide coverage to a person who:
6 (A) Is a payee or beneficiary of a contract holder resident of this state,
7 if the payee or beneficiary is afforded any coverage by the association of
8 another state; or
9 (B) acquires rights to receive payments though a structured
10 settlement factoring transaction as defined in 26 U.S.C. 5891(c)(3)(A),
11 regardless of whether the transaction occurred before or after such section
12 became effective.
Investors could lose all or part of their investments and it doesn't matter when you acquired the receivables, you're screwed if there is an insolvency and a liquidation.
Structured Settlement Receivables ARE NOT Structured Settlement Annuities
Structured settlement annuities cannot be sold by payees. Only the structured settlement payment rights can be sold/transferred. That fact is dawning on an increasing number of investors and the financial advisors that placed them into such investments. Let's hope there are no insolvencies or other transactional risks that surface.
Trustees and Others' Fiduciary Duty With Structured Settlement Receivable Investments
Trustees of trusts for Kansas injury victims and fiduciary financial advisors also need to be vigilant of the looming development and keep clients proper;y informed. It is reasonably foreseeable that the trend of exclusion of investors in acquired structured settlement payment rights will continue to expand.
Chances are that the financial advisor or settlement planner who sold you and.or helped facilitate the the investment likely has no insurance coverage for placing you in such investments. It was a reasonably forseeable risk.
Kansas HB 2810 was introduced February 20, 2024. 40 states have adopted the 2017 revisions.
Other John Darer Reviews About Structured Settlement Receivables
Structured Settlement Receivables | What Financial Professional Liability Insurers Need to Know - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and John Darer Reviews (typepad.com) February 18, 2024