Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary

Liberty Life Assurance of Boston Strengthens Guarantee of Qualified Assignment Company

by John Darer® CLU ChFC MSSC RSP CLTC

Liberty Life Assurance Company of Boston, a subsidiary of Liberty Mutual Insurance Company has made a significant improvement to its structured settlement annuity offering.

Effective November 1, 2010 qualified structured settlements assigned to Liberty Assignment Corporation will carry the guarantee of Liberty Life Assurance Company of Boston. A company spokesperson said that the new guarantee is in addition to the existing Liberty Mutual guarantee of Liberty Life Assurance Company of Boston.

The new guarantee is a welcome addition and fills the void left when Liberty Mutual stopped issuing surety bonds to back up the qualified assignee on new structured settlements several years ago. Since then, (up until November 1, 2010)  the only guarantee in place was the unusual and unique guarantee by parent Liberty Mutual Insurance Company of the annuity issuer (as opposed to the assignee). 

How structured settlements work is illustrated in the flow chart set forth below and gives the reader a better visual of how the two guarantees fit into the picture. The guarantees are also summarized below

Summary of Liberty Mutual Structured Settlements Guarantees 

• Guarantee of performance of qualified assignee, Liberty Assignment Corporation, by Liberty Life Assurance Company of Boston.  Download LibertyLifeAssuranceBostonGuaranteeAssignment
• Guarantee of performance of Liberty Life Assurance Company of Boston by Liberty Mutual Insurance Company, a Fortune 100 company.  Download LibertyMutualCorporateGuaranteeLibertyLifeBoston.
  

Is An Improvement to Non Qualified Assignment Program Coming?

Liberty Life is encouraged to develop a similar guarantee for its non qualified assignee,  BARCO Assignments, Ltd. How about it Liberty?

 

 

 

 

 

J.G. Wentworth "Maine Lines" Structured Settlement Payments From Woman of Diminshed Capacity. Where Was The Judge?

by Structured Settlement Watchdog®

An April 29, 2010 complaint against JG Wentworth posted on complaintsboard.com, a South Addison Maine woman describes the horror show that a woman with closed head injury allegedly suffered at the hands of JG Wentworth in a chilling warning to state and federal governmental regulators.

According to the complaint "Kathryn survived a head on car accident with a drunk driver, Kate's head injuries were severe. After a lot of thought and planning, a structured settlement was set up for Kathryn to have a lifetime income starting in May 1987. Kate has been receiving payments monthly for income. We have just discovered that JG Wentworth convinced Kate in August 1996 to take part of her settlement out of Liberty Mutual. This decision has reduced her income leaving her only able to afford a studio apartment, no transportation and with very little spending money. JG Wentworth with its exorbitant interest rates. has received $416,000.00 from her repayments.for the $152,300.00 which Kate took out of her life income.

Due to her physical and mental diminishment (sic) caused by a head injury in the car accident in 1980( in which her mother was killed, ) Kate is not competent to reorganize the carefully thought out dispensation from Liberty Mutual. She is in no way competent to make major decisions regarding the dispensation of that money.

She was a victim and led astray. Kate does not have employment and she may never be employed because of her deficiencies. We want her to feel capable and responsible. That is the way we want her to feel, but she is not able to be responsible for making any life changing decisions such as the contract that JG Wentworth made with her. She told us that JG Wentworth called her once or twice a day to entice her to withdraw in lump sums, her lifetime income. She was coerced give in and agree to take the money. All to late, we now have heard that those repeated phone calls began each time that a contract with JG Wentworth was completed. They convinced her to take out another loan, at least three or more times...She will not be out from under JG Wentworth until 2013".

Comments/Questions

1. The first transaction was prior to the enactment of the Maine Structured Settlement Protection Act 24-A M.R.S. §§ 2241 et seq. (SB 680) Enacted 5/20/1999 Effective 6/1/1999.
2. If there was a judge reviewing subsequent transaction, (at least for the factoring transactions after June 1, 1999) what was he or she thinking in approving the transfer?
3. What level of due diligence did J.G Wentworth perform PRIOR to starting the process to provide the liquidity? 
4. What, if anything. is their legal obligation to do so?
5. What standards do J.G. Wentworth (and other settlement purchasers)  follow when dealing with potential customers with impaired decision making ability?
6. If you see a J.G. Wentworth ad on TV, by all means have a good laugh BUT try to heed the words in this Guns N Roses refrain...

"Said woman take it slow
It'll work itself out fine
All we need is just a little patience
Said sugar make it slow
And we'll come together fine
All we need is just a little patience
(inhale) Patience...
Ooh, oh, yeah" 

While today, structured settlement factoring transaction require judicial approval you must remember that once you finalize one of these deals there's really no way to turn back.

J.G. Wentworth is invited to comment.

Post script: No comment from JG Wentworth

 

Liberty Life Assurance Company of Boston Affirmed at "A" by A.M. Best

by John Darer CLU ChFC CSSC RSP

Liberty Life Assurance Company of Boston has been affirmed at an A (Excellent) Rating by A.M. Best along with the rest of the Liberty Mutual Group of insurance companies. The affirmation was announced in an A.M.Best press release dated June 11, 2010.

Liberty Life Assurance Company of Boston is an issuer of structured settlement annuities used in the resolution of personal injury lawsuits, wrongful death law suits and workers compensation claims. In addition, through its appointed brokers and Barco Assignments, Ltd. facility, the company provides funding instruments for use with non qualified assignments, used to fund innovative periodic payment solutions to many other types of legal disputes and structured attorney fees.

Weiss Ratings of Structured Settlement Annuity Companies

by John Darer CLU ChFC CSSC RSP

With all the brouhaha about rating agencies being paid to rate it should be noted that Weiss Research DOES NOT charge a fee to the companies being rated, to be rated.

Latest Ratings:

A-

John Hancock Life Insurance Company of New York

New York Life Insurance Company

New York Life Insurance and Annuity Corporation (the qualified assignee of New York Life structured settlements)

Pacific Life and Annuity Company

B+

Allstate Life Insurance Company

B

Allstate Life Insurance Company of New York

John Hancock Life insurance Company (U.S.A.)

Symetra Life Insurance Company

B-

Metropolitan Life Insurance Comapny

Liberty Life Assurance Company of Boston

C+

American General Life Insurance Company

American International Life Assurance Company of New York

The Prudential Insurance Company of America

  

 

 

Structured Settlement Services | Tulsa website's inaccurate Dick Risk "Retread"

by Structured Settlement Watchdog®

The structured settlement watchdog calls out not just one but two members of the Risk family in this post for lack of attention to detail.

From 2000-2006 Oklahoma attorney Richard B. Risk, Jr. (Dick Risk) was a prolific writer on the subject of structured settlements. Until he became an attorney Dick Risk was a producer of structured settlements and principal in Structured Settlement Services when the mantle was passed over to his son Robert Risk.

What appears to be a 2001 article written by Risk is posted on the Structured settlement Services, LLC website, without citation, as "Structure Concept Being Reinvented". It is also on the website for the Risk Law Firm. That a 2001 article is being used in the present tense should not shock anyone. The structured settlement watchdog has already shown an appetite for nipping at the heels of certain structured settlement industry who state old behaviors a current fact.

Given that Structured Settlement Services, LLC contains the notation copyright 2007-2009. are we supposed to laugh, cry or pity them for what is misinformation?

Excerpt 1 "First Colony was followed by Berkshire Hathaway Life, Commercial Union (now CGU) Life, Monumental Life, American General Life and Allstate Life (although, possibly not in that order). Berkshire is no longer in the structured settlement marketplace".

Comment: How thoughtful to let their clients and readers know about Berkshire Hathaway and that Commercial Union is "now CGU".  But three of the other companies mentioned are no longer writing structured settlement annuities and haven't for many years.  And CGU became CGNU and Aviva before exiting the structured settlement business.

Excerpt 2  In disseminating information about Barco Assignments, Ltd the location of the company is incorrectly stated as Bridgetown Barbados when it is Belleville Barbados. All that Risk would have had to do is visit the Liberty Mutual structured settlements site to confirm.

Excerpt 3  Risk states that "the performance of BARCO and Liberty Life is guaranteed by a surety bond issued by Liberty Mutual Insurance Company", when such statement is neither currently true nor has it been true for many years!

Over on the Risk Law Firm website while the same incorrect information is displayed,  it is at least acknowledged that they might not be current or correct. A June 2008 Private Letter Ruling is added as a footnote to the piece. One wonders why Dick Risk simply didn't verify with Robert Risk the current markets.

Websites ARE NOT Ronco Showtime Rotisseries! You cannot set it and forget it!

Where has Attention to Detail Gone?  (to the tune of folk song "Where Have all the Flowers Gone")

 Where has Attention to Detail Gone?

Long Time Passing

Where has Attention to Detail Gone?

Financial Lit. Anyone?

Where has Attention to Detail Gone?

Get with the program everyone!

Oh When will they ever learn?

Oh When will they ever learn?

How Structured Settlements Work | Structured Settlement Guarantees

by John Darer® CLU ChFC MSSC RSP CLTC

What is a structured settlement guarantee? This important question has an answer that should be part of the fundamental body of knowledge possessed by any qualified structured settlement consultant  that a lawyer, plaintiff, defendant, or insurer, chooses to engage. I continue to be disappointed when I see settlement consultants spreading inaccurate information to the public. Lawyers who then promote such inaccurate information simply foment financial illiteracy. That's not good.

Christopher R. Nicholls' NC Trial Lawyer Blog posted a piece by a North Carolina licensed  insurance agent on or about September 16, 2008. It still appeared at the time of posting. This author acknowledges that while the spirit of the piece was pure, the inaccuracies bring its continued posting by both the NC Trial Lawyer Blog and the NC licensed insurance agent.

Here's an excerpt, followed by my comments on the inaccuracy:

"Q:  If the life insurance company holding my annuity fails, what happens to my structured settlement?   

A:  The insurance companies are subject to regulations that require them to have assets set aside and earmarked solely for the purpose of meeting their obligations to policyholders .  Even in bankruptcy, these funds are not touchable, and would still be there for the purpose of honoring their commitments.   In addition, 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. "

Comments

If there is a structured settlement the life insurance company is not "holding" the annuity, nor is the assignment company its holding company. If your structured settlement involved a "qualified assignment"  and is funded with an annuity, THEN the annuity is "held" or "owned" by the qualified assignment company. If your structured settlement did not involve a "qualified assignment" THEN it is owned by the defendant or the defendant's insurer. Click for details of how structured settlement work, including a structured settlement flow chart/diagram

When there is a qualified assignment the defendant or its insurer's obligation to make periodic payments to you or your client is transferred to the qualified assignment company. This is done with your consent and knowledge and should be reflected in the settlement documents It's important to note that with a few exceptions the qualified assignment company is a special purpose entity that only holds annuities funding the periodic payment obligations it has assumed. Thus the putative value of a putative "guarantee" from the "holding assignment company" is worthless.

In the case of New York Life Insurance Company structured settlements the qualified assignment company is an actual insurance company. It is the only one. Its assumed obligations under qualified assignments are further guaranteed by the annuity issuer, New York Life Insurance Company.

Most structured settlement annuity issuers guarantee the performance of the qualified assignment company by the annuity issuer.  Others offer guarantees from another member of a family of insurance companies or a guarantee from an upstream holding company. At the time of posting, all but four of the currently writing annuity issuers of structured settlements have a guarantee of the qualified assignment company by the annuity issuer.

1. The assumed obligations of American General Life's qualified assignment company are guaranteed by AGC Life Insurance Company, an upstream holding company
2. The assumed obligations of Pacific life and Annuity Company's qualified assignment company are guaranteed by Pacific Lifecorp, an upstream holding company
3. The assumed obligations of Allstate Life Insurance Company of New York's qualified assignment company are guaranteed by Allstate Life Insurance Company
4. The assumed obligations of American International Life Assurance Company of New York's qualified assignment company have no guarantee.
5. The assumed obligations of Liberty Life Assurance Company of Boston are not guaranteed by its qualified assignment company, Liberty Assignment Corporation. Liberty Mutual Insurance Company, not the qualified assignment company, guarantees that payments will be made by the annuity issuer

The same postings include a discussion about state guaranty funds. There is a strict prohibition against insurance agents using the existence of state guaranty funds in any solicitation for insurance, including structured settlements which, when funded with an annuity, are a form of insurance.

Finally,  insurance companies in general, MAY NOT file for bankruptcy. 11 U.S.C. § 109  governs which entities are permitted to file a bankruptcy petition.  Special state and federal laws govern the liquidation or reorganization of domestic American insurers. In a U.S.context, it is inaccurate to refer to an insurer as being "bankrupt". The terms "insolvent", "in liquidation", or "in receivership" would be appropriate under some circumstances.

 

Liberty Life Offers Program to Ease Structured Settlement Rated Age Underwiting Back Log

In April 2009  Liberty Life Assurance Company of Boston introduced its Concierge Underwriting Program. This new program allows for underwriting on any case that you submit for a rated age, regardless of carrier.

To qualify for Concierge Underwriting, a broker must place $500,000 in non-Liberty Mutual Group premium with Liberty Life per quarter, and Liberty Life Assurance Company of Boston will underwrite any case that you submit for rated age throughout the following quarter. 

Liberty Life Assurance Company of Boston is a members of Liberty Mutual Group. Structured settlement annuities placed with Liberty Life Assurance Company of Boston are guaranteed by Liberty Mutual Insurance Company.