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If You See a Qualified Assignment and Release Like This, Seek a Second Opinion

by Structured Settlement Watchdog

A Qualified Assignment and Release which includes the following, raises more questions than answers. If you see one it probably deserves a second opinion.

QUALIFIED ASSIGNMENT AND RELEASE

Defined Terms

Assignor:___________________ Qualified Settlement Fund,  ( QSF may be adminstered by company related to settlement planner)

Assignee: Qualified Assignment Company related to the settlement planner.

Qualified Funding Asset:  Annuity

Issuer of Qualified Funding Asset :  Metropolitan Life Insurance Company

12. In exchange for "legal payment rights" pursuant to 5891 of the IRC, to the Periodic Payments specified in Paragraph 15. Claimant hereby releases and discharges the defendants and/or respondents with regard to the Periodic Payments, and agrees to only look to  (name of Assignment Company owned by settlement planner firm holding company)

_____________________________________________________________________

SIDE BAR (sponsored by "What's Your Vector Victor?")

Why is the Clamaint releasing and discharging "Defendants and/or Respondents" in the settlement planner's Qualified Assignment and Release document from a QSF?  Wouldn't the "Defendants and/or Respondents" have been released and discharged when the money was deposited in the QSF under the "resolve or satisfy" clause in  § 1.461-2(c)(2)?

Claimant is to Respondent as Defendant is to Plaintiff. See my September 18, 2014 post, What's the Difference between Plaintiff or Claimant, Defendant or Respondent?

________________________________________________________

13. In the event of notice of an application to any court for the transfer of the payment rights under this agreement, (name of Assignment Company owned by settlement planner firm holding company) reserves the right to  effectuate an immediate transfer of ownership of the "Qualified Funding Asset"

Metropoltan Life Will Not Issue a Structured Settlement Annuity to a Settlement Planning Firm's Assignment Company

This author has confirmed with Metropolitan Life Insurance Company, that Metropolitan Life Insurance Company WILL NOT issue a structured settlement annuity to a qualified assignment company other than its own. Furthermore, since MetLife spun off its retail division to form Brighthouse,  a transition which was finalized August 7, 2017, MetLife does not issue retail annuities.

Factored Structured Settlement Payments Bought as an Investment Are Not An Annuity

The acquistion of someone elses' structured settlement payment rights is not the purchase of a structured settlement annuity, in accordance with National Association of Insurance commissioner (NAIC) Statutory Issue Paper No. 160, or an annuity under the laws of most states. In 37 states, investors in other people's structured settlement payment rights do not have the same statutory protections.

What is a Qualified Funding Asset?

According to IRC 130(d)

"For purposes of this section, the term "qualified funding asset" means any annuity contract issued by a company licensed to do business as an insurance company under the laws of any State, or any obligation of the United States, if—

(1) such annuity contract or obligation is used by the assignee to fund periodic payments under any qualified assignment,

(2)the periods of the payments under the annuity contract or obligation are reasonably related to the periodic payments under the qualified assignment , and the amount of any such payment under the contract or obligation does not exceed the periodic payment to which it relates,

(3)such annuity contract or obligation is designated by the taxpayer (in such manner as the Secretary shall by regulations prescribe) as being taken into account under this section with respect to such qualified assignment, and

(4)such annuity contract or obligation is purchased by the taxpayer not more than 60 days before the date of the qualified assignment and not later than 60 days after the date of such assignment".

 

It is clear from the plain reading of IRC 130(d) that obligation refers to any obligation of the United States. So the puzzle is what is the settlement planner getting the payee into here? 

 

If you would like more information on the essentials of  structured settlement documentation, this video may be helpful.

 

 

Structured Settlement Annuity Issuers with A Ratings from Weiss Research

by John Darer CLU ChFC MSSC CeFT RSP CLTC

Two life insurance companies that issue structured settlement annuities have earned A- or better ratings from Weiss Research

• New York Life Insurance Company A-
• Pacific Life Insurance Company A-

"Weiss insurance ratings outperformed 3 to 1." United States Government Accountability Office (GAO) 

Weiss Ratings | John Darer Reviews What is a Weiss Rating? - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and John Darer Reviews (typepad.com)

 

 

Last updated February 11, 2024

The Personal Injury Victim's Dilemma | Managing Expectations of Others

by John Darer CLU ChFC MSSC CeFT RSP CLTC

It's Your Settlement and Everyone Wants Your Money Now

Personal injury victims may face the post settlement dilemma of "It's Your Settlement and Everyone Wants Your Money Now". It may feel isolating at times. Working with a settlement expert who is also a Certified Financial Transitionist can be helpful to help you manage expectations of family, friends and others and to help sort through, organize, prioritize and help make it easier to process your options. John Darer from 4structures.com LLC, a Settlement planning expert and Certified Financial Transitionist, covers the issues in this introductory video.

What is a Certified Financial Transitionist (CeFT)?

CeFT holders are experienced financial professionals who understand how life transitions change financial situations.  It is a level up designation in that CeFT designees must also have earned and maintain at least one other highly respected professional designation such as the CFP, CIMA, ChFC, CDFA, CPWA, CPA/PFS, or CFA. 

CeFTs have the comprehensive knowledge and skills necessary to guide clients through a variety of transitions. When they meet with clients, CeFT holders show empathy and know how to listen carefully to their unique needs and emotions so they can make appropriate recommendations.

During their 12-month training program through the Financial Transitionist Institute,a division of the Sudden Money Institute, CeFTs become well-versed in the four stages of transition and use them and different tools to guide their clients through a successful transition during the uncertain and often chaotic times they’re facing. CeFT's have ongoing education requirements to maintain their skills and fluency in the subject matter. 

With their support, you’ll be able to make smart financial decisions that lead to a happy future and help you avoid money problems down the road. Unlike a traditional financial advisor, a CeFT will understand the emotional side of your situation and keep it top of mind when they make recommendations and guide you through your transition. 

They can prevent you from making emotional, rather than logical financial choices that take a toll on your finances. Whether you’re anticipating a life transition or found yourself facing one unexpectedly, a CeFT can be a valuable resource and thinking partner. 

Sources:  Sudden Money Institute,  Wealthtender.com

Video copyright:  4structures.com LLC

Last updated May 14, 2024

 

Pacific Life & Annuity Services Inc. Redomiciles from Colorado to Missouri

by John Darer CLU ChFC MSSC CeFT RSP CLTC

Pacific Life Structured Settlements

Pacific Life & Annuity Services, Inc. redomiciled from Colorado to Missouri effective July 1, 2022

Pacific Life & Annuity Services, Inc., is the qualified assignment company for all Pacific Life branded structured settlements and include underwriting companies Pacific Life Insurance Company in all states but New York and Pacific Life & Annuity Company for all Pacific Life funded structured settlements where there are touch points to New York.  [e.g. New York litigants, litigation in New York Courts]  

Read What is a Qualified Assignment?

 

 

Pacific Life A+ Superior Financial Strength Rating is Affirmed by A.M. Best

by John Darer CLU ChFC MSSC CeFT RSP CLTC

Pacific Life is a Leading Issuer of Structured Settlement Annuities

On June 22, 2022, rating agency A.M. Best has affirmed the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa” (Superior) of Pacific Life Insurance Company and Pacific Life & Annuity Company (collectively referred to as Pacific Life Group). The companies are leading issuers of structured settlement annuities, the latter company being Pacific Life’s structured settlement annuity issuer in the state of New York. Both companies are headquartered in Newport Beach, CA.

Additionally, AM Best has affirmed the Long-Term ICR of “a” (Excellent) of the group’s intermediate holding company, Pacific LifeCorp (Wilmington, DE). AM Best also has affirmed the Long-Term Issue Credit Ratings (Long-Term IR) of Pacific LifeCorp. PacificLife Corp serves as the guarantor of Pacific Life and Annuity Services, Inc., the Missouri domiciled company that serves as the qualified assignee for periodic payment obligations under qualified assignments pursuant to IRC §130(c)and which purchases and owns Pacific Life structured settlement annuities as qualified funding assets pursuant to IRC §130(d)

The A.M. Best outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Pacific Life Group’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, favorable business profile and very strong enterprise risk management (ERM). Pacific Life’s balance sheet is supported by a very strong level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and its history of positive earnings trends, which are supported by being one of the industry’s leading sales organizations in its key product lines. The favorable business profile assessment reflects its prominence as a leader in the affluent market segment.

Pacific Life offers competitively priced fixed structured settlement annuities, medically underwritten life contingent structured settlement annuities,  index linked structured settlement annuities (ILAPA) and has a variable structured settlement annuity in development. Pacific Life & Annuity Company also issues structured judgment annuities in New York cases.

Pacific Life has been named one of the 2022 World’s Most Ethical Companies^®

2022 marks the fifth consecutive year Pacific Life has been recognized by the Ethisphere Institute, a global leader in defining and advancing the standards of ethical business practices. Pacific Life was evaluated on five categories, including its ethics and compliance program; culture of ethics; environmental and societal impact; corporate governance; and leadership and reputation. The Ethisphere Institute, which honors companies demonstrating exceptional ethics-focused programs and practices. Pacific Life was one of 11 insurance and financial service industry honorees.

USAA Celebrates 100 Years in Business

by John Darer CLU ChFC MSSC CeFT RSP CLTC

We're pleased to have a business relationship with USAA Life Insurance Company . The San Antonio based USAA was founded June
20,1922 by a group of soldiers to take care of their own. Over the years the USAA customer base has explanded.

USAA Structured Settlement Annuity Issuer

Today the A++(Superior) A.M. Best rated insurer has become a highly respected issuer of structured settlement annuities for a wide spectrum of claimants, particularly competitive for use as a qualified funding asset to fund long duration cash flows as payment of damages in on personal physical injury, physical sickness and wrongful death in medical malpractice, aviation, trucking, maritime and other types of legal settlements.

USAA ranks 25th on Fortune’s 2022 list of the world’s most admired companies. The ranking is based on the magazine’s poll of about 3,700 corporate executives, corporate directors, and business analysts. 

USAA ranks 96th in the 2022 US Fortune 500 and 330th in the Global Fortune 500.

USAA is one of the Wards 50 Life & Health Insurers for 2021 (29 years).

Watch a short video about the history of USAA, immediately below

Read more about

What is a Structured Settlement?

What is Settlement Planning?

Structured Settlements for Minors

Structured Settlements for Seniors

USAA Life Insurance Company does not write structured settlement annuities in taxable damage cases or where litigation is in the State of New York.

Last updated May 19, 2023

 

 

 

What Do Structured Settlements Really Do for People?

by John Darer CLU ChFC MSSC CeFT RSP CLTC

What are structured settlements and what do structured settlements do for people?  Here's the simple answer.

Sustainable income is income which is consistent and steady over time. Sustainable income for personal injury victims provides a level of calm and clarity while things are in flux. 

Thinking About Your Child's Settlement

Sustainable income post high school and/or college graduation to give them the improved options for independent living and a wider choice of career opportunities. Your child can explore career choices with greater long-term potential that may not pay as much on the apprenctice or training program level.

Thinking About Starting a Business?

Sustainable income means you can move forward with confidence, knowing you have money to pay your bills.

Over age 65 with medical expenses and want to age in place, but don't want to do a charitable pooled special needs trust?

Senior Living Senior Fears Study published March 28, 2022

• Nearly 1 in 2 older adults' biggest financial fear was not having enough money saved for retirement, and this ring truer for those between the ages of 55 and 64.
• 1 in 4 older adults fears they'll never pay off their existing debt.
• Forty-five percent of people between 55 and 64 fear having high medical bills, while 39 percent of those over 65, including many on Medicare, have the same fear.

Sustainable income, what does that mean to you?  What does it look like?

Last updated April 1, 2024

 

 

Structured Settlements | The Wonderful World of Structured Settlements

by John Darer CLU ChFC MSSC CeFT RSP CLTC

I see streams of green, lump sums too; tax-free payments for you, you and you; and I think to myself, what a wonderful world, ohhh yeah.

The "streams of green" are a perfect metaphor for the stability of structured settlement payments what that represents

I saw this wonderful image from the Robert Harding library taken from the middle of a mangrove forest, in Quang Ngai, Vietnam, that captures the essence of structured settlements in a perfect metaphor "Streams of Green".

How Can Structured Settlements Be Used?

"Streams of Green", as in customized payment streams of money that can individually, in parallel, or in conjunction, be used:

• to replace lost income
• to give a young adult a baseline as they enter the work force
• to quantify and provide a source of funding for future medical expenses
• to help fund custodial care
• or housing
• to help fund college education, grad school, a wedding, down payment on a future home, seed money for a business
• for funding a Medicare set aside at a significant discount
• to fund legacy gifts to children and grandchildren (no matter what happens)
• to smooth out uneven cash flows for a law practice
• to fund premiums for life insurance or long-term care insurance, or to create legacy wealth and much more.

The interposed blue-sky reflection on the water add to the optimism that this image represents at a time when some need hope and a reason for optimism.

The lyrics of the 1967 song, "What a Wonderful World", which I've [parodied above, were written by Bob Theile (as "George Douglas") and George David Weiss, and first recorded by Louis Armstrong ("Satchmo") during the Vietnam War amid turmoil in the 1960s, talks about the beautiful things of the world such as the blue skies, the beautiful colors of the rainbow, the warmth and friendlessness most people show each other, the lovely cries of babies, etc.

Despite the numerous heartbreaking things that happen around us on a daily basis, the song’s lyrics try to make the listener understand that despite the ugly part of the world, the world also has beautiful side that is totally worth appreciating. Owing to the sheer power and beauty of the song, it has over the years been used to try to bring people of different races together.  Read more at: https://www.songmeaningsandfacts.com/meaning-wonderful-world-louis-armstrong/.  It appeared on the soundtrack of the 1988 movie Good Morning Vietnam, after which it was reissued as a single, rose to 32 in the Billboard Hot100 and Louis Armstrong's recording was inducted into the Grammy Hall of Fame in 1999.

What is a structured settlement?

 

 

 

 

 

 

It's Just Not an Annuity | Buying and Selling Structured Settlement Payments as an Investment

by Structured Settlement Watchdog

Here are fast facts and statements to set you straight on some of the dubious claims made by individuals and companies to investors in structured settlement payment rights (also known as structured settlement receivables).

Seven Facts about Structured Settlement Receivables

1. Buying structured settlement annuity payments (receivables)is not the same as buying an annuity policy
   
2. Selling structured settlement annuity payments (receivables) is not the same as selling an annuity policy
3. Buying structured settlement payment rights (receivables) is not buying an annuity policy
4. Selling structured settlement payment rights (receivables) is not selling an annuity policy
5. Buying a subset of assigned structured settlement payments rights (receivables) is not buying an annuity policy
6. Selling a subset of structured settlement payment rights (receivables) is not selling an annuity policy
7. A structured settlement transfer is not a transfer of an annuity policy

Just because they say it doesn't make it so

• Something the insurance agent calls a "secondary market annuity", if it originated from someone else's structured settlement or lottery winnings is not an annuity policy
• Something the financial adviser calls a "secondary market annuity", if it originated from someone else's structured settlement or lottery winnings is not an annuity policy
• Something the settlement planner calls a "secondary market annuity", if it originated from someone else's structured settlement or lottery winnings, is not an annuity policy
• What somebody who gives a lot of money to be a partner of your trial lawyer association calls a "secondary market annuity" or " SMIA", if it originated from someone else's structured settlement or lottery winnings, is not an annuity policy
• What someone at your country club calls a secondary market annuity is not an annuity if it originated from someone else's structured settlement or lottery winnings.
• If your accountant tells you to buy what they call a secondary market annuity, be forewarned that it's not an annuity policy
• An annuity is not a transaction
• Selling structured settlement payments is not restructuring your settlement. The settlement agreement does not change.

Verify Insurance Coverage

If you decide to buy structured settlement payment rights, you should confirm the existence of errors & omissions insurance that expressly includes factored structured settlement investments as a covered product.

1. Be sure to get evidence from the policy form. It is possible that the settlement planner or financial adviser will try to claim that their advice on the specific product is covered under their policy, pointing to annuities as a covered product.
2. Since investments in structured settlement payment rights are not investments in annuities there may in fact be no insurance coverage at all.
3. Even where they are covered products, errors & omissions policies generally do not cover insolvencies.  

Don't count on state insolvency schemes to provide a safety net either as 40/50 states at time of this post's latest update, expressly exclude such investments with 2 states having such exclusions under consideration. The National Association of Insurance Commissioners is aggressively encouraging its members to adopt the 2017 revisions to the Life & Health Guaranty Associations Model Act (#520), which provides for a retroactive exclusion. In plain words, you're not safe if you acquired one of the investments prior to your state's adoption of the revisions.

E&O Insurance Policies May Exclude Annuities Below a Certain A.M. Best rating

Many E&O policies require a minimum A.M. Best rating.  A credit rating agency assesses the creditworthiness of an obligor as an entity or with respect to specific securities or money market instruments. A credit rating agency may apply to the SEC for registration as a nationally recognized statistical rating organization ("NRSRO"). While a securitization from JG Wentworth may be rated, random factored structured settlement payments are unlikely to have such a rating.

Last updated February 8, 2024

 

 

Does a QSF Need to be Established in Order to Structure or Defer Attorney fees?

by John Darer CLU ChFC MSSC CeFT RSP CLTC

 

Does a Qualified Settlement Fund Need to be Established in Order to Structure or Defer Attorney fees? 

As an initial matter, it is not necessary to establish a qualified settlement fund in order to structure or defer attorney fees. 

 

There are a few settlement planners who aggressively push qualified settlement funds and misrepresent that "it's the only way" for you to benefit from structured attorney fees or other attorney fee deferral programs.  To say categorically that "it's the only way", is rubbish. There are many attorney fee deferral options that do not need a QSF.

• Read more about Qualified Settlement Funds
• Read more about Attorney Fee Deferrals and Structured Attorney Fees

Consider the facts and circumstances before you act.