by John Darer CLU ChFC MSSC CeFT RSP CLTC
Wilcac Structured Settlements, Inc., d/b/a CNA Structured Settlements, Inc. and Wilcac Life Insurance Company sued a Mineola New York couple, individually and as guardians of for their deceased son, seeking recovery of $272,266.14 in overpaid life contingent structured settlement payments paid after the death of their son. Defendants have refused to repay the $272,266.14.
WILCAC STRUCTURED SETTLEMENTS, INC., d/b/a CNA STRUCTURED SETTLEMENTS, INC. and WILCAC LIFE INSURANCE COMPANY, Plaintiffs, -vs- CANAN IPEK and HAYRULLAH IPEK, individually and as guardians of Ekincan Ipek, deceased, Defendants E.D.N.Y. 2:19-cv-6928 Download Wilcac v Ipek Complaint re structured settlement overpayment
According to the Complaint filed December 10, 2019, the Settlement Agreement with Mount Sinai Hospital provided that Ekincan was to receive certain payments including:• $475,237.00 in cash;• monthly payments of $25,000.00, commencing January 15, 1997, increasing 3% every January 15th thereafter, and continuing through and including December 15, 2001 (the “Guaranteed Monthly Payments”);• monthly payments of $30,000.00, commencing January 15, 2002, increasing 3% every January 15th thereafter, and continuing for the life of Ekincan thereafter (the “Life Contingent Monthly Payments”); and• $250,000 on December 15, 2001 and December 15, 2006, and every five years for the life of Ekincan thereafter (the “Life Contingent Lump Sum Payments”)
The Life Contingent Monthly Payments and the Life Contingent Lump Sum Payments were due and payable if – and only if - Ekincan was alive on the date that each such life-contingent payment was due.
Infants Comp Order Obligated Mineola Couple To Provide Annual Proof of Living and Timely Notice of Death of Annuitant to Insurer
As set forth on page 14 of the Infant Compromise Order of Judge Ira Gammerman, entered in the Supreme Court of New York, County of New York, in the matter captioned Canan Ipek and Hayrullah Ipek, as parents and natural guardians of their son, Ekincan Ipek, and Canan Ipek and Hayrullah Ipek, Individually v. The Mt. Sinai Hospital, Index No. 121180/96 (the “Guardianship Matter”) in the event of the demise of Ekincan, The guardians were ordered to" arrange for the primary care physician of Ekincan to “furnish to [Wilcac] a letter attesting to the death of [Ekincan] within 4 days"
The Infant Compromise Order also specifically provided that "the future life contingent payments and the non-guaranteed payments shall cease if the infant leaves the United States or if CNA Structured Settlements, Inc. is not notified annually of his life status"
Ekincan died March 31, 2016, but Wilcac LIfe was not notified until September 15, 2016 when it received a copy of the death certificate by priority mail. Because Wilcac Life was not promptly advised of Ekincan’s death, the Life Contingent Monthly Payments of $45,377.69 each, from April 15, 2016 through and including September 15, 2016 were paid to Ekincan, totaling $272,266.14 (the “Overpayment”). Neither Ekincan nor his parents, the Ipeks, were entitled to these funds pursuant to the terms of the Annuity contract
When is Proof of Living Necessary With Some Structured Settlements?
Proof of living is not that unusual to prevent overpayment and potential fraud. Proof of Living (also known as Certificate of Life, Certificate of Existence, Letter of Existence, Proof of Life) is a certificate produced by a trusted entity to confirm that an individual was alive at the time of its creation. Governments, pension and insurance companies and other bodies may need to check periodically that the people they are paying have not died so that they do not overpay annuities and pensions. Where individuals are resident outside their country of origin, a Certificate of Life may sometimes be obtained from a person's embassy in their country of residence by producing proof of identity such as a passport.
Clearly the proof of living concern was addressed at the time of settlement as shown in the express language of the Infants Compromise Order at page 14.
A motion for extension of time filed by Defendants with Court states that the parties are currently in settlement negotiations. The Court granted an extension of time to determine whether a settlement may be reached or whether Defendants need to respond to the Complaint. The parties agree to an extension of time to respond to the Complaint, up to and including March 20, 2020.