by John Darer CLU ChFC MSSC CeFT RSP CLTC
Structured Settlement annuities are only placed by or in conjunction with licensed agents, brokers and consultants who hold active life insurance licenses (annuities, which are issued by life insurance companies, are grouped into this category for regulatory purposes) and are authorized by the insurers that issue the structured settlement annuities.
Note that even if someone markets themselves to you as a settlement planner, they are acting in the capacity as agent or broker when placing, or co-broking a structured settlement annuity. In New York State, individuals or companies holding life broker licenses may also act as structured settlement consultants, but may not be appointed by the annuity issuer. Such brokers and consultants are generally paid a one-time commission or share of the commission, by the annuity issuer(s), or co-broker, for placing the structured settlement annuity or other funding asset. Generally, state insurance law prohibits rebating of commissions.
What About all this noise about fiduciaries?
Simply being a fiduciary does not mean you can place structured settlement annuities. Fiduciary is an ideological standard for many settlement planners. But the indelible fact remains that in order to place insurance products and receive a commission or fee, the same settlement planners must hold an active license and be authorized by the issuing life insurance company. Alternatively, at least in New York state, you can hold a life broker's license and not need an insurer appointment, if you place through an appointed agent.
Different business models abound, but in the end, it's the S.O.S. when it comes to placement of the structured settlement annuities!