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911 on Dick Risk: A Sore Winner That Sticks Out Like a Sore Thumb

On May 19, 2012 I was at the Allianz Arena in Munich Germany to witness the final of the UEFA Champions League  between Bayern Munich of Germany and Chelsea FC of London (my team).  Bayern scored 7 minutes before the end, Chelsea equalized 5 minutes later and Bayern missed a penalty in overtime before an extraordinary penalty shootout took place. After having its first penalty saved, Chelsea won the penalty shootout when the normally reliable Germany international Bastian Schweinsteiger hit the post and Didier Drogba, who had earlier scored Chelsea's equalizer, scored the winning penalty with his last kick for Chelsea. I've personally witnessed Didier Drogba score some extraordinary goals, but what he did after the game was even more extraordinary. Didier Drogba , the human being, took time out of the celebration, to give his opponent Bastian Schweinsteiger, another human being, a hug to console him at a very difficult moment.

Dick Risk could learn a bit of humility from Didier Drogba. Trying to drum up more business, Florida attorney Risk shuttles from conjecture to innuendo in not letting go of taking credit for Hartford Life Insurance Company's withdrawal from the structured settlement marketplace (Risk's credibilty concerning this alleged fact has been under challenge for almost 2 years). Has Risk has made an admission by revising some his promotional material to say  "Perhaps by coincidence, this class action lawsuit (still says "his" on Risk Law Firm  website) was followed by the insurer’s exit from the structured settlement annuity marketplace" ?

Dick Risk earned millions of dollars in legal fees from the settlement of the class action lawsuit against The Hartford for his role in a multi-year fight against alleged  bad business practices. Fair enough.  In my opinion however, Dick Risk's original and revised statements merely reflect an attorney who continues to appear willing to gloat of something that, if only the causation were true,  might have cost people their jobs in a down economy for his own personal gain. As a comparison,  NONE of Dick Risk's co-counsel in the Spencer v Hartford lawsuit seem to possess Dick Risk's "gravitas". 

See Credit Check For Attorney Dick Risk" August 23, 2011 and

Dick Risk Takes Credit For Hartford Life Withdrawal From Structured Settlement Market December 18, 2010

 

 

 

Alternative Structured Settlement Business Models

by John Darer® CLU ChFC MSSC RSP CLTC

"Is it necessary for one or the other business model to prevail or could each side benefit by recognizing the role of the other?" says Charlie Schell, one of the founding principals of Forge Consulting out of Hartwell, GA and incoming President of the Society of Settlement Planners in response to Patrick Hindert's recent missive "Alternative Business Models".

Hindert, an officer of TSSG, which is owned by Forge Consulting, opines that "the future of structured settlements depends upon which of two alternative business models ultimately prevails - the traditional (defense-controlled) claim management model  or the emerging (claimant centric) settlement planning model". Hindert has continued down this diplopic path of Claims Management Model vs Settlement Planning Model since he "bathed" in the "magical waters" of the "DiGanges River" in the first decade of The Millennium
 

Schell's poignant response recognizes that there is far more to the limited scope of Hindert's frame. Even as someone who believes in settlement planning, who is a Registered Settlement Planner and Certified Structured Settlement Consultant, I submit that there are more than two ways to operate successfully in the structured settlement business going forward. There are opportunities in multiple business models if one has the vision to see them. Why fight over the same wooden nickel?

Hindert criticizes of insurance companies for "proactive case identification and negotiation participation by defendants designed to sell structured settlements". Hindert's statement demonstrates a shocking naivete for someone of with 30 years in the industry. Judging by his previous and ongoing commentary Hindert appears to operate in a narrow personal injury big case context and fails to recognize significant growth opportunities not available to the "radical left". I don't think that claims departments identify cases to sell structured settlement annuities. I think the ones that are proactive recognize that structured settlements, and/or the resources provided by structured settlement experts (and settlement planning experts), are a tool that helps to settle cases. Moreover, as hard as it may be for some zealots to believe, some defendants and insurers even participate in structured settlements because it's the right thing to do.

Hindert's comeback would surely be the Spencer case v Hartford and Macomber v Travelers, but in my opinion the industry has learned and moved on. Why break more wind on those cases?

I continue to question Hindert's motivations as he criticizes "de minimus regulation of sales conduct" while NEVER appearing to advocate similar standards for the secondary market.

Hindert incredibly blasts what he calls the hostility towards the secondary structured settlement market when he himself wrote commentary on the performance of "Chairman MAU" and others criticizing that industry at a National Association of Settlement Purchasers annual meeting. He offers no current commentary on the structured settlement secondary market practices even though the Society of Settlement Planners has had a Director for the period 2010-2012 who simultaneously places structured settlements and has ties to factoring company Rescue Capital, a company which asks structured settlement annuitants "Why Wait?". What business model does THAT fall under?

It is worth highlighting that the advertising message of the latter is a practice appealing to immediate gratification and greed that was condemned as one of the "worst business business practices" by an industry panel (that included that now former SSP Director) as reported by Hindert at the November 2009 meeting of the National Association of Settlement Purchasers, which Hindert assisted in organizing. The secondary market is critical of itself although it is not critical enough.

Is there a company in the primary structured settlement market that operates a re-direct scheme that competes by diverting search traffic on a massive scale by appropriating the trademarks of others, as Sovereign Funding Group and its CEO David Springer have been alleged to have done in two law suits? 

Oops, I almost forgot about the Delta Settlements StructureBroker.com scheme of 2011, which involved the former SSP director Delta publishing an online "directory "  that providing tailored and sometimes utterly false descriptions of the business practices of its competitors framed by its logo and an offer of a second opinion. Not exactly the same but questionable nevertheless. Mea culpa.

 

Hartford Life Insurance Company to Exit Structured Settlement Business

by John Darer® CLU ChFC MSSC RSP CLTC

Hartford Life Insurance Company will cease writing new structured settlement annuity business effective April 27, 2012. The Hartford had only re-entered the business last summer after a brief hiatus, but pressure put on the parent company to narrow the company focus to its property casualty business by major shareholder John Paulson,  was the impetus to the action.  Hartford Financial Services Group Inc. also announced it will stop selling individual annuities and seek buyers for parts of its life-insurance unit, according to various news reports today.

The important thing for Hartford annuitants is that Hartford Life Insurance Company IS NOT going out of business. It is only ceasing writing new business in the structured settlement market segment.

Hartford previously exited the structured settlement business in October 2009 "as part of the company's decision to exit the institutional business" , spokesman David Potter said on August 23, 2011- Forbes   Here is the video podcast that Mark Wahlstrom and I published October 30, 2009.

Despite this, "revisionist historians" Tulsa attorney Richard B. Risk, Jr. and Patrick Hindert continue to mischaracterize the 2009 withdrawal (Risk on his website, Hindert on his S2KM  blog) as the result of the settlement of the Spencer v Hartford lawsuit when none of the other attorneys associated with the lawsuit make the same claim.  Proud of success yes, but those attorneys have moved on.

Hartford CEO Liam McGhee is quoted in Bloomberg News March 21, 2012 that he opted against the complete breakup advocated by billionaire John Paulson because it wasn’t the best way to create value. 

Credit-default swaps on Hartford Financial Services Group Inc. fell by the most in a day since Nov. 30, 2011. The cost to protect debt tied to Hartford Financial from default for five years slid to the lowest level since August 2011, according to Bloomberg.

"Credit Check" for Attorney Dick Risk?

While Tulsa attorney Dick Risk seems to imply to visitors to the Risk Law Firm website that he was responsible for Hartford Life leaving the structured settlement business in 2009, today's Hartford press release suggests otherwise.

 
Risk Law Firm Website today*:  "His class action lawsuit was followed by the insurer’s exit from the structured settlement annuity marketplace".

"The Hartford stopped writing new structured settlement annuities in October 2009 as part of the company's decision to exit the institutional business, spokesman David Potter said Tuesday"  (August 23, 2011).   Forbes, announcing Hartford's re-entry into the structured settlement market.

Perhaps it's time to stop being a dick, Dick! 

 

    Milking "Spencer"?           

 

* we also reported on this December 18, 2010 in this post                                                                                                                                                     

Hartford Life Withdrawal From Structured Settlement Market | Dick Risk Takes Credit

by John Darer CLU ChFC CSSC RSP

Tulsa Lawyer Dick Risk, a former disgruntled structured settlement producer who decided to take matters into his own hands, got a law degree and then started on a long journey (in conjunction with several other law firms) that resulted in a successful class action settlement, gloats that "His class action lawsuit was followed by the insurer’s exit from the structured settlement annuity marketplace".  Source: Home page of Risk Law Firm website December 18, 2010 245pm EST

The fact that an alleged bad business practice was dealt with in the legal system is enough. The self-aggrandizing implication made by Dick Risk seems obvious, and thus he deserves to be called out on the carpet for making the implication.

The following is offered up for the consideration of my readers...

Even if one were to consider the life insurer's alleged role in the alleged business practice to be abhorrent and the "windfall" that Dick Risk and his legal colleagues obtained is a great result for each of the plaintiffs and as a deterrent to other insurers doing the same, what has Hartford Life Insurance Company's "exit from the structured settlement annuity marketplace" achieved in real terms for plaintiffs as we go forward?

• If we were to believe The Risk Law Firm implication, should we further congratulate Dick Risk because the result is a degree of erosion in competition due to having one less annuity issuer in the structured settlement annuity marketplace?
• Hartford Life Insurance Company was one of the few insurers in the marketplace that did not charge qualified assignment fees. They were especially useful on small cases as a result. Should Dick Risk now be further congratulated for exhibiting the "class" to "take credit" for something that ULTIMATELY HURTS small PLAINTIFFS?
• Even if one were to give Dick Risk credit for purportedly taking down Hartford Life Insurance Company's structured settlement annuity program, he DID NOT take down Hartford Life Insurance Company,  or the The Hartford itself which incidently,  is endorsed by the AARP, an association whose membership card Dick Risk qualifies to be carrying in his wallet.  According to the AARP website, The Hartford insures its auto and homeowners' insurance programs.
• On a more fundamental level, was "his class action lawsuit" the actual reason that Hartford Life Insurance Company withdrew from the structured settlement annuity marketplace in October 2009?
• If the above were actually true, how many jobs were lost as the direct result of  "his class action lawsuit" in the middle of a recession?  Why would Dick Risk choose to gloat?

Fortunately Mr. Risk's legal colleagues have chosen not to imply that they were responsible for Hartford Life Insurance Company's withdrawal from the structured settlement market place.

Comments anyone?

 

 

 

Spencer v Hartford Settlement Distribution Calculations

 

Now that the Spencer v Hartford settlement has been finalized and distribution checks have been mailed perhaps the scaremongers "firing guns into the sky"  from the left wing of the settlement industry (to those trial lawyers who will listen),  can stifle themselves.

The structured settlement watchdog condemns the behavior of a certain element of those that refer to themselves as "settlement professionals" or "structured settlement planners", who seek to hyper generalize the alleged former behavior of one company or another as the status quo. when nothing could be further from the truth.

 With respect to Spencer v Hartford, one can sum up the proceedings with a paraphrase of Julius Caesar  "They came, they saw, and they achieved a VERY nice settlement."

Dick Risk, one of the lawyers involved for the plaintiffs in the Spencer v Hartford litigaton, states on the website of The Risk law Firm:

"While the class representatives alleged that The Hartford kept 15 a total of percent of the purported cost for their own benefit, based on several components, the parties acknowledged that neither side was assured of prevailing. Ultimately the gross settlement ($72,500.000 before interest) represented about 5.1491996979478% of the total premium in question ($1,407,985,789.11). This was more than  the 4% originally sought in the first complaint".

Other Resources

1. Risk Law Firm Spencer v Hartford Statement of Distribution Calculations
2. The Spencer v Hartford Structured Settlement Class Action Information website 
3. Spencer v Hartford Update by Mike Miller of Drinker Biddle Reath, LLP from March 2010 which gives a defense commentary on the case

 

Spencer v Hartford Class Action Settlement Website

by John Darer® CLU ChFC MSSC RSP CLTC

Structured settlement annuitants with questions concerning the structured settlement class action settlement in Spencer v Hartford should refer to the informational web page which one can find by following this link

In reviewing the web page the structured settlement watchdog notes an inaccuracy in the "Important Note" which reads:

"Important Note: This proposed settlement does not affect your original settlement agreement with a Hartford property and casualty company in any way. It will not change the amount or timing of your payments under your structured settlement. Hartford Life will continue to have the obligation to make any outstanding structured settlement payments under your structured settlement".

Commentary

It is unlikely that Hartford Life Insurance Company has the obligation to make any structured settlement payments to you, very simply, because plaintiffs do not own structured settlement annuities. Even though you can engage a representative of Hartford Life Insurance Company to change the bank account for direct deposit, change a beneficiary or submit a change of address, you do not own the annuity.

You may have to check your settlement papers or the copy of the annuity contract, but it is more likely than not that the structured settlement annuity issued by Hartford Life Insurance company is owned by Hartford Comprehensive Employee Benefits Service Company, also known as Hartford CEBSCO.  This would be the case if there was a "qualified assignment".

If there was no qualified assignment and the annuity was simply "bought and held" then the Hartford Financial entity that insured the Defendant is the obligor

To recap, the owner of the structured settlement annuity is the party obligated to pay you. The annuity is a "qualified funding asset". The settlement documents that you entered into when you settled your case will likely have expressly stated that you have no interest in the contract other than the right to receive the payments.

Postscript

Hartford Life Insurance Company has been known as Talcott Resolution Life Insurance Company since 2018

 

 

 

Spencer v Hartford Financial Services Group Class Action Settlement

by John Darer® CLU ChFC MSSC RSP CLTC

If you've ever been curious of the amount of work that goes in to a class action and the fascinating way that attorney compensation is determined in such cases, you need look no further than the August 16, 2010 Declaration of one of the attorneys involved in the recent class action settlement in Spencer v Hartford Financial Services, Inc.,  which was submitted in advance of the upcoming September 21, 2010 hearing to determine the final attorney fees.

Download Declaration_David S.Golub_together with Exhibits_A_F

For more information about the settlement please refer to the Hartford Settlement Class Action website.

Hartford Structured Settlement Class Action Case Information Website

 

 

Spencer v Hartford Settlement: For Some Reality Can Only Be Seen When The Mirror Is Clean

Some of those in the structured settlement and settlement planning industry who have aspirations to use the Spencer v Hartford case in their marketing schemes ought to look themselves in the mirror. A specific class carved out of the class action lawsuit included those who settled with Hartford insureds with a Hartford Life structured settlement BUT, were represented by a plaintiff structured settlement broker or settlement planner.

While you can count me as someone who had  disdain for The Hartford's erstwhile "all or nothing" structured settlement business decision, there are questions to be asked of those who now have aspirations to burn The Hartford and other insurers in effigy.

Inconvenient Questions

1. How many of those now using Spencer v Hartford as a tool with plaintiff lawyers accepted a share of commission on structured settlements from Hartford insured cases THEN, when they had knowledge that there was "deal" in place?
2. How many of them were affiliated, at any relevant time covered in the lawsuit, with general agents who signed agreements with The Hartford to accept a lower rate of commission on cases settled with Hartford insureds?

Ironically, one of the plaintiff attorneys in the class action, Richard B Risk, Jr., who was recently given a lifetime achievement award by the Society of Settlement Planners in part due to the  result of the suit,  was a licensed insurance agent and structured settlement broker for the early portion of the relevant times covered by the suit.

I find it pathetic that some in my industry have chosen to go down this road.  Yet I find it amusing to know that at some point the dots will be connected between these over the top marketers and their own failure to disclose.

"Reality Is Only Seen When The Mirror Is Clean"-Unknown