Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and John Darer Reviews

History of Settlement, Structured Settlements and Settlement Planning and Legal Trade Marks

by Structured Settlement Watchdog

Here we try to provide a historical digest of trademarks using keywords related to settlements, structured settlement and settlement planning.

• Former  Pittsburgh company Structured Annuities, Inc. registered SA Structured Annuities logo in 1984 and it was cancelled in 2005.
  

  Circa 1984 
• Another  of the earliest trademarks was " Structured Claims Settlement"  filed by USF&G Insurance Company in 1991, issued in 1993 and abandoned
  

  From the 1991-2000 structured settlement "time capsule"
  d in 2000 after the company was acquired by St. Paul Insurance.  It was a design mark. A review of the USPTO records shows that one of the design elements earmarked for protection included Farmers, Hobos, Farmers and Hobos wearing overalls.  Definition of hobo  "immigrant worker or homeless vagrant"
• A failed attempt was made to trademark the term " structured settlements" more than 40 years ago and abandoned almost 37 years ago.
• Several failed attempts were made to trademark the term "the structured settlement company". Ultimately as the applicants learned, the descriptive term structured settlement company is only able to be trademarked  when preceded by or in conjunction with another word. For example  ABC The Structured Settlement Company might work.
• The factoring company, Settlement Capital Corporation trademarked "Settlement Capital..It's In Your Annuity" despite the fact that it isn't in your annuity, it's in your structured settlement payment rights. The structured settlement annuity is, in most case,  owned by a qualified assignment company
• An Atlanta Georgia law firm has a pending application to trademark  the aspirational "Next Stop Big Settlement".  If only it were that easy.
• An Atlanta structured settlement broker has trademarked "More Than Just Structured Settlements", a move to seemingly get out of the pigeon hole.
• A Ft Lauderdale Florida law firm has a puntastic trademark  " A Good Settlement is No Accident".
• A Georgia settlement planner registered Structured Settlements made Simple" in December 2019.
• My firm owns " We Know Structured Settlements" and "4structures"

Settlement Planning Trademarks

• There is not much traction. There is currently only one active trademark using the term settlement planning,  " We Know Settlement Planning", a mark of 4structures.com, LLC. Iwo other firms registred marks and then cancelled them. Another firm applied for 3 separate marks and abandoned their efforts on all three before registration.
• There is only one active trademark using the term "comprehensive settlement planner"
  
  

Structured Settlement Factoring Trademarks

• PV PRESENT VALUE NEWS & TRENDS IN STRUCTURED SETTLEMENT & ANNUITY TRANSFERS FROM J.G. WENTWORTH  Abandoned September 2007
• Failed attempts were made in 2012 and 2014, to trademark the scam label " secondary market annuities". by merchants selling factored structured settlement payment streams. Both were abandoned.

 

 

 

 

 

 

 

Structured Settlements | The Year in Review 2019

by John Darer CLU ChFC MSSC CeFT RSP CLTC

When results for 2019 are released shortly,  indications are that U.S. structured settlement industry production ended the decade having topped $6 billion for the second year in a row after a decade surfing below that level, stemming from the 2008 financial crisis.  

January 2019

The Tennessee State legislature introduced bills to make various changes to the “Tennessee Life and Health Insurance Guaranty Association Act. The Tennessee House and Senate bills excludes from coverage under the Act "a person who acquires rights to receive payments through a structured settlement factoring transaction, as defined in federal law, regardless of whether the transaction occurred before or after the federal law took effect.

DRB Capital claimed that since the DRB bounty program's launch in August 2018, DRB Capital has awarded one payout and received numerous tips and credible information about unfair, deceptive and abusive activities in the structured settlement secondary market. DRB claims that many of these violations are criminal in nature, including the routine falsification of information submitted to state courts as part of structured settlement transfer petitions.

Sean McManus, principal of structured settlement factoring company Patriot Resources is sued by FINRA for selling "Snake Oil" without a license. Yes a snake oil salesman!

February 2019

Structured settlement industry production reports, compiled by Melissa Evola Price, confirm that 2018 production exceeded $6 billion which was the highest in a decade, an 8.45% increase over 2017.

Structured settlement annuity issuer Pacific Life Insurance Company  was named among the most ethical companies in the world for the second straight year.  USAA is named for the fourth straight year. Prudential Financial is also named.

Settlement checks are mailed in the Aviva/ Athene Class Action settlement.

A structured settlement transfer petition is submitted in Orange County Florida featuring a 19 Year old structured settlement annuitant trading $6,351,156.88 for $1,252,430.91.

New York’s attorney general has declared it’s illegal to sell fake social media engagement in order to inflate one’s online influence, ruling against one “fake like” merchant in a landmark decision in the battle against bots. Bots and other fake accounts have been running rampant on social media platforms, often stealing real people’s identities to carry out fraud,” Letitia James said in a statement accompanying the decision. “As people and companies like Devumi continue to make a quick buck by lying to honest Americans, my office will continue to find and stop anyone who sells online deception. With this settlement, we are sending a clear message that anyone profiting off of deception and impersonation is breaking the law and will be held accountable.”

A review of the deposition excerpts from deposed parties in Court filed documents in in Wall v Altium Group LLC show that there was a misrepresentation of the nature of What Retirees Were Buying Multiple Times. The Walls lost their entire investment in an origination fraud.

March 2019

A creative Florida structured settlement factoring company submitted a New York structured settlement transfer petition in Queens County with the caption In the Matter of And vs None. Who's on First?

On March 13, 2019, the DC Structured Settlements Protection Act of 2018 (SSPA) went into effect, updating the District of Columbia’s statutes to provide better protections to personal injury victims who receive financial compensation for their damages in the form of structured settlements.(Mar. 13, 2019, D.C. Law 22-235, § 101, 66 DCR 580.) 

April 2019

Michelle Caine of Prudential Financial begins her term as President of the National Structured Settlements Trade Association. 

In  Wall v Altium Group, the Western District of Pennsylvania granted summary judgment in the favor of Altium Group on April 30, 2019 against Pennsylvania retired couple. Altium Group has advertised scam labelled "secondary market annuities" as having "Unparalleled Safety of Principal"  Instead the investors in secondary market annuities" ended up with $0 and big Legal Fees

Allstate Corp. enters into talks to sell its $2.5B annuity block (that includes structured settlements) to FGL Holdings.

Investors in Secondary Market "Annuities" are crushed as The Maryland Court of Special Appeals has reversed a trial judge's approval of a class action settlement with victims of the Access Funding exploitation of lead paint structured settlements,  finding the parties could not bargain away the Maryland Consumer Protection Division's right to seek restitution from the company

H.R. 2212, the Structured Settlement Claimant Rights Act of 2019 is introduced

CBC Settlement Funding, a Conshocken, PA structured settlement factoring company associated with Sutton Park Capital CEO Steve Pasko, is relentless in outrageous pursuit of deal , a year after structured settlement factoring Petition on 19 year old NJ resident was canceled due to mental Illness after his parents intervened.

Payment servicing in factored structured settlement deals. In one case a payment assignee's representative notified the annuity issuer that the payment assignee (not qualified assignee) died, but the annuity issuer inaccurately entered it into their system that the annuitant died. When the servicer contacted the beneficiary to express its condolences they learned that the alleged decedent was very much alive. A representative of the annuity issuer then asked for proof that the annuitant was alive, when the mistake was theirs in the first place.

May 2019

A Federal District Judge in Eastern Pennsylvania has denied motions to dismiss racketeering claims against Seneca One, JG Wentworth, 321 Henderson and Portsmouth Virginia lawyer and delegate Stephen Heretick in the matter of Larry G. Dockery et al. v Stephen E. Heretick et al. and New York Life Insurance Company, et al.Case 2:17-cv-04114-MMB.

June 2019

The end of the road for the so-called " AIG Structured Settlement Class Action" as the First Circuit Court of Appeals affirms the District Court ruling against Plaintiffs. Retired United States Supreme Court Justice David Souter wrote the decision stating in pertinent part,  "The annuity companies' payment of brokers' commissions from out of the money Lexington paid for the annuities does not belie the facts that Lexington paid the amounts it quoted and that appellants received exactly those specific annuity payments the agreements had promised, payments that the appellants have not alleged that they failed to receive". 

On June 11 Louisiana Governor John Bel Edwards signed Louisiana Senate Bill 193, now identified as 2019 Louisiana Act 260, which will replace Louisiana’s
flawed Structured Settlement Protection Act with a new statute largely conforming to the National Conference of Insurance Legislators (NCOIL) Model SSPA. The new statute, which will not take effect until July 1, 2020, also includes registration and bonding requirements for factoring companies seeking to acquire payment rights of Louisiana residents, plus prohibitions intended to curtail “poaching” of transactions by competing factoring companies

July 2019

The  State of Connecticut plans to increase its statutory protections for structured settlement annuitants in the event of insolvency of the annuity issuer. 
CT investors in structured settlement payment rights  do not have the same statutory protection as structured settlement annuitants effective October 1, 2019. To eliminate any confusion, changes to the CT statute contain an express exclusion from protection for investors in structured settlement payment rights acquired through a structured settlement transfer regardless of whether that structured settlement transfer occurred prior to the enactment of the new law. [ see C.G.S. 38a-860 (O) structured settlement annuity benefits to which a payee or beneficiary has transferred the payee’s or beneficiary’s rights in a structured settlement factoring transaction as defined in 26 USC 5891(c)(3)(A), regardless of whether the transaction occurred before or after said section became effective]. The new law is part of an Act Concerning Conforming Minor and Technical Changes To Statutes Concerning Insurance and Real Estate. 

A structured settlement factoring origination firm associated with a New York structured settlement primary market agency registers as a structured settlement transferee with the  Office of the Attorney General of the State of Maryland.

August 2019

Factoring company Novation Settlement Solutions attempts to scam consumers with a rising interest rate scam to induce them to sell their structured settlement payments to Novation for pennies on the dollar. The Novation scam was notable given that interest rates were actually falling the time of the advertisement.

Former head of factoring broker Sovereign Funding Group, David Springer, in more dubious self promotion, representing on LinkedIn that he has authority to sell life insurance when neither the dates of professional license that the Mt. Airy man claims, nor the line of authority Springer claims he has, can be corroborated in the most current Maryland Insurance Administration database. 

August 19, 2019  CT Judge Snuffs Bad Deal for 18 year old New York annuitant forum shopped by structured settlement factoring company to Connecticut. The bogus deal was signed days after the young Hispanic male graduated high school. The denied deal had between $406,000 and $530,000 in profit spread. The 18 year old  annuitant posted different selfies of himself while wearing the same Famouse Famiglia Pizzeria uniform in the bathroom at work 3 or 4 times in the days leading up to the New Haven transfer hearing and then again days after? If the young man really lived at the purported address in CT, then why would he commute 2 hours each way for an hourly "minimal wage" job on the West Side of Manhattan, when there were plenty of pizzerias and fast food joints in CT?

September 2019

Married man’s death during sex on business trip was ruled a ‘workplace accident’ which under French court ruling, means tbay any partners and children will receive a monthly benefit of up to 80 percent of his salary until what would have been his retirement age and then a share of his pension

Disgruntled former structured settlement broker turned lawyer Dick Risk's quest to take down AIG, has been nailed shut as the deadline to file Writ Certiorari has come and gone.  Three months earlier, the First Circuit Court of Appeals had already affirmed the Trial Court's September 2018 decision. Predictably no word from all the snipers in the settlement planning media who devoted excessive air time to the poorly pleaded litigation at the outset but not even a byline when the lawsuit met the fate it was due.

One or more unnamed structured settlement factoring companies are targeting United States consumers using an Egyptian company in an apparent effort to skirt US telemarketing laws. A representative of one Egyptian company, Proper Business Solutions, who claimed to be an American, claimed to me that because they have no presence in the United States they are not subject to its laws.

FINRA claim concerning " secondary market annuity" investment is settled, according to FINRA Broker check for Somerset CEO Thomas Hamlin.  The former merchant of factored structured settlement payments streams settled with Barry Cooper, a retired Navy worker who invested substantially all of his retirement money from years of back breaking work at a naval yard

NY Senate Bill S6688 sponsored by Afro-American state senator James Sanders, Jr. requires licensing for Commercial Loans but not structured settlement factoring companies or their representatives who for two decades without regulation,  have had free reign to harass and solicit vulnerable NY Individuals, many of whom are blacks and other minorities so they can buy up their assets for pennies on the dollar.

October 2019

A structured settlement factoring origination firm associated with a New York structured settlement primary market agency seem to suggest to investors, that factored structured settlement payment streams have the same risk profile as United States Treasury Bonds in its marketing.

Former Woodbridge Group of Companies Owner and CEO Robert H. Shapiro was sentenced to 25 years in prison by a Miami Federal District Court judge Cecilia Altonaga on October 15, 2019 for Shapiro's role in a $1.3 billion Ponzi scheme. Shapiro was handed the maximum possible under the charges of mail and wire fraud and tax evasion in the scheme, resulting in approximately $450 million in losses for more than 7,000 investors, many of them retirees who had invested retirement funds, between July 2012 and Dec. 2017. Shapiro pleaded guilty in August 2019.

October 21, 2019  "Seeking to redress Defendants’ unfair, deceptive and fraudulent conduct that has caused Missouri consumers to not receive the necessary legal advice of disinterested counsel when evaluating offers to purchase structured settlement payments, and subsequently obtain less than the fair value of their settlement to the benefit of"  Defendants, a Class Action lawsuit is filed against JG Wentworth entities alleging violations of the Missouri Structured Settlement Protection Act  RICHARD A. TARVIN III, individually and on behalf of all others similarly situated, Plaintiff, v. THE J.G. WENTWORTH COMPANY; 321 HENDERSON RECEIVABLES LIMITED PARTNERSHIP; 321 HENDERSON RECEIVABLES ORIGINATION, LLC; J.G. WENTWORTH STRUCTURED SETTLEMENT FUNDING CORPORATION; and J.G. WENTWORTH STRUCTURED SETTLEMENT FUNDING II, LLC, Defendants. Case Number: 4:19-cv-02860-SRC United States District Court for the Eastern District of Missouri.

A Willis Towers Watson blog published October 24, 2019 suggested that sellers and potential buyers of structured settlement annuity portfolio transfers could find themselves handicapped by outdated and inaccurate mortality projections. Their comments include that underwriting was only as good as the information available at the time of issue, and may have been influenced by pressure to produce winning bids in what, in past years, was a very competitive market. Insurers have not refreshed their approach to expected future mortality. Rated age methodology hasn’t accurately accounted for medical advances or even the seasoning of the business.

November 2019

United States Owned Structured Settlement Annuity saved the day in Texas for Estate over ex-husband of decedent. See Memorandum Decision and Order November 13, 2019 in John Hancock Life Insurance Co. Plaintiff, vs. The Estate of Jennifer Lauren Wheatley, et al,Defendants. US District Court Southern District of Texas 4:18-cv-02689 

The United States Court of Appeals for the Federal Circuit concluded November 27th, that the Court of Federal Claims in Langkamp v. United States, 131 Fed. Cl. 85 (2017) (“Court of Federal Claims Decision”), erred in holding that the United States had no continuing liability for the future monthly and periodic lump-sum payments specified in the (settlement) agreement, and reversed and remanded. It was the first decision requiring the US to make up shortfalls from the ELNY liquidation.  Attempts to get the US to pay in two prior cases had failed.

December 2019

Wilcac Structured Settlements, inc.,  d/b/a CNA Structured Settlements, Inc. and Wilcac Life Insurance Company sues Nassau County 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. The Infants Compromise Order from the settlement required the parents to provide annual proof that there son was alive and notice within 4 days of death.

Structured Settlement Watchdog starts an ethical discussion about the right way and the wrong to buy structured settlement payment rights by settlement planners and structured settlement brokers after accidentally discovering a Broward County deal assigned to a structured settlement broker and settlement planner originated at a less than competitive rate to the seller.

The Department of Justice published its 2019 list of Annuity Brokers. Possibly in response to the number of plaintiff only brokers on the list, of special note is that the nature of the list (and the ramifications concerning the under penalty of perjury declarations of "doing substantial defense work in each of the preceding 3 years)  are stated in more explicit detail than ever before in the current memorandum. " Any broker being considered for selection should be required to verify at the time of selection that he or she meets the minimum qualifications set forth in 28 C.F.R. § 50.24(a) and is otherwise competent to provide structured settlement brokerage services to the United States.

It was announced that SFA is folded into Arcadia Settlements effective January 1, 2020.

Former NSSTA President an industry legend Joseph M. O'Reilly passed December 20, 2019.

 

 

 

 

 

 

Market Based Structured Settlements | What's in Chronovo's Troll Blog Post? A Dreadfully Misinformed Excited Utterance

by Structured Settlement Watchdog

In  "What’s in the name? An oxymoron and a dangerous deception", Chronovo Settlement Consultants recklessly published a spooky blog by its Managing

Market Based Structured Settlements Are Part of Today's Prime Time Line Up

Director**, Christy Rivera (nee Carone) on Halloween, that reads like someone having been "jilted" at the settlement altar, whose authority is undermined by a critical missing piece of essential knowledge. 

"Jumped The Shark"

Says Christy Rivera, the intent punctuated by an image of a shark shaped shadow moving through a school of fish, "Some settlement planners believe they’ve found a way for injured plaintiffs to receive the tax-free status of a structured settlement while also participating in market-based investments. Settlement planners are now encouraging personal injury victims and their attorneys to invest in new, market-based financial products loosely referred to as “market-based structured settlements.” However, since these products lack all the critical features of a structured settlement, the misnomer is dangerously misleading".  Source: Chronovo website October 31, 2019.

According to the footer to the article it says that Ms. Rivera brings 20+ years of experience to her position as Chronovo Managing Director. My math says that Rivera has been in the settlement business since at least 1999. 

An IRS Private Letter Ruling 199943002 was published on October 29, 1999. For those paying attention, the actual question raised in the submission for what became IRS Private Letter Ruling 199943002 was:

Whether periodic payments of damages that are calculated pursuant to an objective formula based on the performance of the Standard & Poor’s 500 Stock Index and/or a mutual fund portfolio designed to achieve long-term growth of capital and moderate current income are "fixed and determinable as to amount and time of payment" under § 130(c)(2)(A)

The settlement agreement will require the defendant to make periodic payments both of a specified dollar amount (specified payments) and of a variable amount (variable payments) due on specific payment dates. The amounts of the variable payments will be calculated pursuant to an objective formula based on the performance of the Standard & Poor’s 500 Stock Index and/or a mutual fund portfolio designed to achieve long-term growth of capital and moderate current income. Under the objective formula the variable payments will increase if the net investment return of the portfolio is greater than the period equivalent of an assumed annual investment rate of percent and assumed annual equivalent expense charges of percent; will decrease if the net investment return is less than the period equivalent of percent; and will remain the same if the net investment return just equals the period equivalent of percent.

MetLife offered a variable structured settlement product called Settlement Plus for a period of time starting in 2000.  A firm that Rivera was formerly associated also offered market based structured settlements at the time of association.

According to Sean Coleman, President and CEO of Structures, LLC

Settlements Plus™ is the next evolution of structured settlements, created as a valuable tool to augment a fixed annuity-based structured settlement when discretionary dollars are available. It offers attractive options for large-dollar settlements while providing the defendant/insurer with a full release and elimination of contingent liability. A market-based solution is not the right fit for every plaintiff, but for those with discretionary settlement dollars, it can help provide a solid solution for resolving a claim. (emphasis added)

IRC Section 130(c)(2)(A) requires payments be “fixed and determinable as to the amount and time of payment”.• Internal Revenue Service refined definition in a series of private letter rulings. PLR 199943002 (variable annuities) and 201435006 (fixed annuity with index-linked adjustment rider).• Fixed obligations must be set forth in the terms of the settlement agreement; and determinable payments that can be calculated based on an objective formula.

Units: Settlement dollars are allocated as $10 units and the unit value at the time payments are due is determined by the underlying investment. At the time of the settlement the plaintiff decides how many units are to be paid and when. Payment options include quarterly, semi-annually, annually and/or lump sums. Example: $250,000 ÷ $10 = 25,000 units

Rivera's post defies Chronovo's marketing message which emphatically states "The “new time” in structured settlements has become its primetime standard. 

If you label yourself a structured settlement consultant you owe it to your clients to be familiar with the "primetime line-up" and to stay current. The financial services industry of which the structured settlement and settlement planning industry is a component is dynamic. 

**Update: Chronovo has removed the troll post by Christy Rivera, who apparently has left Chronovo for another structured settlement brokerage firm.  4/15/2020

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Structured Settlement Firm Undergoes "Typosuction", Doctor Emmett Brown Is Speechless!

by Structured Settlement Watchdog

And so it begins...seen today in meta description in a Google search for structured settlement tax benefits from one of my industry colleagues:

"Encouraged by the U.S. Congress since 19821, structured settlement annuities ("structured settlements") can offer an income-tax-free investment opportunity to..."

When reached for comment in the "Paleo dietetic structured settlement era", Back to The Future's Dr. Emmett Brown was lost for words. But every picture tells a story...

Transamerica Structured Settlements Now Being Serviced by Alliance One Services, Inc. Nashville

by John Darer CLU ChFC MSSC CeFT RSP CLTC

In May 2017 Insurer Aegon NV (AGN.AE) agreed to sell its two largest U.S. runoff businesses, the payout annuity business, inclduing structured settlement annuities and the bank owned/corporate owned life insurance business to its peer, Wilton Re. Under the terms of the agreement, Aegon's Transamerica life subsidiaries will reinsure $14 billion of liabilities to affiliates of Wilton Re U.S. Holding Inc. AEGON stopped writing structured settlements more than a decade ago.

Wilton Reassurance Company, is a Minnesota domestic life insurance company.  It acquired several AEGON assignment companies that were used for qualified assignments for structured settlements funded by life insurers in the AEGON family. 

Annuitants and payees of structured settlements funded with annuities funded by Transamerica Life Insurance Company, Transamerica Financial Life Insurance Company or Transamerica premier Life insurance Company will find new assignment companies names. For example Transamerica Annuity Service Corporation (TASC) is now Wilton Re Annuity Service Corporation.

The notice to payees sent in late May 2018 states that the sale and the change of name will not affect the rights and benefits that you receive under any policy or contract from the above Transamerica Life Insurance companies.

Wilton Re has hired Alliance One Services Inc. as a third party adminstrator for the run off block of business.  Alliance One operates out of Nashville, TN. The customer service number remains the same as it was under AEGON, namely 800-866-0002.  Business hours for Alliance One are 9-4pm Central Time.

The Hartford sale of Talcott Resolution was completed | Annuity, Structured Settlement, Life Run Off

by John Darer CLU ChFC MSSC CeFT RSP CLTC

The Hartford sale of Talcott Resolution was completed on May 31, 2018

Hartford Financial Services Group announced on December 4, 2017 that  it would sell its life and annuity run off unit to a group of investors for $2.05 billion, as it looks to focus on its property and casualty businesses.  Talcott Resolution is the run off company for Hartford's legacy life and annuity business. including structured settlement annuities (which Hartford Life stopped writing in April 2012). The investor consortium led by Cornell Capital, Atlas Merchant Capital LLC, TRB Advisors LP, Global Atlantic Financial Group, Pine Brook and J. Safra Group.  The Hartford retains a 9.7% stake in the new company.

Approximately 375 Hartford employees have become employees of the standalone entity, which will be based in Windsor, CT and will have an office in Woodbury, MN.

Talcott Resolution will reinsure a portion of its fixed annuity, payout annuity and structured settlement businesses to a subsidiary of Global Atlantic Financial Group (Global Atlantic). Hartford Investment Management Company (HIMCO), The Hartford’s investment management group, will continue to manage a significant majority of Talcott Resolution’s investment assets for an initial 5-year term. HIMCO also will be retained by Global Atlantic to manage certain assets associated with the post-closing reinsurance agreement.

Who is Global Atlantic Financial Group?

Global Atlantic was founded in 2004 at Goldman Sachs and entered the Life and Annuity market by acquiring Commonwealth Annuity and Life Insurance Company (formerly Allmerica Financial) in 2005. The business grew through a series of reinsurance transactions and acquisitions of U.S. life insurance companies. Today, the Global Atlantic Life business is recognized for its innovative insurance, reinsurance and strategic solutions to the life and annuity industry. In 2005, Global Atlantic entered the Property & Casualty business and has since grown this platform with the launch of a Lloyds of London insurance syndicate in 2008 and, the acquisition of the Bermuda-based operations of Ariel Re in 2012. Today the Property & Casualty business provides a broad range of solutions to clients for losses caused by natural disasters and other catastrophic events.

Read my December 5, 2017 post The Hartford Sells Life and Annuity Business to Investors

General Electric | GE Capital Must Keep Structured Settlement Promises to Injury Victims

by Structured Settlement Watchdog®

What's Going on With General Electric?

General Electric Co is working with investment bankers to find ways to shed its insurance business, which has caused it to book hefty charges while sparking shareholder lawsuits and an investigation by U.S. regulators, people familiar with the matter said on Tuesday May 22, 2018, according to CNBC. The move comes after GE announced in January it would take a $6.2 billion after-tax charge and set aside a further $15 billion in reserves to help cover liabilities in insurance operations held by its GE Capital unit, mainly concerning long-term care (LTC) policies. Many providers of LTC insurance, including GE, underestimated the cost of servicing policies, meaning premiums have been unable to cover the spiraling costs of healthcare and longer life expectancy. While GE's insurance operations has stopped generating new business, existing contracts managed to maturity in a process known as run-off have become a major financial burden for the U.S industrial conglomerate. GE is hoping investment firms which specialize in acquiring run-off insurance businesses could buy some of the assets, the sources said. While GE is focused on shedding its troubled LTC business, it is open to divesting other insurance assets, including structured settlements and other life and disability products, the sources added.

The sources, who CNBC  reported asked not to be identified because the matter is confidential, cautioned that no deal is certain given the liabilities that GE faces in its insurance business. A GE spokeswoman declined to comment.

GE spun out much of its insurance business in 2004 into Genworth Financial, itself currently attempting a sale to China Oceanwide Holdings Group Co for $2.7 billion. That deal has been held up by the Committee on Foreign Investment in the United States, a U.S. national security panel.

GE said in January a review of its remaining insurance portfolio showed 300,000 policies needed $15 billion more in reserves to cover potential payouts, or about $50,000 per policy, on top of the charge it took as part of its fourth-quarter earnings. It subsequently disclosed the U.S. Securities and Exchange Commission (SEC) had begun probing how it handled its insurance obligations. Insurance liabilities stood at $38 billion at the end of 2017, according to GE's annual report.

General Electric and Structured Settlements

General Electric entered the structured settlement business just after Executive Life and ELNY were taken over by regulators. In 1993, GE Capital purchased Great Northern Insured Annuity Corporation (GNA) and its New York subsidiary from Weyerhauser, for $525 million and United Pacific Life for $550 million from Reliance Holding.  In a contemporaneous GE press release sourced from UPI, dated April 5, 1992, George Wendt, then GE President and CEO said "The combination of UPL and GNA will mean that we will have an organization with unparalleled marketing capabilities and more than $12 billion in assets. The acquisitions were rebranded GE Capital Assurance Company and GE Capital Life Assurance Company of New York. In 1994, GE Capital acquired AMEX Life Assurance a leader in  long term care. In a contemporaneous 1995 New York Times report, Oppenheimer analyst Eric N. Berg opined, "GE Capital stands out among the hundreds of life insurers vying for attention and trying to sell retirement and savings products to the aging baby boom generation.The companies that will do best are those that have financial strength, that are technologically adept and have a broad-based distribution strategy." GE Capital, Mr. Berg said, is well positioned on all counts".

GE Capital Corporation Guarantee and Keep Well Agreement

United Pacific Life was a minor structured settlement player and outside bank insurance platforms, GNA was a relatively unknown insurer diving into the deep end of a structured settlement pool to compete with then 130-140 year old giants such as New York Life Insurance Company and Metropolitan Life Insurance Company. GE Capital took care of that with the GE rebranding.  General Electric, in the 1990s was the only company that had remained on the Dow Jones Industrial Average since 1896 and at the time was known for its memorable tag line "We Bring Good Things to Life". Motivated by the need to provide consumer confidence and to capitalize on the GE Brand, GE Capital issued structured settlements with both a Keep Well Agreement and a Guarantee from GE Capital Corporation to back up its qualified assignment company GE Capital Assignment Corporation  (GECAC).

The GE Capital Corporate guarantee expressly states  that "the obligations of the guarantor will not be affected, impaired or discharged, in whole or in part, by any circumstances which might otherwise constitute a legal or equitable discharge or release of a guarantor. The guarantor waives notice of acceptance of this guarantee and any and all notices of the creation, renewal, extension or accrual of any of the obligations of GECAC guaranteed hereby and  eaives notice of or proof of reliance by any claimant".  The guarantee also expressly states that "the obligations under the guarantee are in addition to, and not in substitution for, the obligations of the guarantor to GECAC under that certain Keep Well Agreement".

The GE Capital obligation appears to be transparent, in stark contrast to what was learned about Aviva with respect to Aviva's Capital Maintenance Agreement, after Aviva divested itself of its United States operations in 2013. The latter led to a class action lawsuit against Aviva and Athene Holdings, which acquired Aviva USA and the end result of that suit, a negotiated settlement, was favorable to annuitants. Nevertheless the Aviva experience is a valuable lesson to insurance regulators, who would have to examine and approve any sale or divestiture of GE insurance obligations, including structured settlement obligations, and were clearly napping on the Aviva/Athene deal.  Fortunately the situation was resolved favorably and there was no insolvency.

When GE spun off its GE Financial Assurance( GEFA) division, now Genworth, it used the slogan "Built on GE Heritage" in the transition. While GE has done many good things, part of that heritage is an unbelievably racist General Electric advertisement featuring an African American child eating fried chicken.  I suspect that among those that GE Capital has structured settlement obligations to include disabled descendants of the the folks that GE targeted in that ad. Don't Mess with the Disabled GE!  Do the right thing and keep your promises as you have been doing.

 

GE Capital Guarantee issued with each Structured Settlement Annuity owned by GE Capital Assignment Corporation

Keep Well Agreement Issued With Each Structured Settlement Annuity Owned by GE Capital Assignment Corporation

Aviva Structured Settlement CMA Class Action Settlement | Aviva Annuitants to Be Noticed

by John Darer® CLU ChFC MSSC CeFT® RSP CLTC

What was the Aviva Structured Settlement CMA Class Action all About?

This Aviva Structured Settlement class action was brought on behalf of several thousand Americans who between 2002 and 2009 became the beneficiaries of Structured Settlement Annuities (“SSAs” or “the Annuities”) issued by what was then Aviva Life Insurance Company  (or its predecessor) and Aviva Life Insurance Company of New York (or its predecessor),  both of which were during that period subsidiaries of Aviva plc (or its predecessor) , a British corporation based in London, England. The Annuities were backed by a Capital Maintenance Agreement (" CMA") issued by CGU, which was
at that time also an Aviva plc subsidiary. The CMA required CGU to ensure that the entity responsible for making payments under the Annuities had sufficient assets to do so. Aviva ceased selling SSA’s in 2009.

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Aviva produced sales brochures and issued thousands of policies that misrepresented the CMA  to it's own appointed agents and to consumers that the CMA "... obligation shall be absolute, unconditional, present and ongoing" and authorized its agents to distribute them to consumers, their attorneys and to judges in infant compromise hearings. It was an outrageous act of deception. Fortunately there now is a happy ending. Upon information and belief, Aviva collected in excess of $1 billion in premium from 2002-2009 while concealing material facts about the actual CMA from its appointed agents, consumers and even its many of its own employees that interfaced with its agents.  In the opinion of this author, had the facts concealed by Aviva been known, a lot of annuity business would not have been placed with Aviva.

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In 2012 Aviva agreed to sell its entire North American business to Athene Holding Ltd. ("AHL"). Shortly before that transaction closed on October 2, 2013,
the parties to the CMA (which at that time were both subsidiaries of Aviva plc) agreed to modify it to permit termination, and then to terminate
it effective upon the closing. Annuitants were not noticed.

Defendants Point Fingers At Each Other

Aviva asserted that it acted within its rights, and pursuant to the terms of the CMA (the full details of which again, were deliberately concealed from annuitants and its agents and many front line employees by being omitted from its CMA brochure) and applicable law, by taking these steps to terminate the CMA with AHL’s knowledge in connection with the sale of Aviva’s US operations to AHL.

The Athene Defendants asserted that they did not know that Aviva had modified and terminated the CMA until after the October 2, 2013 closing, and that they did not agree to Aviva’s modification and termination. Defendants contend further that, in light of various steps they took to ensure the solvency of the Athene entity that would be responsible for making payments on the Annuities after October 2, 2013, the Plaintiff and putative class was not damaged by
the modification and termination

Plaintiff denies both of these propositions. Plaintiff maintains that the termination of the CMA was improper and that no actions taken by
Defendants prior to the institution of this Action adequately protected Plaintiff, and members of the putative class, from the negative impact of the termination of the CMA.

Terms of Settlement

• Requires Athene Defendants to create a new Capital Maintenance Agreement which replicates, and then improves upon, the terms of the CMA whose purported cancellation is at issue in this case. This new CMA will be backed by Athene Holding Ltd., the ultimate, publicly traded, corporate parent of all other Athene Defendants.  Plaintiffs' expert has opined that the entity that will issue the new CMA is better capitalized than CGU. 
• It provides cash relief in amounts totaling at least $7.3 million.
• It requires Defendants to pay the costs of notice and settlement administration up to a total of $200,000 (up to $100,000 for each of the Athene and Aviva
  Defendants), as well as up to an additional $12,500 from each Defendant group for a service award, if approved by the
  Court, to be paid to the named Plaintiff, John Griffiths.
• It provides for an additional payment by Aviva of 25% of any amount it obtains in resolution of any claim it files against the Athene Defendants for indemnification in connection with the acts at issue in the Amended Complaint.

The Settlement Class

All beneficiaries of structured settlement annuities assigned to Athene London Assignment Corporation (formerly known as Aviva London Assignment Corporation and as CGNU London Annuity Service Corp.), which includes all annuities covered by the Capital Maintenance Agreement between CGU International Insurance plc and CGNU London Annuity Service Corp. dated February 1, 2002, where such annuities remained in force as of October 2, 2013.

Excluded from the proposed class are the officers and directors of any Defendant and members of their immediate families and any entity in which any Defendant has a controlling interest, the legal representatives, heirs, successors or assigns of any such excluded party, the judicial officer(s) to whom this action is assigned, and the members of their immediate families.

Case Reference

John W. Griffiths, on behalf of himself and all others similarly situated, Plaintiff v Aviva London Assignment Corporation, Aviva Life Insurance Company, Aviva International Insurance Ltd f/k/a CGU International Insurance, plc, Athene Holding, Ltd, Athene London Assignment Corporation and Athene Annuity and LIfe Company, Defendants   United States District Court for the District of Massachusetts Civil Action 15-cv-13022-NMG

Read my coverage about Aviva Structured Settlements

 

The Hartford Sells Life Insurance and Annuity Business to Investors

by John Darer® CLU ChFC MSSC CeFT® RSP CLTC

Hartford Financial Services Group announced on December 4, 2017 that  it would sell its life and annuity unit to a group of investors in a deal valued at $2.05 billion, as it looks to focus on its property and casualty businesses.  Talcott Resolution the run off company for Hartford's legacy life and annuity business. including structured settlement annuities which its stopped writing in April 2012, will be acquired by an investor consortium that includes Cornell Capital, Atlas Merchant Capital LLC, TRB Advisors LP, Global Atlantic Financial Group, Pine Brook and J. Safra Group.

Talcott Resolution to be run as a stand alone company

Talcott Resolution will now be run as a standalone insurance company, according to reports, in a deal expected to close in the first half of 2018, subject to regulatory approval.  Approximately 400 Hartford employees will become employees of the standalone entity

Talcott Resolution will reinsure a portion of its fixed annuity, payout annuity and structured settlement businesses to a subsidiary of Global Atlantic Financial Group (Global Atlantic), according to Insurance News Net. Following the sale, Hartford Investment Management Company (HIMCO), The Hartford’s investment management group, will continue to manage a significant majority of Talcott Resolution’s investment assets for an initial 5-year term. HIMCO also will be retained by Global Atlantic to manage certain assets associated with the post-closing reinsurance agreement.

What Does This Mean to Hartford Life Structured Settlement Annuitants?

If you have Hartford Life Structured Settlement it likely owned by Hartford CEBSCO. The Annuity Issuer is Hartford Life Insurance Company. The obligations of Hartford CEBSCO are guaranteed by Hartford Life, Inc. According to the executive presentation on December 4, 2017, slide 4,  Hartford Life, Inc., Hartford Life Insurance Company will be part of the Talcott deal. I will research, inquire and provide readers with further details as the deal progresses. As always, feel free to contact me with any questions at 888-325-8640

Talcott Resolution 2021 Update

Talcott Resolution Announces Completion of Acquisition by Sixth Street (prnewswire.com)

 

 

 

Athene Settles Class Action Re Nix of Aviva Structured Settlement Capital Maintenance Agreements

by John Darer CLU ChFC MSSC RSP CLTC

Relief for Aviva (Now Athene) structured settlement annuitants. Details to follow

Defendants Athene London Assignment Corporation (f/k/a Aviva London Assignment Corporation), Athene Holding Ltd. (“AHL”) , and Athene Annuity and Life Company (successor to Aviva Life Insurance Company) (collectively, “Athene Defendants”) and Plaintiff John W.Griffiths have reached a class-wide settlement (“Settlement”) of the structured settlement class action, subject to approval by the Massachusetts District Court and the Board of Directors of AHL. According to papers submitted to Court on September 28th, the remaining Defendant, Aviva International Insurance Limited (f/k/a CGU International Insurance, plc)(“CGU”), is engaged in active settlement discussions with Plaintiff, and the parties hope to obtain a global resolution of this matter. Details to follow.