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

Typepad Resolves Service Issues Encountered During Data Center Migration

by John Darer CLU ChFC MSSC CeFT RSP CLTC

Readers may have encountered  difficulty in accessing the blog at times during  the latter part of October 2022 while the blogging service we use was migrating to a new data center, a process which was completed on Sunday October 30, 2022.

Here is an excerpt of the official announcement from Typepad to blog owners:

"Over the past few weeks, Typepad has experienced a number of complications that have compromised the level of service that we know you have come to expect. This started occurring as we prepared to move to a new data center. The migration was completed on Sunday, and Typepad is now in its new home. However, following the migration, we encountered a number of unexpected problems that took some time to address. We have had our team working around the clock to get service restored. Thankfully, we are seeing progress. Now that we are able to deliver consistent service, we will use the new resources to address any lingering issues that may be occurring".

I'm now into my 18th year of blogging with over 5,300 posts on this blog alone and more than 1,220,000 net page views. I appreciate you.  My readership is important and hope you will continue to enjoy my brand of commentary.

Structured Settlement 4Real Blog Reaches 1 Million Page Views

Thank You Readers!

Aviva/Athene Class Action Settlement | What Attorneys Should Know If a Client Calls

by John Darer CLU ChFC MSSC RSP CLTC

The Aviva/Athene class action settlement checks have been mailed and some attorneys may be puzzled by calls from their clients. 

Aviva /Athene CMA class action settlement checks have been mailed

First of all I encourage: you to read my May 9, 2018 post on Settlement News Network blog

Do You Have an Aviva or Athene Structured Settlement?

If you want a deeper dive please read my Aviva Structured Settlements coverage on the Structured Settlements 4Real blog.

A few bullet points to distill:

• Aviva did not go out of business
• Aviva sold its USA operations to Athene Holding with that deal closing in October 2013.
• There are no solvency issues for Aviva or Athene. In fact the successor insurer to Aviva following the sale was upgraded by A.M. Best in the interim. A.M. Best affirmed Athene's upgraded ratings in 2018.
  
• The Capital Maintenance Agreement that cost $500 dollars to provide greater peace of mind, when their structured settlement was established between 2002-2009, was unilaterally terminated without notice to annuitants at or about the time of the 2013 closing of the Aviva/Athene deal. Both insurers concealed the the information from their annuitants. Moreover, material facts about the CMA were concealed by Aviva from its agents and even front line employees and, according to Court documents filed by Plaintiffs, discovery revealed that all wasn't what its seemed.
• Fortunately lead plaintiff John Griffiths and I got ahead of the story by making the discovery in the Fall of 2014 and the class action filed by the Philadelphia law firm of Marcus and Auerbach in July 2015 led to what can only be seen as a positive result for over 4,000 annuitants. Once again nobody lost money, no money was in imminent danger and this was nipped in the bud.

 

 

 

Reimagining The Structured Settlement Factoring Industry

by Structured Settlement Watchdog

As I enter my 14th year of pro bono work as the Structured Settlement Watchdog this coming week, while closing in on 5,000 published blog posts on Structured Settlements 4Real, it was a treat to receive the following from someone until recently associated with the structured settlement factoring industry.

"It wasn't easy but after many years I was able to escape the type of work that I had been trained to do in the world of transferring structured settlement payment rights. Since I have moved on, I have come to appreciate much of what you have boldly posted about that world...and a lot of it is quite ugly. I don't know if anybody who was on the "other side" ever thanked you for sticking to your guns and saying it like it is but, from me, thanks. I've switched my views and a lot of what you posted challenged me to rethink what I had been taught"

 

 

 

Estimate Affordable Care Act Credits and Payments Using New IRS Tool

by John Darer® CLU ChFC CSSC RSP CLTC

The IRS has introduced, an online tool to help individuals and employers to estimate Affordable Care Act (ACA) Credits and Payments, through its Taxpayer Advocacy Service.

IRC 5000(a) provides, in part:

(a) Requirement to maintain minimum essential (medical) coverage

An applicable individual shall for each month beginning after 2013 ensure that the individual, and any dependent of the individual who is an applicable individual, is covered under minimum essential coverage for such month.

 

(b) Shared responsibility payment

 

(1) In general

If a taxpayer who is an applicable individual, or an applicable individual for whom the taxpayer is liable under paragraph (3), fails to meet the requirement of subsection (a) for 1 or more months, then, except as provided in subsection (e), there is hereby imposed on the taxpayer a penalty with respect to such failures in the amount determined under subsection (c).

(2) Inclusion with return

Any penalty imposed by this section with respect to any month shall be included with a taxpayer’s return under chapter 1 for the taxable year which includes such month.

 

(c) Amount of penalty

(1) In general the amount of the penalty imposed by this section on any taxpayer for any taxable year with respect to failures described in subsection (b)(1) shall be equal to the lesser of

(A) the sum of the monthly penalty amounts determined under paragraph (2) for months in the taxable year during which 1 or more such failures occurred, or

(B) an amount equal to the national average premium for qualified health plans which have a bronze level of coverage, provide coverage for the applicable family size involved, and are offered through Exchanges for plan years beginning in the calendar year with or within which the taxable year ends.

The Taxpayer Advocate Service has developed several tools for individuals and businesses to assist with estimating their Affordable Care Act (ACA) related credits and payments.

The Premium Tax Credit Change Estimator can help you estimate how your premium tax credit will change if your income or family size changes during the year. This estimator tool does not report changes in circumstances to your Marketplace. To report changes and to adjust the amount of your advance payments of the premium tax credit you must contact your Health Insurance Marketplace. Be sure to report all changes directly to that Marketplace because they can affect both your coverage and your final credit when you file your federal tax return.

The Individual Shared Responsibility Payment Estimator can help you estimate the amount you may have to pay if you did not have minimum essential coverage during the year. This tool can only provide an estimate of your individual shared responsibility payment. To determine the payment when you file your tax return, use the Shared Responsibility Payment Worksheet in the instructions for Form 8965.

Because these tools provide only an estimate, you should not rely upon them as an accurate calculation of the information you will report on your tax return. You should use these estimators only as a guide to assist you in making decisions regarding your tax situation.

The Structured Settlement Watchdog® by the Structured Settlement Watchdog

What's it all about structured settlement watchdog?  Well, I'll tell you, in my own words.  In the following video I discuss my role as structured settlement industry watchdog, one that I have played voluntarily for nearly a decade.

Video Updated January 2021

SellingSS.Com Glossary So Bad It's Comical | Structured Settlement Social Media Road Kill

by Structured Settlement Watchdog

I don't blame the anonymous registrant of SellingSS.com for "having a bag over their head", their glossary is so bad. What it is not in the best interest of consumers and highly suspect, in my opinion, is when bogus content produced by or on behalf of the "bag heads" is is "thought to be so good" that it is shared 4,374 times on Facebook, Tweeted 5,166 times, Pinterest 4,277,  but remarkably not once on the professional business network Linkedin. Research conducted using ahrefs.com and majesticseo, reveals sellingss(dot) com is promoted by 2,500 non-relevant  back links created since late January 2014, primarily from forum spam, several of which are ironically labeled "End of Reality".

Let the "shredding" begin:

1. Annuity

Sellingss.com:  

" a pre-determined monetary sum that the holder receives every few months.

Structured Settlement Watchdog:

An annuity is a contract is created when an insured party pays a life insurance company a single premium that will later be distributed back to the insured party over time in a variety of possible payment modes.   In a structured settlement context, an annuity is generally a form of "qualified funding asset"[defined in IRC 130(d)] used as part of the structured settlement process,  to fund future periodic payment obligations to a plaintiff or payee  by a defendant, respondent, the defendant's or respondent's insurer, or a qualified settlement fund, that are part of the consideration for the settlement of  a legal dispute.  The "holder"of a structured settlement annuity, generally a qualified assignment company, is not the payee. The payee is the "holder"of the right to receive structured settlement payments. Payment modes of a structured settlement annuity may contain immediate and/or deferred elements in multiple payment streams in a single contract. Note the difference.

2. Assed-Backed Security

Sellingss.com:  

"Another name for structured settlements".

Structured Settlement Watchdog:

Bollocks bolognaise!   

3. Broker

Sellingss.com:  

"An intermediary who arranges the flow of money between the holders who are selling their strustured (sic) settlement annuities and the buyers"

Structured Settlement Watchdog:

In the primary market a broker is the licensed insurance individual or entity, regulated in the states he, she or it is licensed in,  legally obligated to ongoing professional education and ethical responsibilities, who acts as an intermediary in the sale and placement of regulated insurance products (such as structured settlement annuities) from insurance companies   he, she or it is authorized to sell.  

In the secondary market a broker is an unlicensed, mostly unregulated intermediary who facilitates the transfer of structured settlement payment rights (NOT structured settlement annuities).

4. Catastrophic Injury Case

Sellingss.com:  

 "A case involving chronic personal injury".

Structured Settlement Watchdog:

Chronic is  a medical term to describe a long lasting disease.  Catastrophic injury means “consequences of an injury that permanently prevent an individual from performing any gainful work.”(42 USCS § 3796b).  Unless you are a total klutz or have a run of  incredible bad luck you cannot have "chronic personal injuries"

5.  Death Benefit

Sellingss.com:  

 "Payments that go to beneficiaries named by the annuity holder should the holder die."

Structured Settlement Watchdog:

The payment made to a beneficiary from an annuity or life insurance policy when the measuring life dies. Also called survivor benefit. In the structured settlement context the annuity owner, or holder of the annuity policy is generally the qualified assignment company.  In the absence of an irrevocable designation at the time of settlement,  it is generally the Payee who selects the beneficiary with authority conferred in the settlement agreement and release.

6.  Defendant

Sellingss.com:  

 "A person charged with a crime"

Structured Settlement Watchdog:

A defendant in a civil case IS NOT charged with a crime. A defendant in civil litigation is NOT incarcerated and never executed. In general, a losing defendant in civil litigation only reimburses the plaintiff for losses caused by the defendant's alleged acts. A successful plaintiff must prove liability and damages.

7. Factoring Companies

Sellingss.com:  

 " Companies that buy annuities in lump sums"

Structured Settlement Watchdog:

In a structured settlment context, factoring companies purchase structured settlement payment rights. Factoring companies do not buy annuities in the structured settlement context despite the proliferation of intentionally misleading and deceptive advertising that has plagued theh secondary market segment.

8. National Structured Settlement Trade Association

Sellingss.com

"A government resource for individuals and professionals in the structured settlement industry"

Structured Settlement Watchdog:

The National Structured Settlements Trade Association (NSSTA) is not a goverment resource. It is funded by dues collected by its members who are primarily licensed insurance agents and brokers whose business includes the placement of structured settlement annuities and other related settlement planning products as well as product providers.

9. Personal Injury Lawsuit:

Sellingss.com

"A lawsuit in which people seek annuity payments"

Structured Settlement Watchdog

 

A lawsuit brought by or on behalf of a person who has suffered  a personal injury to recover damages.  A lawsuit can also be brought by parties with a derivative cause of action. I'll goout on a limb and state that an annuity payment is probably the farthest thing from the plaintiff's mind when the lawsuit is filed.

 

10. Structured Settlement:

Sellingss.com

"Regular annuity payments dispersed according to holder agreement"

Structured Settlement Watchdog

 

Structured settlement payments are made in accordance with a schedule of periodic payments set forth in the settlement agreement and release  (sometimes referred to as a "Release and Settlement of  All Claims") and, if the periodic payment obligation is assigned,  in accordance with the qualified assignment agreement.  An annuity is one type of so-called " qualified funding asset", the other option being obligations of the United States government. In either case the "holder" of the qualified funding asset is the qualified assignment company. There is no such thing as  a "holder agreement" when it comes to setting up structured settlement.

 

Strictly speaking a structured settlement is defined under the Internal Revenue Code at  IRC 5891(C)(1). For a real world explanaton of structured settlements, please click here

 

For a comprehensive structured settlement glossary and glossary of settlement planning and financial planning terms please click here

 

 

Stratcap Structured Settlement Roundtable-Commentary-1

by John Darer CLU ChFC MSSC RSP CLTC

Strategic Capital has published a so-called Structured Settlement Roundtable featuring Cincinnati attorney  Joe Dehner, Dallas attorneys Matt Bracy and Earl Nesbitt who are partners in Nesbitt Vassar & McCown LLP,  California attorney Eugene Ahtirski, S2KM President Patrick Hindert and Stratcap's Terry Taylor Several months ago I was approached by a man conducting the survey for Stratcap,  to give my opinions concerning selling structured settlement payments for Stratcap's roundtable and I declined because I simply do not want to endorse Strategic Capital exclusively. There are many fine secondary market choices for consumers who seek them out.

That being said,  the effort to ask the questions is laudable however, I have chosen to be interactive and answer the questions from my own structured settlement blog platform, Structured Settlements 4Real®, as well as deliver commentary on certain of the expert remarks made in Strategic Capital's published structured settlement roundtable report.

Question: What are the pitfalls that people should be careful of when they sell structured settlement payments?

Patrick Hindert fails to get out of first gear by not answering the question in his first three bullet points. Hindert's answers. The question does not pertain to settlement planning. His points that DO address the question are all valid;

1. "A fourth pitfall occurs when individuals sell structured settlement payment rights without first discussing alternatives with financial advisors.
2. A fifth pitfall occurs when individuals sell structured settlement payment rights without soliciting and comparing multiple offers and inquiring about commutation options.
3. A sixth pitfall occurs when individuals compare multiple offers without assistance from advisors who are knowledgeable about transfers and can help negotiate favorable terms including but not limited to price. These terms include the amount and allocation of expenses"

Matt Bracy delivers a concise answer for sellers of structured settlement payments

1. "Sellers of structured settlement payments should carefully consider is whether they depend on the payments being assigned. No one should sell payments that they need in order to make ends meet, or if they are needed for medical treatment or care.
2. When they sell payments, they should match the amount they sell with that need, but no more. Structured settlements provide excellent long-term benefits and should be left intact as much as possible.
3. Very careful planning and consideration should be given to how they will use the money. Every structured settlement seller should develop a detailed plan for the proceeds. This will help when the court considers the sale, and will also help focus the seller on making the best use of his or her resources. When the plan is done, this essential question should be asked: “Will I be better off selling these payments and using the lump sum of money I get in this way than I would be otherwise?” If so, then the sale is a good idea and the process of thinking this through will be useful in court".

Bracy's parther Earl Nesbitt  amplifies Bracy's statement by stating that  structured settlement/annuity payments are a valuable financial asset of the payee.  It is refreshing that Nesbitt does not get caught in the intellectual dishonesty that is frequently exhibited in the secondary market by correctly describing the process of "selling your structured settlement" as  a transfer and assignment of the right to receive future structured settlement payments, as opposed to selling an annuity. After the payment rights are sold the structured settlement annuity is still owned by the same party. the qualified assignment company. Other advice provided by Nesbitt:

1. Nesbitt also admonishes sellers to avoid selling more payments than they need to address their need or achieve their objective with a fudge factor allowance.
2. Don’t let anyone pressure you into a transaction.
3. Read the documents that they send you. There are funding companies, unfortunately, that include provisions in the transaction documents (i.e. rights of first refusal, onerous arbitration provisions requiring arbitration in far away places and impose arbitration fees on the payee, etc., security interests in all of one’s payments, etc.) that should be considered carefully and which might not be beneficial to the payee.
4. Sometimes, the company offering the most money for a particular transaction is still not the payee’s best option. 
5. Review carefully stipulations provided by issuers/obligors. There are indemnity provisions in there that could be problematic in the future.
6. Here's an interesting one that you don't see everyday "Don’t ever advance money to a funding company or a broker who claims that they will help you get your deal approved".
7. As I would expect him to do, given his representation of them, Nesbitt recommends doing business with a funding company that is a member of NASP.

Eugene Ahtirski

1. Mistaken thinking that the sale of structured settlmeent payment streams are a fast and simple procedure  [Isn't that a function of the misleading and false advertising pitches of some that use words like "cash now" to describe cash that is subject to court approval in 30, 60, 90 days or longer?]
2. Mistaken thinking that all purchasers are the same, when the issues of ethics  , customer services and business practices...are vastly different.(emphasis ours)
3. Mistaken thinking that there is a standard discount rate

 Joseph Dehner

1. Not taking the time to think things thorugh
2. failing to consider the meaning of financial terms like present value and interest rate

Terry Taylor

1. Beware fast talking salespeople from call centers with high pressure sales tactics
2. Letting desperation for cash affect your attention to important details

Terry also addresses servicing, although not by name.  the reality is that servicing is a function of whether or not the annuity issuer will dice payments.

John Darer

In addition to some of the well reasoned answers above, much of which I echo, I would add that consumers need to be absolutely sure of who they are dealing with if they are considerings selling structured settlement payment rights:

1. Are they dealing with a real person? One settlement purchasing company CEO has admitted under oath, in a legal deposition,  to creating several fake identities, which were displayed in its Better Business Bureau record,  that were facing consumers like you. the same individual also created fake LinkedIn profiles in which the fake characters endorsed each other in addition to creating Google Plus profiles and Facebook comments that suggested that company was bigger than it actually is.
2. What are the relevant education and financial credentials of the person they are dealing with?  Ask for and check out academic credentials. We've already established that two settlement purchasing companies blatantly faked academic credentials in public facing social media.
3. Are you dealing with an American company registered to do business in your state?  Many companies aren't, leaving you with alot of hassle should you need to seek legal redress if things go wrong. One company claimed to be founded in Maryland but when we checked with the State of Maryland the official records appear to show that not to be the case.
4. Does the company primarily operate from a legitimate office address within the United States, or is its primary advertised address really a mail drop at UPS store or other virtual set up.  The real operations may be in another country.  Just remember that anyone can rent a toll-free number or  a phone number that is in your local area code.
5. Is someone telling you to "move" to another state to do the deal? If yes, is the company or any of its representatives offering to take you around to establish bank accounts and other items to make believe and create the appearnce for the judge reviewing your transaction you are intending to be domiciled in the other state.  If so, you could be engaging in a practice known as forum shopping.  Few people cover their tracks well enough as some rudimentary research appears to show. Note that the United States government has the power to levy a 40% excise tax on the discount charged by the settlement purchaser. The IRS pays finder's fees. Do you want to risk being part of a later govermnent investigation?
6. If a servicing agreement is required because the annuity issuer will not dice payments then ask about back up servicers, who step in if the primary servicer goes down.
7. As idealistic as it may be to consider NASP membership as the "good housekeeping seal of approval",  the recomnendation is a bit Pollyanna. All of the forum shopping cases we have been informed about have involved NASP members.  Upfront disclosures of familial relationships have not been par for the course when certain NASP members interface with potential customers online, or even on the phone.  Moreover, there are also a few non NASP members that we have referred business to from time to time and they have done a good job.
8. Take the Better Business Bureau with a grain of salt, or don't weight it too heavily.  For some settlement purchasers that is all they have and many of them flout their BBB ratings.  When you consider that Sovereign Funding Group is still rated A+ after its CEO David Springer testified June 28, 2013 to providing false information to the BBB, including fabricated company contacts and testified in published testimony, before his attorney advised him to avoid self-incrimination by "taking the 5th" that he impersonated his wife in an online forum because he was not legally allowed to work in the US at the time. As I pointed despite the fact that Springer testified that Melissa Springer, was not involved in the company, her name appeared on the company records with the State of Maryland until July 31, 2013. Many other companies that don't have these issues are also rated A+ and as a result a consumer has no means to differentiate companies that have been more honest than Sovereign Funding Group/David Springer by relying on the BBB ratings alone.  One assumes that the actions that David Springer admitted to in his deposition would be considered dishonest to a reasonable person. As I previously reported,  the BBB of Greater Maryland is taking a wait and see posture on Sovereign Funding Group's rating, pending the outcome of the legal matter of Woodbridge Structured Funding v Sovereign Funding Group and David Springer. The matter is set for trial in May 2014.

 

Structured Settlements 4Real® Blog Breaks Top 30 Avvo Legal Blogs

by John Darer CLU ChFC CSSC RSP CLTC

I'm proud to announce that Structured Settlements 4Real® has made it into Avvo's Top 30 Legal Blogs, based on a 30 day average ending August 12, 2013.

Structured Settlements 4Real®, a publication of 4structures.com LLC and authored by John Darer, provides structured settlement and settlement planning news and commentary in a manner that is informative, irreverent and effective. Over 3600 posts have been published since November 2005.

 

 

Structured Settlements 4Real® Blog 7th Anniversary!

Structured Settlements 4Real®marks the 7th anniversary of its publication on November 12, 2012. Structured Settlements 4Real®.  The John Darer authored blog is now up to close to 3,500 posts since inception. Structured Settlements 4Real offers an informative and sometimes irreverent look at the world of structured settlements, settlement planning and financial planning.

John Darer CLU ChFC CSSC RSP is a New York City/ Connecticut area structured settlement expert and Registered Settlement Planner who shares knowledge, experience and commentary wrought from over 29 years of financial services experience with over 20 years in the settlement industry.

Thank you readers!