by John Darer® CLU ChFC CSSC RSP CLTC
A Letter to the Editor, by a former Maryland Insurance Commissioner Dwight K. Bartlett, III, to the Washington Post on August 28, 2015, reveals that unsuccessful efforts were made more than a decade ago to create an enforcement component to the Maryland structured settlement protection act to provide greater protection to Maryland residents.
Lack of regulation of any solicitors of structured settlement annuitants for their structured settlement payment rights and the sales practices of those solicitors is one of the major flaws in structured settlement protection acts around the country.. Unlike any other major providers of financial services (accounting, insurance, securities, real estate, banking) there is no licensing and no regulation over how prospects to sell structured settlement can be approached. When you need a license on the original placement of a structured settlement annuity, why is one not required to approach, advise buyers or sellers and/or implement the sale of structured settlement payment rights?
In September 2014, Access Funding, the Chevy Chase company that is the target of the Washington Post expose and Congressional investigation made outrageous false and misleading advertising claims that went unpunished, advertising an "NSSTA Financial Solutions Program" that falsely implied that it had a "dedicated internal NSSTA staff to insure the highest level of customer service". The bogus Access Funding lie was quickly rubbished by the NSSTA.
Former Maryland Insurance Commissioner from 1993 to 1997, Dwight Bartlett, writes this:
"I tried to build support for proper regulation of the structured settlement industry a decade or so ago. I was unsuccessful, even in my actuarial profession. Specifically, I proposed that prospective purchasers of a structured settlement for a lump sum be required to tell the beneficiary seller what the proposed lump sum purchase payment was equivalent to in the number of future years and months of the monthly structured settlement payments, discounting the future payments of some appropriate annual discount rate, such as 5 percent. The beneficiary seller then could make a judgment as to the reasonableness of the proposed lump sum payment based on his or her self-assessment of the likely number of future payments he or she would receive under the structured settlement. The appropriate state agencies to enforce this requirement would perhaps be the state insurance departments, as the requirement parallels similar requirements for the sale of life insurance policies.
Terry McCoy's Washington Post expose alleging predatory behavior against young Afro-Americans, who received structured settlements as compensation for physical injuries or physical sickness related to lead paint poisoning in inner City Baltimore housing, is galvanizing Maryland lawmakers and inspiring a Congressional investigation. But it should also be galvanizing people like Al Sharpton, Rev. Jesse Jackson and other minority leaders because it's likely that their constituents in New York and elsewhere are being victimized by the lack of regulation.
Any new regulation should not simply focus on forum shopping and mandatory personal appearance in transfer hearings. How solicitors of annuitants hold themselves out must be regulated. All too often one can find settlement purchasers or their representatives, without licenses, holding themselves out by the same terms used by licensed insurance agents or financial advisers. There need to be clearly defined terms so that consumers can make a clear distinction.
Comments and Trackback Policy