by John Darer CLU ChFC MSSC CeFT RSP CLTC
Got a minor's personal injury, medical malpractice or a wrongful death settlement case in New Hampshire, where a minor is a survivor plaintiff?
Structured Settlement Rules for the Superior Court of New Hampshire
111 K. In the event that the parties desire to enter into a structured settlement, which is defined as a settlement wherein payments are made on a periodic basis, the following rules shall also apply:
1. Counsel for the defendant shall provide the Court with an affidavit from an independent certified public accountant, or an equivalent professional, specifying the present value of the settlement and the method of calculation of that value.
2. If the settlement is to be funded by an annuity, the annuity shall be provided by an annuity carrier meeting at least the following criteria:
(a) The annuity carrier must be licensed to write annuities in New Hampshire and, if affiliated with the liability carrier or the person or entity paying the settlement, must be separately capitalized, licensed and regulated and must have a separate financial rating.
(b) The annuity carrier must have a minimum of $100,000,000.00 of capital and surplus, exclusive of any mandatory security valuation reserve.
(c) The petition shall contain the following information about the annuity and the annuity carrier:
(i) a description of the structure of the annuity arrangement;
(ii) a description of the history and size of the annuity carrier and its experience in issuing annuities;
(iii) a certificate from the New Hampshire Insurance Department stating that the annuity carrier is in good standing in New Hampshire;
(iv) whether the annuity carrier is domiciled or licensed in a state accredited by the National Association of Insurance Commissioners under that organization's Financial Regulation Standards program; and
(v) the annuity carrier's most recent ratings from at least two of the commercial rating services listed in subparagraph (d).
(d) The annuity carrier must have one of the following ratings from at least two of the following rating organizations:
(i) A.M. Best Company: A++, A+, A, or A-.
(ii) Moody's Insurance Financial Strength Rating: Aaa or Aa.
(iii) Standard & Poor's Corporation Insurer Claims-Paying Ability Rating: AAA, AA+, AA, or AA-.
(iv) Fitch Duff & Phelps Credit Rating Company Insurance Company Claims Paying Ability Rating: AAA, AA+, AA, or AA-.
(e) The annuity carrier must meet any other requirement the Court considers reasonably necessary to assure that funding to satisfy periodic payment settlements will be provided and maintained.
(f) The annuity carrier issuing an annuity contract pursuant to a qualified funding plan under these rules may not enter into an assumption reinsurance agreement for the annuity contract without the prior approval of the Court and the owner of the annuity contract and the claimant having the beneficial interest in the annuity contract. The Court shall not approve assumption reinsurance unless the reinsurer is also qualified under these rules.
(g) The annuity carrier and the broker procuring the policy shall each furnish the Court with an affidavit certifying that the carrier meets the criteria set forth in subsection (d) above as of the date of the settlement and that the qualification is not likely to change in the immediate future. The broker's affidavit shall also contain the following certification: "This determination was made with due diligence by the undersigned based on rating information which was available or should have been available to an insurance broker in the structured settlement trade."
(h) In the event that the parties to the action desire to place the annuity with an annuity carrier licensed in New Hampshire which does not meet the above criteria, the Court may consider approving the same, but only if the annuity obligation is bonded by an independent insurance or bonding company, licensed in New Hampshire, in the full amount of the annuity obligation.
(i) The Court reserves the right to require other reasonable security in any structured settlement if the circumstances should so require.
3. The Court may, for good cause shown, approve a structured settlement that does not comply with the provisions of paragraph (K). If the Court approves a settlement that does not comply with the provisions of paragraph (K), the Court shall make specific findings on the record explaining the reason(s) for approving the settlement.
Closing comments:
This is one of the more extensive requirements that I've seen of any state's Court approval process for settlements for children. I would like to point out to whoever is in charge of the judiciary in New Hampshire that Duff & Phelps Credit Rating Co. and Fitch IBCA announced a merger on March 7, 2000, with the deal completed in June 2000, creating a single rating agency that will operate under the name Fitch. Inasmuch as its almost 8 years later it would be a good time to change "Duff and Phelps" to "Fitch" in Rule 111 2 (d)(iv), as any literal interpretation of that section of the law, by a judge not familiar with the merger, is likely to cause unnecessary confusion.
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