by John Darer CLU ChFC CSSC
Echoing the published opinion of the New York Insurance Department Office of General Counsel obtained by this author on September 24, 2007 (see below), the Oregon Insurance Division today indicated that it concurs that a life insurance agent or broker paying the expenses of a qualified settlement fund IS an illegal inducement. A life insurance agent or broker in Oregon may not provide an inducement or valuable consideration of any kind that is not specified in the insurance policy.
Thus, in Oregon, New York , Connecticut and as confirmed in 2 other states the qualified settlement fund expenses (which include, but are not limited to, tax returns for the qualified settlement fund, trustee fees) must come out of the fund or trust itself. This additional cost factor must be considered by a structured settlement broker or settlement planner and the plaintiff lawyer in determining whether or not using a qualified settlement fund is in the best interest of the tort victim.
In differing from New York, the Oregon Insurance Division says it is permissible however, to advertise that the agent of broker makes (or has made) donations to a not-for-profit entity, such as an association of trial lawyers.
For more information:
What is a Qualifed Settlement Fund?
New York Insurance Opinion September 24, 2007 Download ny_insurance_department_9242007_response_to_inquiry_about_whether_certain_activities_are_rebates.pdf ,
Structured Settlements 4Real has been researching this issue as part of a best practices effort.
Hope this information helps you in your practice.
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