by John Darer CLU ChFC CSSC RSP
Peachtree Financial Solutions announced that "it signed an exclusive agreement with a large European financial institution to sell its originations of life contingent structured settlement payments.
“Having recently closed the first closed-end fund of its kind, Peachtree now demonstrates continued success by establishing a second, larger fund within the life contingent structured settlement space,” said Sergio Salani, Peachtree’s Senior Vice President in the press release
Life contingent structured settlements involve periodic payments that are made to an individual until they die, and result from the settlement of a tort dispute. If liquidity is needed, the individual may sell a portion of these future payments in compliance with strict statutory guidelines.
Here's the problem. Peachtree's discount rates are generally very high. The higher the discount rate the more the tort victim gets hosed.
"Annuitant "Who Has Sampled A Little Too Much "Peach (tree) Gobbler"?
Then there's the issue of the "large European Financial institution". With all due respect to Peachtree CEO, Jim Terlizzi, and whoever his partners in this travesty are, frankly there's probably enough demand in the United States to repackage cash flows to actually benefit tort victims instead of the "fat cats".
Perhaps some domestic United States insurance companies and other financial institutions will be creative and come up with a better way to benefit the people that are getting hosed. It's time for the bloated factoring company model to change.
This author is willing to open a dialog with ANY factoring company, insurer, financial institution or settlement firm that wants to share ideas about how to provide a more efficient secondary market place that provides greater opportunities and solutions for tort victims to safely fund certain segments of their future needs in the current environment.
I plan to be in Las Vegas at the time of the annual meeting of the National Association of Settlement Purchasers and the fall NSSTA meeting.
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