by Structured Settlement Watchdog®
Palpable Pulpiness Begins
- In Dick Risk’s March 12, 2015 Life Health Pro article Risk writes “In wake of lawsuits, storm clouds over structured settlements”, dredging up Sylvester Stallone’s epic portrayal of Rocky, or the structured settlement industry as Rocky “getting pummeled”, in his opening paragraph, to conjure up the image that Dick Risk wants to convey.
- It merely demonstrates that Dick Risk may have been hoisted on his own petard, bobbed and weaved by a “rope a dope” of his own creation.
- Richard B. Risk, Jr. prefers to be addressed as Dick Risk.
Disgruntled Dick’s Misplaced Metaphor
- If indeed Dick Risk believes his own press clipping, Rocky was supposed to be a patsy for Apollo Creed.
- Instead the underdog took Apollo Creed all the way and Creed was surprised by the tenacity of the southpaw.
- Then of course there were multiple sequels, Rocky II where he defeated Apollo Creed, Rocky III where he defeated Clubber Lang and Rocky IV where he beat Drago, in revenge for the “ultimate knockout” of his then buddy, Apollo Creed.
- Risk looks foolish for his hemispheric portrayal of the structured settlement industry as Rocky “getting pummeled”.It merely demonstrates that Dick Risk may have been boomeranged in a “rope a dope” of his own creation.
- As a fighter,Rocky kept getting up after gettng down. In real life Sly Stallone wedded and divorced glamazon Brigitte Nielsen, who played Drago’s wife in Rocky IV. If the structured settlement industry can get up after getting knocked down as much as Rocky they will have succeeded. Thanks Dick!
Dick Risk’s Questionable Math
In”barely” the same breath as Risk’s “Rocky raccoon” , Dick Risk refers to structured settlement industry production in stating that the industry’s production last year* was “barely two-thirds what it was ten years ago”, in real terms.
- The link is to an excerpt of a report compiled by Melissa Evola Price of SFA Inc. and is used completely without attribution by Richard Risk or LifeHealthPro to Ms. Evola. I confirmed with Ms. Evola that Risk is not on her distribution list.
- So someone on her distribution list supplied the Evola work product to Risk and Risk and/or LifeHealthPro used it without attribution. This is where Dick Rick comes up short.
- Most people in the structured settlement industry know that the spreadsheet is produced by Evola (and therefore would likely attest to the plagiarism) because she has diligently done so for many years (until Matt Ross assumed the reins), but the wider readership of LifeHealthPro does not.
Setting that aside the questionable ethics of Risk using someone else’s work without attribution, Dick Risk’s math is way off.
Evola’s most recent numbers 2014 are $5,250,262.691.00
One decade ago would be 2004, right? $6,135,000,000.00
A simple calculation $5,250,262,691 divided by $6,135,000,000.00 equals 0.8558 or 86% (rounded)
Two thirds =0.6666
*following the publication of this report the table of Melissa Evola Price that Risk used was removed from the Life Health Pro article
What was the point of Dick Risk’s article?
So if we eliminate the first paragraph of Dick Risk’s article for the miserable subterfuge that it is and discount the plagiarism of Evola’s work product at the time of publication, what is Risk really trying to say?
” As a longtime believer in structures’ value”, he nevertheless thinks the issues raised in two lawsuit filings show that the industry desperately needs to improve controls on the $5-plus billion in settlements it handles each year.
Risk reports month old news about a class action lawsuit against Ringler Associates in Oregon where the judge denied Ringler and Paul Hoffman’s motion to dismiss. [ See Ringler Associates et al. Motion to Dismiss ELNY class Action Denied February 14, 2015]
Risk feels that “this is where things could get problematic for Ringler and, importantly, risky for claims insurers* that Ringler worked with on the settlements in question. A key issue: Did
the claims professionals or Ringler’s consultants know prior to securing ELNY annuities that ELNY was unlikely to be able to meet its future obligations?
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Claims Insurer is a non-sequitur that appears to be made up by Risk
Claims insurer is a non‑sequitur that appears to be entirely of Risk’s own invention. The term does not exist in insurance, law, regulation, or any recognized taxonomy of the field. An insurer provides cover for its insured against the risks of perils — a perfectly ordinary and well‑established concept — but there is no such creature as a “claims insurer,” no matter how confidently the prattle rattles on.
A claim, after all, is simply “a demand for money, for property, or for enforcement of a right provided by law.” It is not something that is “insured” by a separate class of entity. The notion of a “claims insurer” belongs in the same drawer as other imaginary constructs: the Ministry of Sensible Metaphors, the Bureau of Underwriters Who Know the Future, and the Department of Claims That Insure Themselves.
Amusing, certainly.
Accurate, certainly not.
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The Hits from the 1980s
Having dispensed with the invented terminology, the discussion shifts to a different kind of signal — one not found in insurance texts, but in the cultural shorthand of the 1980s. Two dance hits from that era provide an unexpectedly apt frame for what follows.
“Shakedown Street“
So there’s the “Shakedown” Street” rub, speculation about an inevitable visit to “shakedown street” for Travelers and AIG, cited in Risk’s article who are among the insurers that insured the Defendants ( that were clients of Ringler Associates), IF discovery uncovers a smoking gun and Plaintiffs are able to prove their case. I repeat the Plaintiffs must prove their case.
“Dead Giveway”
Then there’s the Shalamar rub, featuring the gratuitous cite of Rick Woolams, AIG’s top claims executive, cited as “according to someone who heard the speech”. Most in the industry know who that was since the “informant” repeated those words so much as to remove all doubt. The tell tale cite gives away the source as easy as “Peter Piper Picking a Peck of Pickled Peppers”, so poorly disguised because the “anonymous” source repeatedly cited that 2012 Woolams speech in San Francisco to anyone whose ear could be bent. Anyone in the structured settlement industry at the time could identify the anonymous source based on that Rick Woolams’ cite. If the anonymous source wanted to remain anonymous they should’ve stopped using that cite!
The Woodyard Situation
In my blog of February 9, 2015, Ringler Sued | Structure Broker Mike Woodyard in Alleged $4MM Ponzi Scheme, the issues in that case are clearly laid out, in particular that the way the premiums were submitted to Woodyward and/or his entity were highly irregular and not at all characteristic of how members of the structured settlement industry generally do business. At time of posting there have been no criminal charges against W. Michael Woodyard filed in any Federal Court (source; Pacer.gov) and I have no idea if has been arrested. Sources claim “they (FBI) know where he is”
This lawsuit IS NOT weighing on structured settlements. If anything at all, it is weighing on Ringler Associates. If Ringler Associates goes out of business because the alleged actions that have associated with its former rogue broker have been proven and a monetary award or settlement together with everything else exceeds its resources, rendering it unable to continue as a going concern, its producers will land elsewhere. For Risk to say it weighs on the industry is pure baloney.
Richard Risk admits that “the complaint suggests that the annuities in question were not structured annuities” If so then why would that weigh on the structured settlement industry? If Risk admits the annuities weren’t structured annuities, then his assertion that the case weighs on the structured settlement industry is unsupportable..
Risk Was A Prolific Newsletter Writer — Who Never Wrote About ELNY
- Before the disgruntled ex‑structured settlement consultant Dick Risk became a lawyer, he was a structured settlement consultant affiliated with Summit Settlement Services. He wrote an informative newsletter that I personally subscribed to and even mailed out to clients. He posted articles from those newsletters on the Risk Law Firm website. I looked today and was not able to locate a single newsletter article or commentary about the ELNY situation.
- So for the first time “weatherman” Risk says in the LifeHealthPro article:
“A key issue: Did the claims professionals or Ringler’s consultants know prior to securing ELNY annuities that ELNY was unlikely to be able to meet its future obligations?
This is no idle conjecture. I was a structured settlement consultant during the 1980s, when ELNY was issuing structured annuities. At the time, there were clear warnings about ELNY’s future given its excessive reliance on the unstable junk bond market. [ is Risk going to appear as a witness in the case?]
Moreover, Baldwin United’s failure in 1983 had already shown how a run on assets at an under-capitalized insurer could cripple its ability to meet future obligations.
Despite the warning signs, many claims professionals were known for pushing the use of ELNY annuities to save money, even as ELNY’s under-capitalization became too obvious to ignore”.
If such was the case, why has Disgruntled Dick Risk not written about ELNY in 30 years?
Where is Risk’s criticism of his SSP colleagues who wrote Executive Life or ELNY annuities?
Related Reading about ELNY
Here’s the big picture that Dick Risk didn’t write about
First Executive: The Impact of E.F. Hutton’s Decision – Structured Settlements 4Real®Blog January 27, 2013
Baldwin-United 1983 Collapse Was on CBS Evening News New York with Dan Rather – Structured Settlements 4Real®Blog December 16, 2014
ELNY Lawsuit Challenges
- Plaintiffs’ lawyers must prove their case.
- A number of plaintiffs in a 2012 class action claimed the failure of ELNY was due to mismanagement by the New York Liquidation Bureau.
- Proving the all eggs in one basket was a unilateral decision in a lawsuit settlement, that by definition is a compromise.