by John Darer® CLU ChFC MSSC RSP CLTC
In the wake of extensive coverage of the Baltimore lead poisoning "Blacksploitation"cash for structured settlement investigation in national news media, Matt Bracy of the Dallas law firm of Scheef & Stone, has sensationally chosen to attack insurance companies who place their own requirements on structured settlement transfers in addition to the federal and state structured settlement protection statutes. Bracy alleges the practice harms the annuitant by delaying their access to cash now for structured settlement funding.
Bracy cites Allstate Life Insurance Company for objecting to more than one transfer within 6 months in a podcast published on The Factoring Channel September 6, 2015. While Allstate was still actively writing new structured settlements (it ceased writing in 2013), Allstate also restricted transfers within the first two years of a contract as part of its Advanced Funding Exchange notice.
Bracy opines that requirements put in place, delay the structured settlement transfer process and this practice he believes, harms annuitants who are desperate to sell.
In a pair of legal complaints against buyers of structured settlement payment, however, plaintiffs alleged that structured settlement buyers encouraged sellers of structured settlement payment rights to waive rights to independent professional advice to an added cost and/or delay.
The parallel to what Bracy says, with good intention, unfortunately seems to be borne out by secondary market participants who allegedly skate around the rules. I'd say that there's harm being done there.
Bracy also opines that the efforts of the insurance companies add their own requirements take the power away from the judge. I beg to differ. In order for the sale of structured settlement payments to go through (and for the structured settlement buyer to avoid a 40% excise tax) a judge must determine if the transaction is in the best interest of the payee and the payee's dependents. A number of structured settlement buyers have been adept at finding "squeaky wheel" judges who schedule minimal time for determining best interest before approving.
Bracy's argument is an attempted diversion that does not explain away some the tactics employed by cash now for structured settlement companies, who exploit the lack of regulation concerning solicitation of structured settlement annuitants by cash now for structured settlement companies.
