by Structured Settlement Watchdog
What is a Structured Settlement Overpayment lawsuit?
A structured settlement overpayment lawsuit is a legal action between a structured settlement obligor, typically a qualified assignment company, and the survivors of payee of a structured settlement who has died.
A structured settlement overpayment occurs when payments are
- life contingent
- the certain period, if any, has expired
- there has been no notification of thd death of the payee
- the survivors continue to receive payments in the name of the deceased payee after the decedent’s death even though they are not entitled to them.
While an insurance company will usually be notified through the so-called Social Security Death Master, the possibility of error exists.
What is the Social Security Death Master File?
The Social Security Death Master File (DMF) is a comprehensive database maintained by the Social Security Administration (SSA) that contains records of deaths reported to the SSA, crucial for identity verification and program administration. It was first made available in 1980. The DMF documents deaths, including deceased individual’s Social Security Numbers from 1962 to present.to include:
- Social Security Number (for people who had Social security Numbers)
- Name
- Date of Birth
- Date of death
Source: Social Security Administration (SSA)
What if there is a structured settlement overpayment can you keep it?
No, you cannot keep it. A structured settlement is a contractual agreement. If the contract does not provide for survivor payments survivors are not entitled to them, even if in your grief you forgot to notify the insurer.
What Has Happened in the Ipek Case?
A settlement was been reached in principle, between Wilcac Structured Settlements Inc d/b/a CNA Structured Settllements, Inc. ,Wilcac Life Insurance Company (“Plaintiffs”) and the parents of a deceased minor in Wilcac Structured Settlements, Inc. v. Ipek et. al., Case No. 2:19-cv-06928-DLI-ST according to a letter filed October 1, 2020 with the United States District Court Eastern District of New York. Norwalk Connecticut based Wilcac had sued a Mineola New York couple, individually and as guardians of for their deceased son, seeking recovery of $272,266.14 in overpaid life contingent structured settlement payments paid after the death of their son. Defendants had refused to repay the $272,266.14 according to the Complaint. For further background on the Wilcac vs Ipek lawsuit please read my January 5, 2020 post.
Also see Proof of Life and Structured Settlements
In certain cases involving life-contingent payments, particularly if payable to a payee outside the United States, proof of life may be required annually. The annuity issuer may withhold such payments until the necessary proof is provided. This practice, where implemented, is intended to prevent fraud.