What is the problem with structured settlements? Has the brand been lost?

In this week's edition of Speaking of Settlements, national structured settlement expert, Mark Wahlstrom, looks at some of the empirical data on structured settlement premium written, interest rate trends and the shrinking number of life markets involved in the structured settlement market. 

Mark's conclusion is that there are some fundamental problems in the structured settlement profession as evidenced by shrinking premium, diminished interest from life markets and an aging and static based of structured settlement brokers actively engaged in the profession.

The myth that structured settlement annuity sales have shrunk as a result of lower interest rates is exposed to some degree by the fact that fixed annuity and income annuity sales for the rest of the financial planning industry are up, even at record levels, for certain lines, all with the same interest rate levels the structured settlement profession use as an excuse for poor results. It begs the question as to why structured settlement sales have declined 20% over the last two years, when the rest of the financial service industry is seeing gains of 6% to 15% on similar lines over the same time period. 

If interest rates can not be blamed for this drastic decline, then what is at work in the structured settlement profession to cause such severe drops in premium?

Mark's answer is that the structured settlement brand name has been taken over by the factoring profession and that it is now going to be almost impossible to salvage the integrity of the product in the minds of consumers. The steady drum beat and message that implies that a structured settlement is something to be rid of, ( "It's your money, and you want it NOW!") has polluted the minds of NEW potential clients to a degree that they all wonder why they would ever want to be in a structured settlement when it appears that everyone is trying to get out of one. 

Obviously, those in the structured settlement profession are well versed on the value, importance and integrity of the structured settlement, but as Mark Wahlstrom warned repeatedly over the last five years, the settlement profession's pathetic budget to counter this adverse message from factoring companies has doomed the profession to the loss of it's brand identity with potential newclients.

Listen to this week's edition of Speaking of Settlements and watch for next week's discussion on the implications of the lost battle for the mind's of new customers and what brokers, planners and attorney's can do to manage their professional practice going forward. 

Hartford Financial shuts down it's annuity business, what is the impact on structured settlements?

In what came as a mild surprise to the financial and structured settlement professions, it was announced earlier today that Hartford Financial would be closing down it's life and annuity divisions and putting them into "run off" status pending a possible sale. The Hartford Financial Services Group

The stated objective of this move was to address the companies lagging stock price, which has been trading at 50% of book value, and is down 15% over the last year. The firms largest single shareholder, John Paulson whose hedge fund is reported to own 8.5% of the Hartford Financial Services Group, (HIG) had in a analyst phone call last month made it clear that management needed to do something to boost the value of the stock. Today that "something" became apparent as The Hartford will now concentrate on it's property casualty business, as well as it's group pension division, and cut ties with it's life and annuity markets.

In this special report, Mark Wahlstrom, the President of Wahlstrom & Associates and a leading commentator on structured settlements and annuity products, looks at some of the key questions surrounding this announcement. Such as:

• The immediate impact of the S&P ratings of Hartford Life and Annuity being dropped to BBB+ in the wake of the announcement.
• What concerns if any should policyholders of Hartford annuity contracts have as this enters run off status.
• What brought about the demise of this line of business for Hartford? Was it the on going drag of overly generous variable annuity policy provisions agreed to during robust equity markets?
• Is this an indication of problems among annuity companies or an isolated situation specific to The Hartford.

Learn more by watching the full video interview and subscribe to Mark Wahlstrom's commentary on The Settlement Channel, a featured broadcast here on The Legal Broadcast Network.

Selling structured settlement annuity contracts to seniors, is there a risk for agents?

A recent court case in California should give pause to virtually every structured settlement planner, agent or broker in the country as it seems to indicate that the sale of annuity products to seniors or claimants with impaired decision process could lead to criminal prosecution.

In this weeks “ Speaking of Settlements “ video broadcast, Mark Wahlstrom looks at the recent case of annuity agent Glen Neasham, a 52 year old annuity agent in California, who was recently convicted of felony theft charge and sentenced to 90 days in jail for selling a $175,000 annuity to an 83 year old woman who prosecutors alleged exhibited signs of dementia at the time of the sale. He was prosecuted under what are broadly referred to as “Elder Abuse” statutes that cover not only physical or nursing home abuse, but increasingly exploitation of seniors in the decision process of handling investments, savings and financial planning. 

The article, written by WSJ staff reporter Leslie Scism, does an excellent job of covering the facts of the case and looking at the issues involved. You can read the full article by clicking here.

However, in this weeks broadcast Mark Wahlstrom elaborates on how this might impact structured settlement planners, annuity agents and others who deal with anyone over the age of 65. A great number of laws have been passed that REQUIRE banks and other’s to report suspected elder abuse or inappropriate influence in the planning or sales prospect, as happened in this case, making the likelihood of other such cases being pressed in other states quite high.

Some of the issues at stake here for structured settlement planners going forward are:

• If state laws now indicate that any person doing planning over the age of 65 is considered elderly and is thus covered under these statutes, do planners and agents need to take particular care in dealing with anyone 65 or older if recommending a structured settlement annuity?
• If the compensation for annuity sales in the form of a commission is going to be used to establish “criminal intent” as was the case in the Neasham prosecution, are there additional disclosures necessary on how an agent is compensated when dealing with any impaired claimant or senior?
• How might this decision impact the structured settlement factoring business? If the high cost of “getting out of the product” is used as evidence of harming the clients, as it was in this case, what does this say about factoring company advertising and inducements to “ get your cash now” when it causes demonstrated financial loss to claimants in many cases to proceed down that path?

We anticipate there will be a great deal of follow up on this case and others like it around the country and we will continue to follow it and comment on how it might impact structured settlement sales and consulting moving forward.

The BP Oil Spill Settlement, questions answered as to what it means for you

BP Oil Spill from Sequence Media on Vimeo.

The Legal Broadcast Network recently interviewed two of the key attorneys in the BP Gulf Coast Oil Spill Settlement, Attorney Frederick "Rick" Kuykendall of Kuykendall & Associates of Fairhope, AL and Attorney Wes Farrell of the firm Farrell & Patel of Miami, FL. Each of these attorneys  cover a wide range of questions and answers on what the BP Gulf Coast Oil Spill Settlement during this 20 minute Q&A session and explain what this means for you.

The Settlement which was announced late last week by US Federal Judge Carl Barbier covers the settlement of private individual and business claims for economic loss, damages and potential physical injury related to the Gulf Coast oil spill. After a long and difficult negotiation it is clear that the Gulf Coast Claims Facility that was headed up by Kenneth Feinberg is going to be phased out quickly and that a brand new settlement facility or mechanism is about to take it's place.

Some of the issues discussed in this wide ranging interview address the major questions being asked by Gulf coast residents, lawyers and businesses, such as:

• What happens to my claims that are already submitted to the GCCF but have not yet been paid?
• What are my options if I have already settled with the GCCF? Do I have the opportunity to have my claim reviewed again for a higher payment?
• What if I have never filed a claim for damages, do I have the option to file a claim now to the new court supervised facility?
• Do I need to engage an attorney to assist me in the process or is it possible to handle this myself?
• When will checks or claims be paid on the Gulf Coast Oil Spill? How long of a wait can I anticipate?
• What kind of evidence or proof will be needed to process my claim?

This is going to be the first in a month's long series of conversations with both of these attorneys, but also other leading lawyers, settlement experts, tax and financial consultants and others who will be addressing the wide range of issues facing those involved in the settlement.

The sheer size of the settlement fund, estimated at in excess of $14 billion, as well as the number of claimants, currently set at greater than 100,000 gives you an idea of the scope of this undertaking. Future shows will discuss the taxation of settlement payments, the design and purpose of the 21 year medical set aside and health monitoring facility, the $100 million allocation for study of the long term environmental impacts and other important questions. Wahlstrom & Associates will continue to provide in depth analysis of the settlement and planning options available to claimants.

Attorney Rick Kuykendall is one of the leading attorneys and experts on the Gulf Coast Oil Spill litigation and has decades of experience in litigating mass tort claims nationwide. His firm is based in Fairhope, AL.

Attorney Frederick "Rick" Kuykendall  

Attorney Wes Farrell is recognized as one of the leading Attorney's in the Southeastern US and represents scores of businesses and indivduals impacted by the Gulf Coast Oil spill. His firm, Farrell & Patel is located in Miami, FL.

Attorney Wes Farrell, Miami, FL

Questions on the BP Oil spill settlement, what does it mean for settlements?

The announced settlement in Federal Court on the BP oil spill case has as usual created more questions for the claimants and gulf coast residents than it has answered.

Legal Broadcast Network will have an exclusive question and answer session with two of the most knowledgable attorneys involved in this case. Attorney Frederick "Rick" Kuykendall of Kuykendall & Associates of Fairhope, AL, and Attorney Wesley J. Farrell of the Miami, FL firm of Farrell and Patel.

Legal Broadcast Network will be releasing the interview on it's affiliated channels and here at The Settlement Channel at 2 pm EST, March 5th and will cover questions such as:

• What if you are a resident in the Gulf Coast who was impacted by the spill but you have yet to file a claim? How does the announced BP settlement impact your rights?
• What if you have already recieved some partial payments from the Gulf Coast Claims Facility? What are your rights or options going forward.
• What options in the BP Settlement take into consideration the potential for long term health issues or future claims for illness, injury or medical care needs due to pollution of the Gulf?
• What will happen to claims that are being processed in the Gulf Coast Claims Facility but have yet to be finalized or settled? Do you need to start the process over or do you have other options?
• What is the tax status of my oil spill claim? Is it taxable and do I have the opportunity to structure my payments over time and save on taxes?

In short, this interview with two leading lawyers who have been involved in the BP Gulf Coast litigation from it's outset will be of crucial value and interest to residents, businesses and others impacted by the Gulf oil spill and the possible rights to settle your claims.

If you are a claimant or interested party in the BP Oil spill settlement you need to be sure to view and listen to this exclusive broadcast early next week! Our firm, Wahlstrom & Associates is prepared to work with claimants and their advisors who are wondering what the financial impact of this settlement might be, what settlement options are available and strategies using 468B settlement trusts to defer the tax hit for many claimants.

Check back at Legal Broadcast Network after 2 pm EST on Monday the 5th and we will have the comprehensive interview ready for you to view and share with your friends at that time. We will also be releasing the same interview on The Settlement Channel just after broadcast Monday.

BP announces settlement of the first oil spill claims.