Beyond Structured Settlements

NASP 2009 Annual Meeting - 1

The National Association of Settlement Purchasers (NASP) hosted its 2009 Annual Meeting at the Mandalay Bay Hotel in Las Vegas November 12-13 almost one month following  NSSTA and SSP 2009 Fall meetings at the same location.

In comparison with traditional NSSTA and SSP meetings, the NASP 2009 educational program featured:

• More insightful and comprehensive strategic discussions;
• Broader perspectives from industry experts;
• Better analysis of legal and financial developments;
• Better analysis of structured settlement public policy;
• Better criticism of business standards and practices;
• Better recognition of industry leaders who are contributing to the growth and improvement of structured settlements.

Structured Settlement Wiki - for S2KM reports about prior NASP meetings, see the structured settlement wiki.

This S2KM blog post, the first in a series about the NASP 2009 meeting, highlights the NASP Alexander Hamilton honoree plus educational topics and speakers. Subsequent S2KM posts will summarize and analyze NASP discussions and provide interviews with some of the industry experts who spoke at the NASP meeting.

Alexander Hamilton Award - Van Tran was named 2009 recipient of NASP's Alexander Hamilton award. Van Tran is the California legislator who led the enactment of California SB 510 which amends and improves California's structured settlement protection statute.

NASP 2009 Educational Conference - Topics and participants:

• 2009 Legislative Developments - Matthew Bracy.
• Legal Case Update - Tricia Laborde.
• What Happened in California? - Michael Damore; Carl London; John Shafhi; Matt Eason; Linda Morris; Matt Bracy.
• Transactional Structured Settlement Issues - Tricia Laborde; Ken Barnett; Michael Green; Jim Klohn; David Barfield; Scott Topoloski; Kevin Mack; Joe Siegel.
• Structured Settlement Capital Markets - Jason Sutherland; Burt Kroner; John Ryan; Robin Shapiro; Josh Tobin.
• Structured Settlement Court Practices and Issues - Earl Nesbitt; Judge Edward Burke; Judge Christopher Marshall; Thomas Dixon; Roger Dunaway; Tricia Laborde; Amy Schwartz.
• Factoring and the Structured Settlement Tax Subsidy - Jeremy Babener.
• Structured Settlement Bankruptcies - Bruce Akerly.
• Re-thinking Structured Settlements - Earl Nesbitt; Jeremy Babener; Matthew Bracy; Daniel Hindert; Richard Risk; Andrew Savysky; Robin Shapiro; Michael Upchurch.

For additional information about structured settlements, see:

• "Structured Settlements and Periodic Payment Judgments" (S2P2J) co-authored by Daniel Hindert, Joseph Dehner and Patrick Hindert;
• Wikipedia definitions for:
  • Structured settlement;
  • Structured settlement factoring transaction.

S2P2J Release 46

Incisive Media has announced the publication of Release 46 for "Structured Settlements and Periodic Payment Judgments" (S2P2J). Co-authored by Daniel Hindert, Joseph Dehner and Patrick Hindert, S2P2J was first published in 1986 and has since been utilized as a textbook for professional certification programs sponsored by both the National Structured Settlement Trade Association (NSSTA) and the Society of Settlement Planners (SSP).

S2P2J Release 46 Highlights

• New Medicare/Medicaid mandatory reporting rules for insurers and others with full details about the scope of reporting, exclusions and requirements that affect defense attorney obligations and secondary payers in personal injury claim settlements;
• Third Circuit decision affirming addition of "tax offsets" to compensatory damages in an ADA case, with important implications for non-physical injury cases;
• Private Letter Ruling confirming that non-qualified assignment payments are not taxed until the year received;
• Importance of allocating state Medicaid liens and negotiating in advance of settlement with state providers, based on adverse ruling in an Idaho case;
• Up-to-date growth rate figures for medical care expenses and earning for non-farm workers, plus the latest data on structured settlement annuity use;
  
• Factoring company victory in California appeals case concerning right to dismiss cases when trial judges refuse transfer petitions;
• Developments in Australia and the United Kingdom regarding tax-free nature of structured settlement receipts and proper growth rates for periodic payment judgments.

S2P2J Release 47, available March 2010, will introduce Sylvius von Saucken as an S2P2J chapter and subject expert author. von Saucken, a partner in the Garretson Law Firm and Chief Compliance Officer for The Garretson Firm Resolution Group (GFRG), will add his analysis to:

• Chapter 3 - "Financing Alternatives for Structured Settlements";
• Chapter 14 - "Structuring Workers Compensation Claims";
• Chapter 15 - "Government Benefits and Structured Settlements".

S2P2J Release 47 will also feature expanded commentary for:

• Structured settlement public policy;
• Single claimant Qualified Settlement Funds (QSFs); and
• Secondary market developments.

For prior S2KM reports featuring Sylvius von Saucken's analysis of the Deficit Reduction Act of 2005, see the S2KM blog series titled "Inconvenient Questions".

S2P2J Release 45

Release 45 of "Structured Settlements and Periodic Payment Judgments" (S2P2J) is now available from publisher Incisive Media. Incisive Media purchased ALM (American Lawyer Media) in 2008 including publishing rights to S2P2J.

Co-authored by Daniel W. Hindert, Joseph J. Dehner and Patrick J. Hindert, S2P2J was first published in 1986 with 45 semi-annual updates. NSSTA and SSP both utilize S2P2J in their certification programs.

New S2P2J chapters since 2001:

• Chapter 15: "Government Benefits and Structured Settlements"
• Chapter 16: "Transfers of Structured Settlement Payment Rights"

Recently expanded S2P2J sections:

• Section 3.06A: "Non-Qualified Assignments"
• Section 3.07A: "Settlement Trusts"
• Section 6.02: "Structured Settlement Consultants"

S2P2J Release 45 features a new and expanded Section 3.08B discussion of Section 468B settlement funds. This up-to-date analysis includes:

• A practical explanation of Section 468B settlement funds;
• When and how to use them;
• Statutory and regulatory background for designated settlement funds (DSFs) and qualified settlement funds (QSFs);
• Discussion of the Tenth Circuit decision in United States v. Brown validating the settlement QSF regulations;
• Mechanics of settling up, operating and winding down Section 468B settlement funds;
• Summary of how Section 468B settlement funds are taxed under federal and state income tax laws;
• Sample terms of fund administration;
• Recommendations when evaluating the proposed terms of settlement fund administration;
• Practice pointers for courts, litigators, and fund administrators as they define their 468B duties and responsibilities.

Concurrent with the recent publication of Robert W. Wood's legal treatise, "Qualified Settlement Funds and Section 468B", S2P2J Release 45 underscores how important 468B funds are for structured settlements and settlement planning. Both professional communities need more and improved education about 468B funds. So do judges, trial attorneys, mediators, trustees and guardians.

Robert Wood's book and S2P2J Release 45 substantially upgrade the available learning resources.

S2KM's review of Robert Wood's 468B book: "Robert Wood and 468B Funds".

Robert Wood's commentary about 468B funds:"Robert Wood QSF Interview".

ASNP 2009 Annual Meeting

The Academy of Special Needs Planners (ASNP) hosted its Third Annual Meeting March 6-7, 2009 at the Rancho Bernardo Inn in San Diego, California. Titled "Special Needs Planning in an Era of Change", the program devoted one day of educational discussions to "special needs settlement planning" (SNSP) which ASNP characterized as a "new opportunity" for special needs attorneys.

The ASNP speakers included leading special needs attorneys and plaintiff structured settlement consultants who provided detailed analyses of the following SNSP topics:

• Anatomy of a SNSP Case - Frank Johns, Kevin Urbatsch and Patrick Hindert;
• Structured Settlement Annuities in SNSP Practice - Jack Meligan and Michele Whitmore;
• IRC 468B Qualified Settlement Funds (QSFs) - Jason Lazarus and Richard Risk;
• Integrating SNSP with an Elder Law Practice - Tim Nay and Sandy Conley;
• Medicare Secondary Payer Compliance - Mark Popolizio;
• Lien Resolution Strategies - William Browning, Mark Popolizio and Sylvius von Saucken;
• Marketing to the Trial Bar - Frank Johns, Jason Lazarus, and Kevin Urbatsch.

The SNSP program highlighted three basic issues:

• What is SNSP?
  
• What changes are impacting SNSP?
• What new opportunities does SNSP create for special needs attorneys?

What is SNSP?

Surprisingly, none of the speakers attempted to specifically define SNSP. Hindert recommended web 2.0 knowledge maps, wikis and folksonomies as a strategy for defining and growing SNSP.

Meligan and Whitmore described the related topic of "settlement planning" as both a profession and a process. According to Meligan and Whitmore: "Settlement planning is a profession that helps recipients of settlement proceeds use their proceeds to achieve their post-loss goals and transition successfully into their post-settlement financial lives". Meligan and Whitmore recommended utilizing settlement planning professionals with: credentials; loyalty to plaintiffs; planning approach; and experience. Meligan and Whitmore also described "settlement planning" as part of a three-part process preceded by litigation and followed by financial planning.

von Saucken also described "settlement planning" as a process or "continuum" subject to changing rules that require adjustments in settlement planning prototypes. von Saucken presented a settlement planning timeline:

• Agreement on settlement amount;
• Lien reimbursement;
• Medicare/Medicaid preservation trust;
• Structured settlement paperwork;
• Disbursement.

By comparison, during his recent presentation at the NSSTA 2009 Winter Meeting, Joseph DiGangi defined "settlement consulting" as a four-stage process:

• Analysis
• Planning
• Implementation
• Monitoring

Most of the ASNP presenters identified and addressed "structured settlements" as an essential component of SNSP. As part of his 468B QSF comments, Risk reviewed several structured settlement definitions including the tax definition in IRC section 5891(c)(1). To S2KM's knowledge, Risk thereby becomes the first structured settlement primary market participant to review the IRC section 5891 tax definition for "structured settlement" during a national conference. By comparison, not a single NSSTA or SSP conference speaker has reviewed the IRC Section 5891 definition for "structured settlement" since IRC 5891 was enacted in 2001. Risk also becomes, to S2KM's knowledge, the first conference speaker to link IRC 468B and 5891 which S2KM views as a strategic SNSP construct.

Several ASNP speakers addressed various types of settlement trusts in the context of SNSP. Browning highlighted settlement trust "due diligence" as an increasingly important SNSP issue. Three settlement trust providers, but not one structured settlement annuity provider, exhibited at the SNSP conference.

What changes are impacting SNSP?

ASNP speakers identified and highlighted the following changes impacting SNSP:

• Deficit Reduction Act of 2005 (DRA);
• The Ahlborn Case;
• 468B qualified settlement funds (QSFs);
• Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA);
• Recent MSA rules promulgated by CMS;
• The structured settlement secondary market;
• State structured settlement protection statutes;
• Transition of knowledge and knowledge work to the Internet.

Additional changes referenced by ASNP speakers which deserve more detailed analysis in future SNSP discussions:

• Transitional SNSP business models:
  • How the claim management SNSP model differs from the 468B QSF SNSP model; and
  • How to develop multi-professional SNSP teams and knowledge networks.
• How the current financial crisis impacts SNSP;
• Proposed and/or needed SNSP legislative and regulatory changes.

What new opportunities does SNSP create for special needs attorneys?

Traditional special needs legal practice and education have focused on special needs trusts, estate planning, government benefits and probate. As the ASNP conference demonstrated, SNSP encompasses traditional special needs expertise, but also new fields of related legal practice.

Four leading SNSP legal treatises (listed alphabetically by title) define these new fields of SNSP legal practice:

• "Negotiating and Settling Tort Cases" - by Matt Garretson and Guy O. Kornblum;
• "Qualified Settlement Funds and Section 468B" - by Robert W. Wood;
• "Structured Settlements and Periodic Payment Judgments" - by Daniel W. Hindert, Joseph J. Dehner and Patrick J. Hindert;
• "Taxation of Damage Awards and Settlement Payments" - by Robert W. Wood.

The ASNP presentation by speakers Johns, Lazarus and Urbatsch titled "Marketing to the Trial Bar" offered valuable advice for special needs attorneys as well as other SNSP stakeholders. S2KM's structured settlement transaction diagram, developed in 2005 with graphic artist Keith Burtoft, may help special needs attorneys identify other potential SNSP clients and roles. In addition, as S2KM's blog post "Structured Settlement Surveys" demonstrates, further market research would be useful to define and grow the SNSP market.

Congratulations to ASAP and SNSP program Chairperson Tim Nay for the timely and educational SNSP program. Prior S2KM blog posts about ASNP:

• 2008 ASNP Conference;
• 2007 ASNP Conference.

For additional information about settlement consulting, see S2KM's four-part blog series "Settlement Consulting".

NSSTA 2009 Winter Meeting

"Protect the business model and prepare for the future" was the unstated theme as the National Structured Settlement Trade Association (NSSTA) hosted its 2009 Winter Meeting in Orlando, Florida January 28-30.

From NSSTA's perspective, the structured settlement model depends upon:

• Helping injury victims and improving dispute resolution;
• IRC sections 130 and 104(a)(2);
• Integrating these tax preferences with other government benefits including:
  
  • Social Security;
  • Medicare;
  • Medicaid;
  • Veterans benefits; and
  • Federally-assisted housing.
• Cooperation among defense and plaintiff intermediaries;
• Bi-partisan political support in Washington, D.C.;
• Controlling negative secondary market conduct and publicity;
• Continuing payment performance by all annuity providers.

The challenges facing NSSTA, and the structured settlement industry, include:

• The impact of the financial crisis;
• Anticipated legislative and regulatory changes;
• Identifying new leaders;
• Growing the market;
• Addressing 468B and the secondary market;
• Reconciling claim management and settlement planning;
• Transitioning to Internet-based technologies and business models.

Directly or indirectly, NSSTA's educational program in Orlando addressed all of these issues.

Educational program highlights:

Injury Victims

• Andrew Imparato - Imparato, President and CEO of the American Association for Persons with Disabilities (AAPD), was NSSTA's keynote speaker in Orlando. Imparato praised structured settlements as one possible model for modernizing other federal entitlement programs. NSSTA and AAPD have collaborated previously on legislative initiatives including IRC 5891. NSSTA participated as an event sponsor at the 2008 AAPD Gala Leadership Dinner. Imparato spoke previously at NSSTA's 2007 Fall Meeting. The 2009 AAPD Gala Leadership Dinner is scheduled for March 4 in Washington, D.C.
• Eric Vaughn - NSSTA's lobbyist summarized existing federal consumer protection legislation and highlighted some of the consumer and investment protection legislative proposals and issues now before Congress. Although he anticipates federal reforms, Vaughn did not predict whether the primary or secondary structured settlement markets will end up inside or outside any legislative and regulatory net.

Washington Reports

• Congressman Kendrick Meek - Congress Kendrick B. Meek, a Democrat representing Florida's 17th district, addressed economic challenges facing President Obama and Congress. TARP has not served the purpose Congress intended according to Congressman Meek. He predicted continued economic problems "for at least 15 months" including the structured settlement industry. To be effective legislatively, Congressman Meek recommended NSSTA feature "real stories and real people". Congressman Meek further stated: "now is the time to come together" legislatively to protect and improve the structured settlement industry. Congressman Meek also confirmed his candidacy for the U.S. Senate seat which will be vacated when Florida Republican Mel Martinez retires in 2010.
• Eric Vaughn - Vaughn's summaries of NSSTA's political challenges and strategies highlight every NSSTA meeting. In Orlando, Vaughn discussed lobbying opportunities for structured settlements both in Congress and within the Obama Administration. Vaughn provided his political analysis of current Congressional committees as well as proposed legislation important for structured settlements. Vaughn urged all NSSTA members to attend NSSTA's 2009 Annual Meeting April 29 to May 1 in Washington, D.C.

Plaintiff and Defense Brokers - NSSTA's educational program featured two panels addressing plaintiff and defense structured settlement cooperation.

• James Early and Ronald Sullivan - Early (defense) and Sullivan (plaintiff) agreed on most issues: their collaborative objectives include facilitating settlements and taking care of injury victims; both plaintiff and defense brokers are needed; clients should not be able to dictate whether and how brokers share commissions; most brokers are "good people"; 468B funds should be limited to multi-claimant cases and not utilized to eliminate defense brokers. Their only stated disagreement concerned "approved lists" with Sullivan asking what is wrong with injury victims selecting their own annuity providers?
• Roger Bernstein; Bruce DeBacher; and Michael Goodman - Bernstein (special needs attorney), DeBacher (defense) and Goodman (plaintiff) discussed how each helps to settle cases by adding value. Bernstein deconstructed a sample life care plan and integrated collateral benefits to reach "reasonable" settlement expectations. DeBacher and Goodman explained how to build a settlement in an adversarial context, emphasized the need for early involvement and agreed upon the advantages of having both a plaintiff and defense structured settlement broker. They expressed shared concerns: trust companies using factoring to sell against structured settlements; and the decline in small cases resulting from defendants' de-emphasis of structured settlements.

Settlement Consulting - Joseph DiGangi addressed problems the structured settlement industry faces with its historic "annuity broker" business model. According to DiGangi, these problems include a stagnant market, negative perceptions of roles and value, limited knowledge base and resources as well as a single product offering. DiGangi proposed an alternative "consultant" business model with multiple products and services providing added value. Using a case example, DiGangi constructed a planning solution matching the injury victim's "needs and wants" for which he utilized a structured settlement annuity as the foundation product. For structured settlement professionals who lack the expertise or licensing to offer comprehensive solutions, DiGangi recommended teaming up with other professionals.

IRC Section 468B - With Henry Strong moderating, William Winslow and James Klapps discussed the use of 468B funds in cases involving multiple claimants. Their presentation objectives included helping brokers use 468B to expand their structured settlement business and highlighting errors that brokers and their clients should avoid. The presentation purposely omitted references to controversial single claimant 468B issues as well as technical tax and administrative issues. Instead, Winslow and Klapps provided a general introduction to IRC 468 plus encouragement for uninitiated structured settlement professionals that IRC 468B business opportunities and issues do, in fact, exist.

Note: for persons interested in understanding the single claimant 468B controversy, see: Robert Wood's article titled "Single-Claimant (468B) Qualified Settlement Funds?" and Richard Risk's article titled "A Case for the Urgent Need to Clarify Tax Treatment of a Qualified Settlement Fund Created for a Single Claimant" ". For information about technical 468B tax and administrative issues, see Wood's new book "Qualified Settlement Fund & 468B". For information about structured settlements and 468B funds, see Section 3.08B of "Structured Settlements and Periodic Payment Judgments" (Release 44) written by Daniel Hindert, Joseph Dehner and Patrick Hindert.

The Secondary Market

• As part of the NSSTA Legal Committee's "All Things Considered" presentation, Illana Hanau and Michael Miller spoke about structured settlement secondary market issues. Hanau summarized historic abuses and continuing bad business practices by structured settlement factoring companies. Her examples: In re Wiggins, a 2001 Idaho case involving Peachtree Settlement Funding, and the Fresno County cases involving 321 Henderson (a J.G. Wentworth affiliate). Henderson is appealing the Fresno County cases. Hanau also summarized results from a "random sample" of factoring cases as evidence of bad business practices by factoring companies. Miller summarized other business activities in which some structured settlement companies engage: the secondary market for life insurance; the purchase of taxable annuity products; and litigation funding.
• During his "Business Ethics" discussion, Rev. Oliver Williams asked the audience to identify structured settlement business conduct that has caused "shocked disbelief" among NSSTA members. As one example of such "shocked disbelief", NSSTA attendees identified structured settlement factoring. More specifically, that factoring has dismantled many "permanent" structured settlement case "solutions" and that NSSTA's "proscriptive" political strategy for factoring (IRC 5891and the state protection statutes) has resulted unexpectedly in substantial secondary market growth.

Internet Transition - Patrick Hindert, S2KM's blog author, led a discussion titled "Web 2.0: How to Improve NSSTA's Online Communication. Learning and Collaboration". Hindert introduced and proposed a NSSTA wiki prototype designed to support NSSTA's committee policies and procedures.

For S2KM reports about prior NSSTA meetings as well as other settlement planning professional associations, see S2KM's structured settlement wiki.

Structured Settlements in 2008 - 1

This S2KM blog post, the first of three summarizing structured settlements in 2008, evaluates the year from an historical perspective. Two subsequent posts will:

• Summarize 2008 conferences attended by S2KM;
• Highlight challenges facing the industry in 2009.

"Structured Settlements and Periodic Payment Judgments" (S2P2J), co-authored by Daniel Hindert, Joseph Dehner, and Patrick Hindert, features historical summaries of both the primary and secondary structured settlement markets. S2P2J Release 44 is now available.

S2KM previously has published three online historical summaries of structured settlements:

• A visual history of structured settlements to 2005;
• Structured Settlements in 2006;
• Structured Settlements in 2007.

As these summaries demonstrate, the history of structured settlements includes many diverse and inter-related developments. From S2KM's perspective, the most strategically important years in the history of structured settlements prior to 2008 have been:

• 1982 - during which Congress enacted the Periodic Payment Settlement Act of 1982:
  • Adding "periodic payments" to IRC section 104(a);
  • Creating IRC section 130 and "Qualified Assignments";
  • Establishing a public policy to support structured settlements.
• 2001 - during which:
  • Congress enacted IRC section 5891to provide tax rules, definitions and penalties for transfers of structured settlement payment payment rights and to create a state run system for reviewing and approving such transfers;
  • CMS published its first policy memorandum for Medicare set-aside arrangements (MSAs);
  • The Society of Settlement Planners (SSP) was founded as an alternative to the National Structured Settlement Trade Association (NSSTA) which was formed in 1985.

Although it is premature to evaluate the full historical impact of 2008 for the structured settlement industry, the cataclysmic financial events of the past four months have already created serious repercussions for both the primary and secondary markets. The good news: thanks to the federal government bailout of AIG, no structured settlement recipients have suffered any loss of structured settlement payments to date because of the economic meltdown. The bad news: the U.S. economy and financial markets remain in jeopardy creating unprecedented challenges for the structured settlement industry in 2009.

2008 Structured Settlement Financial Summary

• The Wall Street Journal characterized September 14-20, 2008 as "The Week That Changed American Capitalism". Among other developments, United States Treasury Secretary Henry Paulson announced on September 16 the federal government had seized control of AIG in an $85 billion bailout. Paulson stated AIG had been only "hours from bankruptcy". On October 8, the Federal Reserve Board increased its loan to AIG by an additional $37.8 billion.
• AIG subsequently announced it planned to sell its North American life subsidiaries, including American General, as part of its plan to repay the bailout loan from the U.S. government. For additional information and continuing reports about the Federal government's bailout of AIG, see S2KM's AIG structured settlement wiki.
• Until September 2008, AIG had been the largest purchaser and the largest seller of structured settlements. In 2006, AIG sold more than $1.4 billion of the $6.1 billion annual U.S. structured settlement annuity premium. In 2007, AIG sold more than $1.4 billion of the $5.9 billion annual U.S. structured settlement annuity premium. During the first nine months of 2008, AIG sold more than $1.2 billion of the $4.4 billion of the U.S. structured settlement annuity premium.
• Along with other financial and insurance companies, the stock prices of structured settlement annuity providers have been battered during the fourth quarter of 2008. Some annuity providers have experienced rating downgrades. Analysts, investors and rating agencies have expressed concerns about the potential exposures these companies may have to failed or bailed out companies as well as the general decline in their stock portfolios and shareholder equity.
• On December 16, 2008, Aviva Life announced it was exiting the structured settlement business to concentrate its resources on less capital intensive businesses. Aviva joined other annuity providers who exited the structured settlement business during 2006 and 2007 including Mass Mutual, Genworth, Travelers and Aegon.
• The financial crisis has frozen the credit markets and shut down most asset-backed securitizations causing substantial problems for the secondary structured settlement market. In November, Standard & Poor's cut J.G. Wentworth's counterparty and senior-secured bank loan ratings from B- to CCC+ due to "severe dislocation of the credit markets" that have "rendered unprofitable" some financing transactions.
  
• On December 5, J.G. Wentworth announced the pricing of $74.6 million of Class A-1 Notes in connection with its 2008-3 securitization. The Class A-1 Notes were priced at 700 bps over benchmark interest rate swaps and will have ratings of Aaa and aaa by Moody's and A.M. Best respectively. The purpose: to provide the necessary proceeds to satisfy one of the conditions under J.G. Wentworth's November 28, 2008 margin call waiver agreement with Deutsche Bank to reduce warehouse loan indebtedness by $50 million.
• Although demand for settlement transfers has remained strong throughout 2008, discount rates have increased from 8% to 16% during the past six months.

S2P2J Release 44

Release 44 of "Structured Settlements and Periodic Payment Judgments" (S2P2J) will be available in December 2008.

Since S2P2J was first published in 1986, the authors have attempted to provide balanced and comprehensive coverage of structured settlement industry developments from a legal perspective.

S2P2J's co-authors, Daniel Hindert, Joseph Jules Dehner and Patrick Hindert have each studied, worked and written about structured settlements since the 1970s.

S2P2J's authors thank and acknowledge information and insights they continue to receive from many structured settlement trade associations and industry knowledge leaders. Special thanks to the National Structured Settlement Trade Association (NSSTA) Legal, Government Benefits and Certification Committees; and, more recently, to the Society of Settlement Planners (SSP). The authors appreciate and welcome your continuing contributions to S2P2J.

For S2KM reports about NSSTA, SSP and other professional structured settlement stakeholder associations, see S2KM's structured settlement wiki.

Since 2001, the authors have added two new chapters to S2P2J:

• Chapter 15: "Government Benefits and Structured Settlements"; and
• Chapter 16: "Transfers of Structured Settlement Payment Rights".

These new S2P2J chapters capture, organize and explain some of the strategic changes re-defining traditional (pre-2001) structured settlements. Release 44 features updates for both chapters.

S2P2J Release 44 also features new and updated sections titled:

• Section 3.07A: "Settlement Trusts"; and
• Section 6.02: "Structured Settlement Consultants".

All of these new chapters and sections re-enforce the growing "settlement planning" context for structured settlements.

The emerging profession of settlement planning:

• Increases the importance and complexity of structured settlements;
• Expands the knowledge requirements for structured settlement professionals;
• Encompasses non-qualified assignments and the secondary structured settlement market; and
• Integrates structured settlement annuities with government benefits, settlement trusts and custodial accounts.

S2P2J Release 44 updates structured settlement and settlement planning professionals about these continuing industry changes and developments. In addition to the new chapters and sections highlighted above, S2P2J Release 44 features updated commentary for:

• Non-qualified assignments;
• Punitive vs. compensatory tax allocations;
• The Murphy case;
• Frank Johns' proposed RFP for QSFs;
• The Medicare, Medicaid & SCHIP Extension Act of 2007 (MMSEA);
• New CMS rules for WCMSA annuities;
• The AIG bailout;
• The Fresno County factoring cases.

To order your updated copy of S2P2J, see this link. NSSTA members and SSP members receive purchasing discounts for S2P2J.

S2P2J Releases 43 and 44

ALM has published and distributed Release 43 of "Structured Settlements and Periodic Payment Judgments" (S2P2J). Co-authored by Daniel Hindert, Joseph Dehner and Patrick Hindert, S2P2J is a legal textbook first published in 1986 and updated semi-annually.

S2P2J Release 43 topics:

• Executive Life of New York (ELNY)
• Non-qualified structured settlements
• Single claimant 468B
• Factoring
  • Arbitration cases; and
  • DOJ's sovereign immunity defenses.
• Macomber v. Travelers
• Ohio 2007 laws for suitability and disclosure of annuities
• Constitutional findings on periodic payment statutes

Release 44 is a work-in-progress. Here are some of the highlights:

• Market growth - S2P2J Chapter 1 addresses the history and expanding use of structured settlements and periodic payments. For the past several years, the structured settlement industry has reported flat annual annuity sales of approximately $6 billion. Structured settlement legal developments, however, have continued to expand at an accelerating pace. S2KM's blog has reported recent market surveys sponsored by NSSTA and AIG. These studies, plus the growth of non-qualified assignments, will be addressed in Release 44.
• Settlement Trusts - S2P2J Release 44 will include a new Chapter 3 section titled "Settlement Trusts". This new section will organize and expand existing S2P2J coverage of settlement trusts which already includes detailed reporting about many types of settlement trusts and issues including the SBU and Stanwich debacles. The expanding markets for settlement planning and special needs planning highlight the increasingly important interaction of structured settlement annuities and settlement trusts including: government bond trusts; reversionary grantor trusts; settlement preservation trusts; special needs trusts; Medicare set-aside trusts; and IRC section 468B trusts. As settlement trusts continue to proliferate, criteria for selecting a settlement trustee becomes increasingly important and will be addressed in Release 44.
• Roles and Responsibilities - The NSSTA and AIG structured settlement market surveys each spotlight plaintiff attorneys (and presumably plaintiff structure settlement advisers) as important for future market growth. Release 44 will take a closer look at the structured settlement roles and responsibilities of plaintiff attorneys (in Chapter 5) and plaintiff structured settlement consultants (in Chapter 6). Release 44 will feature an expanded analysis of how the ABA Model Rules of Professional Conduct and SSP Standards of Professional Conduct impact key structured settlement stakeholders.
• Government Benefits - Release 44 will continue to expand and improve S2P2J Chapter 15 (Government Benefits and Structured Settlements). Featured topics will include the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA) as well as the continuing problems for structured settlements created by the Deficit Reduction Act of 2005 (DRA). Release 44 will highlight the need for more specific structured settlement legal authority related to Social Security, Medicare and Medicaid.
• Structured Settlement Transfers - The secondary annuity market represents a strategic challenge for the primary structured settlement market. S2P2J Chapter 16 continues to track and analyze secondary market developments. Release 44 will update state structured settlement protection legislation in West Virginia and Rhode Island. Release 44 also will continue to track business conduct of factoring companies including the Fresno County, California cases (Cox and Caldwell) and the Rapid Settlements arbitration cases.