When Len Blonder was elevated to the role of President of the National Structured Settlement Trade Association (NSSTA) for an unprecedented third time during NSSTA's 2016 Annual Conference, he identified a very clear vision for the structured settlement industry.
"The times are changing and we must change", Blonder stated in 2016, as he addressed NSSTA's membership to begin his third term as President. "The business is more complicated. We must determine how the parts fit together. Despite plaintiff growth, defendants remain indispensable to structured settlements. Defendants must continue to play a key role."
NSSTA's 2017 Annual Conference, which occurred April 19-21 in San Francisco, provided an educational program consistent with Blonder's vision. The conference also re-confirmed that now is an exciting time to be part of the structured settlement industry and that NSSTA is well-organized to address the current challenges and opportunities confronting the industry.
Speakers and Topics
- Opening Remarks - Len Blonder, NSSTA President
- NSSTA Objectives - Jim Early - NSSTA President Elect
- Access to Justice - Elise Sanquinetti; Laurie Klimchock; Melissa Baldwin (Moderator)
- NSSTA Board of Director Candidate Speeches
- My Story: Meg Hertzel-Busing; Mike Wostoupal (Moderator)
- Getting Claims Professionals Invested in Structured Settlements: Taylor Smith; Dean Harring; Al Luther; Brad Cantwell; Jerry Lothrop; Jim Early (Moderator)
- ABLE Act Implementation - Stephen Dale
- Government Benefit Programs - Amos Goodale
- Special Needs Attorneys and Structured Settlement Consultants: Morris Klein; Phillip Krause; Eric Vaughn; Patrick Hindert (Moderator)
- Washington Update - Eric Vaughn
- MSAs in Third Party Settlements - Robert Sagrillo
- A Claimant's Story: Judge Larry Quan (retired); John Allan); Eric Vaughn (Moderator)
- Educating Defense Counsel - Kathy Martin; John Kouris; Nolan Robinson (Moderator)
- Structured Settlement Education - Patricia Fairhurst; Debbie Sink; Jordan Bossler; Matt Ross.
- Protecting and Preserving IRC Sections 104(a)(1) and (2) and 130 - the existential foundation of the structured settlement industry. Among many individuals, past and present, responsible for organizing and maintaining the political coalition responsible for safeguarding these code sections (including the Congressional Structured Settlement Caucus), Blonder (now NSSTA's immediate Past President), NSSTA Executive Director Eric Vaughn, and NSSTA General Counsel John Stanton have been the longtime leaders of NSSTA's diligent and successful legislative and regulatory team. Without overlooking this traditional tax priority, NSSTA has also become more proactive in seeking new legislation and regulation (both tax and non-tax related) to expand structured settlement opportunities.
- Transitioning to Next Generation Leadership - NSSTA's leadership continues to balance experience with fresh thinking as evidenced by new NSSTA President James Early, President-elect Geoffrey Kissel and newly elected/re-elected Directors: Michelle Caine; Michael Goodman; Melissa Baldwin; Jordan Bossler; and Ross Duncan. Among NSSTA's retiring Directors, Randy Dyer is especially noteworthy. Dyer, who previously served as NSSTA's Executive Director during its formative years, also received this year's NSSTA's President's Award. Among NSSTA's conference speakers, Next Generation leaders Phillip Krause, Brad Cantwell, Nolan Robinson and Jordan Bossler were featured. Robinson and Bossler received NSSTA's Leadership Award for their shared contribution to NSSTA's educational programming.
- Transitioning to New Business Models - No longer simply a "zero sum" negotiation alternative (structure vs. cash), the future growth of structured settlements requires an in depth strategic re-analysis of two separate but related transitional markets (defendant claim management and plaintiff settlement planning) and how best to integrate structured settlements into those markets. Historically slow to provide its members with an in-depth, continuing educational focus on these developing markets, NSSTA's 2017 Annual Conference provided a valuable "deep-dive" into defendant claim management and special needs planning as it relates to plaintiff settlement planning - both of which are discussed below under "NSSTA Opportunities".
- Updating/Improving NSSTA Educational Programs - or how best to educate NSSTA members, who possess varying degrees of experience and who market to a diverse group of structured settlement producers and decision makers, to deliver high value services to their respective clients - with multiple additional objectives including: attracting new industry participants and knowledge leaders; helping industry participants develop skill sets needed for success in transitional markets; better utilizing Internet and other technology resources to improve educational efficiencies; competing (and collaborating) with other professional associations and providers for members' educational time and dollars. NSSTA has addressed this challenge by upgrading multiple educational offerings in addition to its Annual and Fall conferences (egs.CSSC program; NSSTA University; Structures 202). The 2017 Annual provided both a foundation and a perspective for future educational development.
- Overcoming Negative Secondary Market Publicity - During his term as NSSTA President (2015-2016), Michael Goodman identified several goals for NSSTA including "moving beyond a focus on factoring". One way to help accomplish this objective is to focus on the many positive, inspiring life stories of structured settlement recipients. NSSTA's 2017 Annual Conference presented two such stories. The first featured Meg Hertzel-Busing who suffered traumatic brain injury as a result of a car accident, then developed epilepsy. During college summers, she volunteered at a California camp for kids with cancer and their siblings. Seeing the positive impact, she made her life mission to bring life-affirming experience to children with epilepsy in the Midwest by founding, with her husband Kael, Midwest YouCan Foundation in 2011. The second featured retired Judge Larry Quan who received a structured settlement after sustaining a spinal cord injury resulting in quadriplegia.
- Other Challenges - Of course, NSSTA and its members have other challenges - such as low interest rates; adding new life companies; promoting greater diversity among its membership. However, by highlighting the challenges listed above during its 2017 Annual Conference, NSSTA's Board of Directors and its Education Committee demonstrated an appropriate awareness and focus that should enable NSSTA to successfully pursue its current Growth Initiative.
Rejuvenating Defense Programs
- During Michael Goodman's Presidency (2015-2016), NSSTA revised its historic and defensive "protect and preserve" strategy by embracing a new "Growth Initiative" - "designed to identify opportunities to expand the use of structured settlements and bring those opportunities to the structured settlement industry marketplace." Continued and expanded during Len Blonder's Presidency, NSSTA's first Growth Initiatives prioritized "Rejuvenating Defense Programs".
- Originally the prime movers for structured settlements, many defense insurers have since reduced or completely abandoned their structured settlement programs citing a variety of reasons. A NSSTA sponsored survey of claims professionals conducted by CLM Advisors in 2014 produced some troubling, yet opportunistic results and raised some important strategic questions for structured settlement brokers who market to defendants - as did an earlier CLM Advisors survey of senior claims executives also conducted for NSSTA.
- NSSTA's 2017 Annual Conference featured two outstanding panels addressing defense issues and opportunities: 1) "Getting Claims Professionals Invested in Structured Settlements"; and 2) "Educating Defense Counsel." The first panel, moderated by incoming NSSTA President James Early, featured three representatives of CLM Advisors including President Taylor Smith (who personally conducted the marketing surveys for NSSTA), as well as NSSTA brokers Brad Cantwell and Jerry Lothrop.
- The information generated from both panels provided a valuable supplement to NSSTA's earlier surveys and should help NSSTA's Growth Initiative Committee (and NSSTA members) accomplish its primary strategic objective. Examples:
- Professional backgrounds of today's claims executives have changed. They are less likely to be promoted from within the claims department and are more likely to be lawyers, accountants and/or MBAs hired from the outside. Question: what impact, if any, should this change in claims executive prototype have on structured settlement hiring practices and business strategy?
- These new claims executives focus more often on process rather than loss ratio. "What is important is what gets measured - and process gets measured," added one of the panelists. Observation: plaintiff structured settlement brokers transitioning to settlement planners are also emphasizing "process" - over "product" (see this S2KM report which includes the Society of Settlement Planner's (SSP)description of the "settlement planning process".). Question: How many defense brokers currently prioritize claim management process issues and metrics in their structured settlement marketing, sales and services?
- Also note, to double down on metrics - as S2KM previously reported, one of the "key findings" of a 2011 study titled: "National Litigation Management Study", conducted by CLM Alliance, the parent company of CLM Advisors, was: "litigation executives are not happy with the metrics and analytics available to them."
- One of the CLM Advisor panelists pointed out that "many young claim handlers don't understand structured settlements." They view structured settlements as "nothing more than post-settlement financial planning tools" and "have never seen any evidence that structured settlements save money." Questions: do structured settlements save money? If yes, in what context? (see next bullet). Focusing on claim management "process" (see above), should defense brokers develop a new structured sales strategy with supporting metrics - at least in this current economic/interest rate environment? For more on historic structured settlement metrics, see this 2011 S2KM blog series.
- Repeating a theme highlighted in NSSTA's 2014 surveys of both senior claims executives and claims professionals, one of the CLM Advisor panelists pointed out that claim adjustors "need help navigating Medicare Set-Aside (MSA) requirements." Every defense broker should understand exactly why his or her client can save money funding an MSA with a structured settlement as opposed to cash. For an explanation in the workers compensation context, see this S2KM blog post. Although CMS has not published similar rules for liability MSAs, many defendants are already utilizing structured settlements to fund liability MSAs and NSSTA's 2017 conference featured MSA expert Robert Sagrillo discussing that topic.
Special Needs Attorneys and Settlement Planning
- Within the personal injury settlement planning market, plaintiff structured settlement brokers interact with, and face competition from, other professional product and service providers who market to plaintiff attorneys. Among the most important of these other professionals are special needs attorneys. Settlement planning is now viewed as a growth opportunity by many special needs and elder law attorneys.
- Two national associations of special needs attorneys exist: the Special Needs Alliance (SN Alliance) and the Academy of Special Needs Planners (ASNP). SN Alliance members typically represent a majority of the speakers at the annual Stetson and University of Texas SNT conferences. The National Academy of Elder Law Attorneys (NAELA), to which most SN Alliance and ASNP members also belong, increasing emphasizes special needs as well as elder law issues among its educational and legislative lobbying priorities.
- Although their signature products are special needs trusts (SNTs), special needs attorneys play a variety of settlement planning roles (guardian; conservator; trustee; QSF administrator; in addition to legal advisor) and provide a variety of settlement planning legal products and services. Their expertise encompasses government benefits including: Social Security; Medicare; Medicaid; the Affordable Care Act (ACA); ABLE Act; veterans benefits; and public housing.
- Although special needs planning and settlement planning overlap in many respects, there are important differences. For example, "special needs" generally refers to birth-related or developmental disabilities. Special needs professional advice typically falls outside of the personal injury litigation process. Third party SNTs represent a prominent special needs planning tool rarely utilized in settlement planning. Unlike plaintiff structured settlement brokers, whose client relationships typically end once a case settles, the relationships of special needs attorneys and other special needs advisors may extend for their clients' lifetimes.
- Both plaintiff structured settlement brokers and special needs attorneys who practice settlement planning market their products and services to plaintiff attorneys who continue to perform the following essential settlement planning roles regardless of case complexity:
- Recognizing settlement planning issues which impact their clients;
- Recommending appropriate settlement planning professional resources to their clients; and
- Retaining ultimate responsibility for effectuating settlements.
- Logically, structured settlement brokers and special needs attorneys could and should be natural settlement planning marketing allies and work product collaboration partners. This strategic relationship, however, has never achieved its full potential. Among other reasons, one of NSSTA's historic public policy justifications for structured settlements ("structured settlements enable injury victims to live free of reliance on government assistance") positioned NSSTA and its members at odds with special needs attorneys (who specialize in government benefits) and also contradicted multiple structured settlement growth opportunities (Medicare set-asides; SNTs; ACA benefits) which require integrating structured settlement annuities with government benefits.
- To change the direction and dynamics of its relationship with special needs attorneys, NSSTA created a Special Needs Attorney Task Force in 2015 and made it part of its Growth Initiative Committee in 2016 with the following Mission: "to identify opportunities to expand the use of structured settlements and bring those opportunities to the structured settlement marketplace by:
- "Improving NSSTA's relationships with, and understanding of, SN attorneys and the primary national associations to which they belong;
- "Improving SN attorney’s knowledge and understanding of the benefits and appropriate applications for structured settlements;
- "Collaborating with SN attorneys in a professionally responsible and ethical manner to improve the lives of personal injury victims and their families."
- NSSTA's 2017 Annual Conference featured three special needs attorneys:
- Stephen Dale - One of the nation's leading disability law experts, Dale provided NSSTA attendees with an overview of the Achieving a Better Life Experience Act (ABLE Act), which was signed into law in 2014 and for which 18 states have now opened qualifying ABLE programs offering various investment options. For eligible, disabled individuals and their families, Dale recommended ABLE accounts as an important supplement and/or alternative to special needs and/or pooled trusts. He views ABLE accounts as a valuable, immediate marketing and sales opportunity for both structured settlement brokers and special needs attorneys.
- Amos Goodall - Goodall supplemented Dale's presentation with a general overview and introduction to government benefits. NSSTA and its members have traditionally emphasized and sold structured settlements based upon their inherent tax advantages compared with cash settlements. For many personal injury victims, however, maintaining Medicaid or other "means-tested" government benefits utilizing structured settlements may be an equally or more persuasive sales rationale. As pointed out above, current CMS rules for MSAs provide a cost advantage for structured settlements compared with cash.
- Morris Klein - Klein, Co-Chair of NAELA's Public Policy Committee joined NSSTA broker Phillip Krause and NSSTA Executive Director Eric Vaughn on a panel to discuss: 1) how structured settlement consultants can improve their business relationships with special needs attorneys; 2) current political priorities of the SN Alliance and NAELA; and 3) how NSSTA and those associations might collaborate in the future. Among recent legislative developments, Klein highlighted the SNT Fairness Act (SNTFA) as significant for clients of both special needs attorneys and structured settlement consultants.
CONCLUSION: To achieve strategic success, it is important for NSSTA to link its educational programming with its Growth Initiative opportunities and priorities. From S2KM's perspective, NSSTA's Educational Committee Co-Chairs Jordan Bossler and Nolan Robinson, and NSSTA's Executive Administrator Debbie Sink, should be congratulated for accomplishing that objective to a remarkable degree in San Francisco. In particular, NSSTA's 2017 Annual Conference presentations focusing on rejuvenating defense programs, as well as those featuring structured settlement recipients and special needs attorneys, should provide NSSTA with a solid foundation for future educational programming and help NSSTA with strategic and legislative prioritization. For S2KM reports about prior NSSTA educational conferences, see the structured settlement wiki.