Beyond Structured Settlements

National Settlement Consultants

National Settlement Consultants (NSC) hosted its second Annual Meeting at the Bedford Springs Resort May 1-3, 2008. The NSC meeting demonstrated why many industry experts view Michael and William Goodman, NSC founders and principals, as structured settlement leaders and visionaries.

In addition to Michael and William Goodman, the NSC presenters included representatives from ten (10) structured settlement annuity providers as well as several national settlement planning experts. Patrick Hindert, S2KM's Managing Director and blog author, was privileged to speak at the NSC meeting and also to attend NSC presentations and social functions.

Highlights from the NSC Annual Meeting

• Randy Snow - Randy Snow delivered a powerful, humorous, thought-provoking keynote address. Snow's message to NSC and the structured settlement industry - successful change requires:
  
  • Attitude;
  • Accountability; and
  • Action.
  • No excuses.
• John Heavenrich - NSC honored John Heavenrich as he retires from the structured settlement industry. Heavenrich was one of the founders of the structured settlement industry. He is revered by many peers as one of the most intelligent and honorable persons ever to work in the structured settlement industry. Heavenrich and Frank McKellar of Canada formed one of the earliest, most successful and longest-lasting international structured settlement partnerships. After serving his country in the U.S. Army, Heavenrich devoted his professional career to helping disadvantaged persons. With an MBA from Dartmouth and a law degree from Michigan, Heavenrich began his professional career providing legal aid to the poor. More recently, he helped build homes in New Orleans for families displaced by Hurricane Katrina. Heavenrich will be remembered within the structured settlement industry for his international vision, ethical leadership and focus on helping personal injury victims and other disadvantaged persons. Heavenrich is one of most interesting and inspiring professionals ever to work in the structured settlement industry.
• Annuity providers - Ten structured settlement annuity providers (and one property and casualty company) participated in the NSC Annual Meeting. The annuity provider participants included current and future structured settlement industry leaders. Both their presentations and informal conversations confirmed that current structured settlement annuity providers are committed to growing the industry. They want to partner with the best and the brightest consultants and lawyers to create innovative financial and insurance solutions for personal injury victims, their families, and their attorneys.
• Industry experts - This author appreciates participating among industry experts who spoke at the NSC Annual Meeting. NSC's program was well-organized to focus industry experts and leaders on structured settlement industry issues, problems, priorities and solutions. The resulting NSC "conversation" was reminescent of the structured settlement meeting sponsored by First Colony Life Insurance Company in October 1982 at the Homestead Resort in Virginia. The 1982 First Colony Meeting, which this author attended, provided the political focus and industry cooperation necessary to develop IRC Section 130 Qualified Assignments and to create the National Structured Settlement Trade Association (NSSTA). Instead of one annuity provider and many consultants, the NSC meeting featured one consultant company, ten annuity providers and several issue experts.

Structured Settlement Medicaid Update - a summary of the author's presentation at NSC's Annual Meeting:

• Acknowledgement - Hindert's presentation at NSC's Annual Meeting summarized recent presentations by David Lillesand, a leading social security and special needs attorney, at these conferences:
  • 2008 SSP Annual Meeting
  • 2008 ASNP Annual Meeting
• Context - according to industry leaders, structured settlements represents a "transitional industry".
  
  • See: "2008 NSSTA Annual Meeting"
  • Here is S2KM's 2006 analysis for the "Future of Structured Settlements"
• Industry Changes - When analyzing Medicaid from a structured settlement perspective, several other industry changes (structured settlement tsunamis) need to be considered:
  • Aging industry ownership - including current industry knowledge of and perspective about Medicaid;
  • Shifting control - defendant (claim management) to plaintiff (settlement planning)
  • Secondary markets - the impact of the secondary annuity markets on Medicaid
  • Competitive products - including proposals for disability savings accounts;
  • Internet transition - check current online pay-for-click prices for "structured settlement" as well as "Web 2.0 for Lawyers".
  • Other government benefits - proposed structured settlement solutions for Medicaid also need to consider structured settlement rules for Medicare, Section 8 Housing, Veterans' benefits and taxation.
• Market Analysis
  
  • What size are the current Medicaid (and Medicare) annuity markets?
  • How many structured settlement annuities were purchased in 2007 to fund special needs trusts?
  • What is the potential market for Medicaid annuities?
  • Within the structured settlement industry, who is analyzing the annuity market linked to government benefits?
  • Why hasn't NSSTA highlighted "government benefits" as a strategic priority for growing the structured settlement industry?
• Medicaid Analysis - Hindert's NSC Medicaid presentation summarized:
  • David Lillesand presentations at the
    
    • 2008 SSP Annual Meeting
    • 2008 ASNP Annual Meeting
  • History of Medicaid - from a structured settlement perspective;
  • Special Needs Trust legal authority - highlighting why SSA officials have declared the 2006 "Bernstein Letter" to be "Inoperative";
  • Special Needs Trust OBRA 93 requirements - highlighting potential conflicts with existing structured settlement tax rules;
  • Deficit Reduction Act (DRA) annuity rules - a "Pandora's box" for the structured settlement industry;
  • S2KM's proposed solution - how to grow the structured settlement industry by integrating structured settlements and Medicaid;
  • Additional resources - links to leading authorities for structured settlements and Medicaid.

Congratulations to Michael and William Goodman, as well as NSC and NSC's associates and partners, for your outstanding 2008 Annual meeting. Thank you for inviting this author to participate. The structured settlement industry needs enlightened and growth-oriented new leaders like you.

2008 NSSTA Annual Meeting - 2

S2KM summarized the 2008 Annual Meeting of the National Structured Settlement Trade Association (NSSTA) in a prior blog post (2008 NSSTA Annual Meeting - 1). This blog post highlights industry issues and S2KM questions resulting from the NSSTA meeting.

"Transitional Industry" - in his first comments to NSSTA's membership, new NSSTA Executive Director Joseph Ricci characterized structured settlements as a "transitional industry". NSSTA's 2008 President Chris Diamantis and Michael Miller, Chairperson of NSSTA's Legal Committee, reinforced Ricci's perspective of industry change.

Industry Issue: what is the future of structured settlements?

NSSTA's Analytic Framework - for the structured settlement market.

• NSSTA's immediate past President Henry Strong identified NSSTA's management priorities during the NSSTA 2007 Fall Meeting:
  • Expand the structured settlement market;
  • Recapture the structured settlement brand;
  • Improve NSSTA's Internet technology competences;
  • Increase NSSTA's financial strength and accountability.
• NSSTA's new President Chris Diamantis identified NSSTA's strategic priorities during the NSSTA 2008 Annual Meeting:
  • Factoring
  • Advocacy and marketing
  • Professionalism
  • Governance and communication

S2KM Questions

• Expand the structured settlement market
  • What market growth would result from successfully integrating structured settlements and other government benefits with legislation and regulations that specifically address structured settlements?
  • What legal authority currently exists for structured settlements with other government benefits - including Medicare; Medicaid; Section 8 Housing; and Veterans benefits?
  • What specific legislation and regulations are necessary and possible to accomplish this legislative integration and market growth?
  • What public policies and other trade associations would favor such legislation and regulations?
  • How will the secondary annuity market impact structured settlement rules for government benefits?
  • What is NSSTA's strategy for defining and enacting structured settlement rules for government benefits?
  • What education, alliances and lobbying will a successful strategy require?
• Recapture the structured settlement brand
  • Who has what ownership rights to the "structured settlement" brand?
  • Did factoring companies steal the "structured settlement" brand - or has the primary market abandoned its customers by failing to proactively identify and address customer needs?
  • What impact has NSSTA's post-2001 factoring strategy had upon the growth of:
    • The primary structured settlement market?
    • The secondary structured settlement market?
• Improve NSSTA's Internet competencies
  • How are the world's leading trade associations and communities of practice using the Internet?
  • What about trade associations with whose members NSSTA members regularly interact?
  • What learning strategies and tools do these associations and communities utilize for Internet-based communication, collaboration and knowledge management?
  • What are the current Internet skill sets, applications and tools of NSSTA and NSSTA members?
  • What Internet skill sets, applications and resources are most important for NSSTA and NSSTA's members?
  • How does the Internet impact the structured settlement brand and NSSTA's business model?
• Increase NSSTA's financial strength and accountability
  • What is NSSTA's current financial status?
  • What financial information does NSSTA share with its members?
  • What are NSSTA's options and strategy for increasing:
    • NSSTA membership?
    • NSSTAPAC contributions?
  • Should NSSTA members anticipate dues increases?
  • Are NSSTA dues increases necessary and/or justifiable?
  • From a financial perspective, what are NSSTA's most important resources and priorities?
• Factoring
  • Why is factoring NSSTA's #1 strategic issue?
  • What are NSSTA's current factoring objectives and strategy?
  • What successes can NSSTA identify for its post-2001 factoring strategy?
  • Will NSSTA's new factoring strategy include:
    • Industry leadership for structured settlement factoring transaction issues?
    • Education for NSSTA members and structured settlement stakeholders about the secondary markets?
    • Discussion about best secondary market practices for annuity providers and structured settlement intermediaries?
    • Communication and shared learning with the National Association of Settlement Purchasers (NASP)?
    • Review of the NSSTA Bylaw Amendments about factoring?
• Advocacy and marketing
  • What, and to whom, is NSSTA advocating and marketing?
  • What is NSSTA's political position for single claimant 468B funds?
  • What is NSSTA's strategy for growing the structured settlement market?
  • What is NSSTA's strategy for integrating structured settlements with other government benefits?   
    
  • What is NSSTA's Internet strategy for advocating and marketing structured settlements?
  • Which other trade associations represent potential NSSTA partners for advocating and marketing structured settlements?   
• Professionalism
  • What is the status of the Broker Relationship Initiative (BRI) and the BRI "Standards of Professional Conduct for Structured Settlement Consultants"?
  • Have any NSSTA Directors or representatives compared:   
    
    • The proposed BRI Standards of Professional Conduct with the SSP Standards of Professional Conduct ?
    • The NSSTA certification program (CSSC) with the SSP certification program (RSP)?  
    • NSSTA educational programs with SSP educational programs.
  • In advocating and marketing structured settlements, will NSSTA address standards of professional practice?   
    
• Governance and communication
  
  • What has NSSTA done to identify, recruit and promote the next generation of structured settlement leaders?
  • Who are the next structured settlement industry leaders?
  • How is NSSTA using the Internet to improve its governance and communication?   
    
  • What is NSSTA's policy and strategy for working with:
    
    • Other trade associations?
    • Structured settlement journalists?
  • Is NSSTA enforcing its recent factoring Bylaw Amendments?   
    
  • How does NSSTA evaluate its own performance - including the performance of its committees and management company?   
  • How can web 2.0 tools and technologies improve NSSTA's performance?

For additional S2KM coverage about NSSTA and related trade associations, see S2KM's Structured Settlement Wiki.

Disclaimer: Patrick Hindert, S2KM's Managing Director and blog author, is an associate member of NSSTA.  Hindert formerly served as a NSSTA President, Director, Treasurer, NSSTAPAC Chairperson, and Chairperson of NSSTA's Legislation and Regulation Committee.  Neither S2KM nor Hindert, however, speak for, or on behalf of, NSSTA or any other trade association or business organization.

2008 NSSTA Annual Meeting - 1

The National Structured Settlement Trade Association (NSSTA) hosted its 2008 Annual Meeting at the Hilton La Jolla Torrey Pines Resort April 16-19. Approximately 250 persons attended.

This S2KM blog post summarizes the 2008 NSSTA Annual Meeting.  A subsequent S2KM blog post will provide observations and commentary.

The 2008 NSSTA Annual Meeting lacked a specific theme and keynote speaker. However, in his brief introductory comments to NSSTA members, newly-named NSSTA Executive Director Joseph Ricci set the meeting tone when he characterized structured settlements as a "transitional industry". Ricci, representing SmithBucklin, NSSTA's new management company, succeeds Randy Dyer as Executive Director.  In La Jolla, NSSTA honored and thanked Elvie Lou Luetge, Dyer's longtime assistant, "for her many years of dedicated service to NSSTA".

Additional Highlights from the NSSTA Annual Meeting:

• Retiring NSSTA President Henry Strong introduced Chris Diamantis as NSSTA's 22nd President. Speaking on behalf of the NSSTA Board of Directors, Strong had earlier identified the following management priorities for NSSTA and SmithBucklin at the NSSTA 2007 Fall Meeting:
  • Expand the structured settlement market;
  • Recapture the structured settlement brand;
  • Improve NSSTA's Internet technology competences;
  • Increase NSSTA's financial strength and accountability.
• Diamantis confirmed a "New Age" for NSSTA with Ricci and SmithBucklin.  He also summarized the results from NSSTA's most recent strategic plan. To better "define and confront its challenges", Diamantis identified the following strategic issues as prioritized by NSSTA's Board of Directors:
  • Factoring
  • Advocacy and marketing
  • Professionalism
  • Governance and communication
• Diamantis introduced the following new Directors, elected by NSSTA's voting members, to replace retiring NSSTA Board members Jeff Bowers, John Roeser, and J.P. Steele:
  • Dan Durbin
  • Jim Logan
  • Larry Niemi
• Steele announced the results of a Structured Settlements Survey Report sponsored by AIG and conducted in September 2007 by Esearch.com, Inc. The results of the survey, which appear on the AIG website, highlight the need to better educate plaintiff attorneys and injury victims about structured settlements.
• NSSTA Lobbyist Eric Vaughn delivered an informative "Washington Report". Vaughn's report:
  • Analyzed the upcoming 2008 election from a structured settlement perspective;
  • Summarized current structured settlement legislative and regulatory issues;
  • Highlighted federal IRA-like proposals for "Disability Savings Accounts" as "the most critical legislative issue" confronting the structured settlement industry;
  • Announced NSSTA's intention to expand its legislative alliances with other trade associations;
  • Further reported:
    
    • A communication from a recent White House meeting where one participant predicted the structured settlement market could grow to $12 to $18 billion per year - if structured settlements can successfully be integrated with other government benefits including Medicare and Medicaid;
    • Congress has pushed back enforcement of the Deficit Reduction Act of 2005.  Regulations are expected.
  • CMS is not yet enforcing or requiring MSAs in liability cases.  Regulations are expected. 

• As part of a NSSTA Legal Committee educational report that also featured Vaughn and tax expert Tom Ronce, Committee Chairman Michael Miller: 
  
  • Echoed the theme of industry change by highlighting the growing number and complexity of structured settlement legal cases;
  • Summarized recent NSSTA Legal Committee education topics including:
    • Agent responsibilities and exposures;
    • Settlement documentation. 

• Provided only the second educational presentation about structured settlement factoring for NSSTA members since 2001 - the previous NSSTA presentation about factoring occurred at the 2007 NSSTA Winter Meeting. In addition to his historical overview of factoring, Miller also summarized results from 100 factoring cases in which his law firm, Drinker Biddle, has participated since January 2008.
  • Of the 100 cases:
    • State judges approved 88 cases and denied 2 cases;      
      
    • 10 cases were withdrawn prior to a judicial decision.      
      
  • Miller listed the discount rates for each case and characterized the discount rates as generally excessive. 

• Other topics and speakers at the 2008 NSSTA Annual included:
  • An Actuary's Perspective on Structured Settlement Pricing - Joel Cohn
  • State Guaranty Funds Primer - Craig Ulman
  • How to Educate Attorneys on Special Needs Trusts - Bradley Frigon
  • Etiquette Through the Eyes of the Mediator - Bill Burrow, Troy Roe, Andrew Albert, Pat Farber       
  • The Cost of Rating It Wrong - Robert Michael Shavelle, Vinaya Sharma
  • Mass Tort Insiders - Thomas Girardi, Pat Farber, Walter Lack      
  • Personal Branding - Peter Montoya
  • The Next Frontier - James Logan, Leah Jamison

For S2KM's most recent coverage of NSSTA see:

• 2008 NSSTA Winter Meeting
  
• 2007 NSSTA Fall Meeting
   

2008 ASNP Annual Meeting

The Second Annual Meeting of the Academy of Special Needs Planners (ASNP), titled "Beyond Nuts & Bolts: When Theory Meets Reality", took place March 27-29, 2008 in New Orleans. Open to non-ASNP members, ASNP's 2008 program attracted more than 100 attendees plus nine sponsors and exhibitors.

Program Chairperson Frank Johns, ASNP's founders and ASNP's staff are to be congratulated for maintaining the high educational standards ASNP established in 2007. In addition to the excellent presentations, ASNP's educational program featured detailed and valuable handout materials in hardcopy and CD ROM formats. The 2008 ASNP program was noteworthy, in part, because it offered multiple presentations highlighting settlement planning and structured settlement issues - many of which S2KM identified and recommended in S2KM's summary of ASNP's 2007 Annual Meeting.

Several ASNP program presentations featured members of the Society of Settlement Planners (SSP). In addition to Johns, SSP member presenters included Michele Whitmore, Tim Nay, Jack Meligan, Joseph Tombs, David Lillesand and this blog's author, Patrick Hindert. Several additional SSP, National Structured Settlement Trade Association (NSSTA) and National Association of Settlement Purchasers (NASP) members participated as sponsors, exhibitors and/or attendees.

Summary of the 2008 ASNP Annual Meeting

Families Helping Families - ASNP's "extra-curricular" program in New Orleans featured a social service project where 30 ASNP conference attendees assisted Families Helping Families of Southeast Louisiana repair and improve its office headquarters. Many special needs professionals have disabled family members. Their commitment to disabled persons is genuine. The ASNP work project represented a hands-on demonstration of their commitment and complemented the participation and support NSSTA and SSP provided earlier this month in Washington, D.C. for the AAPD Leadership Gala Dinner.

Special Needs Trusts for Wealthy Families - Michael Gilfix opened the ASNP Educational Program with a detailed analysis of the challenges facing special needs planners whose clients include wealthy families with disabled members. Gilfix's analysis addressed the meanings of "wealth" and "disability" in the context of public benefits as well as planning considerations to meet the cost of care and services for such clients.

Tax Considerations of Grantor vs. Non-Grantor Trusts - Vincent Russo provided a tax-oriented introduction to various trusts used in special needs planning. Russo identified drafting issues, reviewed a Fiduciary Income Tax Return (Form 1041) and highlighted a variety of "tax traps". Russo's discussion supplemented his tax presentation at the 2007 ASNP Annual Meeting.

Special Needs Financial Planning - Two financial planners, Cynthia Haddad and Sal Salvo, offered an overview of comprehensive special needs financial planning. Haddad reviewed sample case studies from a book she co-authors. Salvo discussed the role of life insurance and shared his experience of caring and planning for his own disabled child.

Secondary Life and Annuity Markets - This blog's author introduced ASNP members to life settlements, structured settlement transfers and Medicaid annuity transfers. Issues addressed included secondary market history, public policy considerations, existing laws and regulations, and reactions from the primary markets - as well as the professional responsibilities and planning options for special needs attorneys.

Prudent Investment - William Browning discussed the management role and investment duties of trustees for special needs trusts. Browning's presentation highlighted the general impact of the Uniform Prudent Investor Act (UPIA) for trustees in the context of modern portfolio theory as well as recent litigation against trustees.  Browning's presentation did not mention structured settlement annuities.

Ethical Pitfalls for Attorneys Acting as Fiduciaries - Frank Johns addressed ethical challenges special needs attorneys encounter when representing a fiduciary or serving as self-appointed fiduciaries. Johns' commentary included consideration of the ABA Model Rules of Professional Conduct, the NAELA Aspirational Standards and the ACTEC Commentaries to the Model Rules of Professional Conduct.

Difficult Trust Beneficiaries - Patricia Dudek and Cynthia Barrett shared their personal experiences and recommendations for special needs attorneys and trustees who encounter difficult trust beneficiaries including distribution authority and strategies for avoiding professional liability.

Trusts and the Funding of Tort Recoveries - Michele Whitmore reviewed the relationship of structured settlements and special needs planning from a settlement planning perspective. Whitmore summarized the history of structured settlements and highlighted various abuses including how "over-structuring" has contributed to the development of the secondary annuity market. Whitmore recommended a collaborative and plaintiff-controlled settlement planning strategy based upon damage analysis, 468B Qualified Settlement Funds, Medicare Set-Aside Arrangements and Special Needs Trusts.

Settlement Planning and Special Needs Planning - Tim Nay moderated a panel discussion featuring Jack Meligan and Joseph Tombs that highlighted collaboration opportunities for settlement planners and special needs attorneys. Meligan differentiated needs-based settlement planners from product-based structured settlement intermediaries. Meligan criticized defendants who seek to control or restrict any claimant's right to select his or her own settlement advisors and products. He summarized the mission and history of the Society of Settlement Planners (SSP) and noted the recently adopted SSP Standards of Professional Conduct. Tombs outlined the SSP Registered Settlement Planner (RSP) certification program and distinguished a settlement planner from a plaintiff structured settlement broker.

Personal Injury Litigation - Evan Krame and Diedre Wachbrit offered advice and recommended guidelines for special needs attorneys who work with trial attorneys. Their presentation included advice for special needs attorneys about structured settlements and structured settlement advisors. They also identified several trust companies that currently offer special needs trust services.

Why Fiduciaries Get Sued - Richard Milstein and Frank Johns examined several areas of trustee liability and discussed special needs trust case studies that highlighted areas of greatest risk for trustees. Milstein and Johns included their own list of the top ten reasons special needs trustees are sued as well as their recommended remedies.

SSI Rules for Trust Administration - Ken Brown and David Lillesand discussed current Supplemental Security Income (SSI) rules and issues impacting the administration of special needs trusts. Brown summarized the general SSI rules for disbursements from trusts as well as specific rules relating to home ownership. Lillesand outlined the sources of SSI law and summarized trust administration and trust creation issues. Both Brown and Lillesand addressed structured settlements. According to Brown, the Social Security Administration (SSA) has identified structured settlements for future POMS but they are not currently a priority. According to Lillesand, the lack of structured settlement POMS continues to pose a risk for those claimants and their attorneys who attempt to fund special needs trusts with structured settlement annuities. If and when structured settlement POMS are drafted, Lillesand recommended the POMS should also address secondary market annuity issues.

Section 8 Housing and Special Needs Trusts - Kevin Urbatsch explained why special needs trusts and Section 8 Housing rules are not fully compatible. According to Urbatsch, some local public housing agencies (PHAs) are taking the position that every distribution from a special needs trust qualifies as income for the Section 8 recipient including distributions for medical expenses. This result can cause the elimination of a Section 8 voucher. Re-qualification for Section 8 may take months or even years.

Sponsors and Exhibitors

• MassMutual
• J.G. Wentworth
• Legal Directives
• ResCare Premier
• CORE Health Care
• MetDESK
• The Halpern Group
• First Capital Surety & Trust
• Wells Fargo

For additional information about structured settlements, see S2KM's Structured Settlement Wiki.

Structured Settlement Wiki

S2KM has published a structured settlement wiki.

S2KM's objectives and purposes:

• Publish a wiki for structured settlement professionals and stakeholders.
• Feature industry issues and knowledge leaders in web 2.0 formats.
• Encourage industry practice communities and networks to use wikis.
• Better integrate S2KM's publications with other authors, publishers and publications.

S2KM will continue to publish S2KM's blog "Beyond Structured Settlements" including future posts announcing structured settlement wiki updates.

SSP 2008 Annual Meeting - 2

The Society of Settlement Planners (SSP) hosted its 2008 Annual Meeting in Washington, D.C. on March 5-7.  Approximately 75 persons attended the SSP meeting including settlement planners, special needs attorneys and annuity provider representatives. Under direction from 2007 SSP President Anthony Alfieri and Program Chairperson Jack Meligan, SSP's 2008 educational program matched the high standards of previous SSP programs.

During SSP's business meeting, SSP members:

• Adopted the "Standards of Professional Conduct for Settlement Planners"; and
• Elected new officers and directors .
  
  • SSP elected Greg Maxwell as 2008 President and Joseph Tombs as SSP Vice President.
  • SSP Directors include: Richard Bishop; Charles Derenne; Paul Lesti; Tim Nay; and Richard Risk.
  • Nay, the first-ever President of NAELA, is also the first-ever special needs attorney to serve on SSP's Board of Directors.

SSP's Educational Program

• Ethics
  • The SSP Code of Ethics (titled: "Standards of Professional Conduct for Settlement Planners") represents a multi-year SSP project initiated and managed by SSP Director and attorney Richard Risk.
    • Carl A. Pierce, distinguished professor of law at the University of Tennessee and a reporter for the latest revision of the American Bar Association's Model Rules of Professional Conduct, assisted SSP with this ethics project.
    • Pierce introduced drafts of SSP's Code of Ethics at both the 2007 and 2008 SSP Annual Meetings.
  • Frank Johns, a leading special needs attorney and settlement planning ethicist, also advised SSP on its Code of Ethics. Johns, an SSP member, delivered SSP's featured dinner address. Johns' comments focused on ethical considerations for judges, plaintiff attorneys and trustees when selecting a structured settlement or settlement planning professional. Johns' 2008 SSP presentation also featured his proposed Request for Proposal (RFP) for settlement planners. Johns first introduced his ideas for a settlement planner RFP at the 2007 Advanced Elder Law Institute.
• Tax Panel
  • Organized by structured settlement attorney and moderator Richard Risk, SSP's Tax Panel has become the best tax discussion in the structured settlement industry.
  • In addition to Risk, SSP's 2008 tax panel participants included:
    
    • Jody J. Brewster, Tax Partner with Skadden Arps Slate Meagher & Flom;
    • Glenn F. Mackies - Tax Partner at Deloitte & Touche.
    • Michael J. Montemurro - Branch Chief at the Internal Revenue Service responsible for Income Tax and Accounting;
  • The SSP tax panel addressed several topics with single claimant 468B receiving the most attention. The structured settlement industry is waiting for written guidance from the United States Treasury Department as to whether IRC section 468B applies to single claimant cases. SSP's tax panel provided a detailed look at these single claimant 468B issues:
    • The language in IRC section 468B and existing regulations;
    • Technical and policy Issues created by the language;
    • Technical and policy arguments for and against single claimant 468B funds;
    • Impact of economic benefit on single claimant and multiple claimant 468B funds;
    • Defining single claimant and multiple claimants within IRC section 468B.
• Government Benefits -SSP devoted three presentations to government benefit issues.
  • Medicaid
    • David Lillesand, a national leader among social security and special needs trust attorneys, dropped a bombshell on the structured settlement industry at the SSP meeting.
    • Based upon Lillesand's discussions with Social Security officials including Ken Brown, Lillesand declared "inoperative" Nancy Veillon's January 31, 2006 letters to attorneys Roger Bernstein and Jay Sangerman representing the National Structured Settlement Trade Association (NSSTA).
    • NSSTA's letters from SSA are inoperative, according to Lillesand, because:
      • NSSTA's letters from SSA do not represent meaningful authority inside the SSA. POMS yes. Letters no.
      • NSSTA's letters predate (by one week), and fail to address or consider, the Deficit Reduction Act of 2005.
    • Lillesand said he expects the SSA to issue new POMS within the next few weeks.
    • However, the new POMS will not address structured settlements. Lillesand stated "The SSA Office of General Counsel will not approve structured settlement POMS at this time".
    • Lillesand and Ken Brown of the SSA will be featured speakers at the ASNP 2008 Annual Meeting March 27-29 in New Orleans.
    • Lillesand's 2008 SSP presentation focused on the "life or death" issue of Medicaid insurance for disabled persons - plus the challenges and risks for special needs attorneys who recommend annuities as funding and investment options.
    • Lillesand's SSP presentation, and his excellent supporting SSP paper, define serious immediate challenges for structured settlement and settlement planning professionals.
    • Lillesand's proposed solution:
      
      • A collaborative (multi-trade association) initiative focused on annuities and government benefits.
      • And specifically for Medicaid and structured settlements:
        
        • Convince SSA to draft POMS favorable to annuities and structured settlement annuities.
        • Incorporate the January 31, 2006 NSSTA letters into the POMS.
  • Medicare
    • SSP offered two presentations about Medicare.
      • One titled "Medicare Compliance - Medicare Set Asides (MSA) - Beware of the Medicare Super Lien" featured Paul K. Isaac and Benjamin M. Basista.
      • The other titled "Nuts and Bolts of Medicare Set Aside Arrangements" featured Douglas L. Shaw and Marge George-Ratz of Medivest.
    • For this author, neither SSP  Medicare presentation focused satisfactorily on annuity issues related to Medicare Set-Aside arrangements.
    • Request for future SSP and NSSTA presenters about Medicare Set-Aside arrangements:
      • Summarize in your presentations CMS Policy Memoranda addressing structured settlement annuities - especially the CMS October 15, 2004 Policy Memorandum;
      • Context the CMS structured settlement policy memoranda within Medicare legal authority generally;
      • Identify any Medicare legal authority that updates or supersedes the October 15, 2004 CMS Policy Memorandum;
      • Identify the issues, opportunities and risks for settlement planners and structured settlement professionals.
      • Recommend strategies to advance the use of annuities as part of developing government benefit legislation and regulations.
• Secondary Life and Annuity Markets
  • SSP's panel discussion titled "What Settlement Planners Need to Know about the Secondary Markets" expanded previous trade association discussions about structured settlement transfers (aka factoring).
  • This author moderated the SSP secondary market panel discussion which featured:
    • Rhonda Bentzen - a secondary market intermediary who is an honorary member of SSP and serves as Chairperson of SSP's Membership Committee.
    • Stephen R. Harris - a partner at Drinker Biddle & Reath who represents annuity providers;
    • Earl S. Nesbitt - the Executive Director of the National Association of Settlement Purchasers (NASP) who represents factoring companies.
  • The SSP secondary market discussion offered multiple informative perspectives on this controversial topic. It also included questions by SSP members to Nesbitt for NASP members focused upon:
    • Alleged predatory advertising by factoring companies;
    • Alleged improper use of the term "structured settlement" by factoring companies;
• Nesbitt promised to communicate SSP's concerns to NASP members.
• Legislation and Litigation Update
  • 2008 SSP President Greg Maxwell provided a summary of recent legal developments impacting settlement planners and structured settlement professionals.
  • 2007 SSP President Anthony Alfieri updated a tax analysis of sexual abuse cases.
• Case Studies - SSP offered three presentations about settlement planning advice and developments.
  • Professor Joseph Tombs introduced the "Tombs' Dissipation Index" as a settlement planning tool;
  • Jack Meligan and Michele Whitmore analyzed multiple settlement planning scenarios and recommended settlement planning techniques and tools.
  • Ward Zimmerman moderated a panel discussion about negotiation tactics featuring Charles Derenne, Michele Whitmore and Jack Meligan.
• Internet Marketing
  • Mathew Hayes provided insights and strategies to improve SSP member email marketing.
  • Hayes' SSP presentation paralleled Mark Wahlstrom's marketing presentation at the NSSTA 2008 Winter Regional Meeting;
  • In this author's opinion, Hayes and Wahlstrom should expand their Internet presentations to include emerging web 2.0 technologies and tools such as blogs, wikis and podcasts.
    

For prior S2KM coverage about:

• SSP - see this S2KM blog post.
• Web 2.0 - see this S2KM blog post
• Deficit Reduction Act of 2005 - see this S2KM blog post
• Medicare, etc. Extension Act of 2007 - see this S2KM blog post.
• Secondary Life and Annuity Markets - see this S2KM blog post.

Patrick Hindert, S2KM's blog author, is a member of SSP.

Addendum 03132008

S2KM's original post above failed to report two important events from the SSP meeting:

• David Synder - SSP honored Snyder as a founding member of the Society of Settlement Planners and historic leader among settlement planners and structured settlement professionals.  Snyder recently announced the sale of his former company Delta Settlements to Michael Upchurch.
• AAPD Leadership Gala dinner - The 2008 AAPD Gala was even better than advertised and raised more than $1 million.  Both SSP and NSSTA members attended. NSSTA was an event sponsor.

2008 AAPD Leadership Gala Dinner

On March 5, 2008, the American Association of People with Disabilities (AAPD) will host its 2008 Leadership Gala Dinner in Washington, D.C. Structured settlement leaders from both NSSTA and SSP will be attending the AAPD dinner - in addition to many Congressional and Disability leaders. Senator Bob Dole will be the Keynote Speaker. NSSTA is one of the event sponsors.

Founded in 1995, AAPD, according to its website , "is the largest cross-disability membership organization in the United States, working toward the economic self-sufficiency and political power for the more than 50 million Americans with disabilities. AAPD organizes the disability community to be a powerful force for change – economically, politically, and socially....AAPD works in coalition with other disability organizations for the full implementation and enforcement of disability nondiscrimination laws, particularly the Americans with Disabilities Act (ADA) of 1990 and the Rehabilitation Act of 1973".

The AAPD Leadership Gala Dinner serves as "a forum", according to the AAPD website: "for recognizing, empowering, and supporting both emerging and established leaders in the disability community, as well as for inspiring and mobilizing all attendees to increase their advocacy in support of realizing the promise of the Americans with Disabilities Act (ADA)."

The AAPD Gala will honor the 2008 recipients of AAPD's two leadership awards:

• Paul G. Hearne/AAPD Awards - Brett Eisenberg and Rahnee K. Patrick.
• Henry B. Betts Award - Eric Rosenthal.

Andrew J. Imparato, President and CEO of AAPD, was the featured speaker at NSSTA's 2007 Fall Meeting in Tampa, Forida. Imparato is a visionary and inspirational leader. The following comments appear in S2KM's earlier blog commentary about Imparato's presentation to NSSTA.

Andrew Imparato:

• "Outlined AAPD's strategy to:
  • Unite disabled persons as a political block and business market;
  • Change the social security statutory definition of "disability":
    • From "unable to work" to
    • Address "barriers to work" for disabled persons;
  • Create a disabled middle class - transitioning the disabled from poverty to economic self-sufficiency;
  • Extend some variation of the current structured settlement legislative model to disabled persons generally.
• "Identified AAPD's political priorities for:
  • Social Security Disability Insurance (SSDI);
  • Supplemental Security Income (SSI);
  • Medicaid; and
  • Medicare.
• "Criticized current United States' government benefit programs for:
  • Maintaining people in poverty and punishing people who try to escape poverty;
  • Not designing Medicaid and Medicare for working age persons who want to work.
• "Encouraged NSSTA members to involve themselves at the local level with independent living centers.
• "Invited NSSTA members to join AAPD and attend AAPD's March 5, 2008 Gala in Washington, D.C."

Both NSSTA and SSP are to be congratulated for supporting AAPD. The annual AAPD Gala Leadership Dinner provides an appropriate forum for NSSTA and SSP to begin to identify common goals and collaboration opportunities.

For S2KM's most recent reporting about:

• The National Structured Settlement Trade Association (NSSTA) - see this S2KM blog post.
• The Society of Settlement Planners (SSP) - see this S2KM blog post.
• Note: Patrick Hindert, S2KM's blog author, is a member of AAPD, NSSTA and SSP.

Who is Michael Upchurch?

Earlier this week, David and Dorothy Snyder announced that Michael A. Upchurch had purchased The Delta Group of Settlement Companies effective March 1, 2008.  As the new owner, Chairman and CEO of Delta Settlements, Michael Upchurch becomes a prominent stakeholder and participant in the structured settlement market. Upchurch agreed to provide S2KM with the following exclusive interview.  Upchurch responded in writing to S2KM's written questions:

What is your professional background?

After graduating with an MBA from Southern Methodist University, I began my professional career with IBM. At IBM, l specialized in the integration of advancing technologies into established business processes. This skill set appears to be increasingly important within the structured settlement and settlement planning industries.

In 2003, I entered the structured settlement industry with Ringler Associates. The following year, I decided to focus exclusively on helping injury victims and their attorneys. In 2004, I left Ringler and formed Upchurch Financial Services (UFS). During the past four years, UFS has enjoyed positive and productive relationships with Millennium Settlements and National Settlement Consultants. Throughout this learning process, I have attempted to distinguish myself as a leading structured settlement consultant. My focus has been on increasing the overall utility of the settlement and the efficiency of the settlement process.

Effective March 1, 2008, David Snyder and Dorothy Snyder have announced the sale of Delta Settlements to me. I am honored to be associated with Delta, Dave and Dorothy and excited about the future of Delta Settlements and structured settlements.

What are your interests outside of business?

My wife, Holly, is my college sweetheart from Emory University. We have three children Mick (10), Isabella (8) and William (5). Whatever personal time I have is devoted to my family.

What prompted you to enter the structured settlement industry?

My father, John J. Upchurch, introduced me to structured settlements. My father is a former judge who was instrumental in establishing the mediation legislation in the state of Florida. He retired from the bench and established a mediation practice that has become one of the most successful and respected mediation firms in the United States. As a mediator, my father helps resolve complex cases every day.

My father taught me the challenge and importance of meeting the medical needs of catastrophic injury victims - how to deal with ongoing medical expenses even before a case is settled. That planning challenge requires knowledge about Medicaid and Medicare. My father pointed out the disconnect that frequently occurs among the victims' legal and financial advisors, as well as the defendants, in addressing medical expenses.

My father recognized early the importance and opportunity for integrated analytics, financial services and care solutions. My father thought my business talents and interests would be a good match for the structured settlement and settlement planning industries.

What successes have you achieved in your structured settlement career to date?

I have been fortunate to have great teachers and mentors. I have learned from some of the most influential trial attorneys in the state of Florida. Specifically, E. Clay Parker has played a key role in my professional development. Clay taught me how to evaluate different insurance policies and understand the relationships between the different defendants and key insurance stakeholders. This type of analysis is extremely important when advising trial attorneys on settlement strategy. As a structured settlement professional who advises trial attorneys, I have the opportunity to communicate and practice Clay's lessons on a weekly basis.

Within the structured settlement industry, I have learned from some of the industry leaders. Scott Hoover taught me about the defense side of the business. Chris Diamantis taught me the challenges of building, managing and maintaining a multi-disciplined settlement firm. Most recently, Michael and Bill Goodman taught me about execution, organizational development and excellence. Michael and Bill have been exceptional friends and mentors.

My past successes are defined by my personal structured settlement production. Upchurch Financial and Delta Settlements will continue to be production leaders within the structured settlement industry. In addition to growing the structured settlement market, however, I want to improve the structured settlement industry. I want to do more for personal injury victims and their families.

What changes do you see occurring in the structured settlement market?

This is an exciting time to be part of the structured settlement industry. Many changes are creating new business opportunities. Obviously, the impact of government benefits is significant. Medicaid and Medicare legislation is re-defining structured settlements and settlement planning. Trusts and other banking products are important and those markets will continue to grow rapidly. The secondary markets are impacting all financial and estate planning - including structured settlements. I want Delta to become the most knowledgeable structured settlement company about the secondary markets. We need to help personal injury victims before and after the settlement. The Internet impacts everyone and every business. Delta will continue to be a technology leader within the structured settlement industry.

What opportunities do you see to grow the structured settlement market?

NSSTA published some market research last year that indicated we have hardly scratched the surface in developing the structured settlement market. Annuities are great products. We are fortunate to have excellent federal and state legislation for structured settlements. If we can develop the same type of rules for Medicaid and Medicare, structured settlements have a great future. It is important for all structured settlement stakeholders to understand the issues and to collaborate to develop the opportunities.

Why did you purchase Delta Settlements?

Delta Settlements is a fantastic company. Delta has wonderful owners, outstanding producers and employees. I am honored to be associated with Delta. Dave and Dorothy Snyder and my family share many of the same personal and business values. Delta has an important future. Delta is strategically positioned for success.

What role do you anticipate Delta will play in the structured settlement market?

Delta will continue to be a leader. We want to build upon the legacy and success that Delta has already achieved. We want to be the best structured settlement company - whatever positive performance metrics you apply.

How do you see the following developments impacting structured settlements?

• Government benefits - Medicaid and Medicare legislation have already revolutionized structured settlements. Any structured settlement leader who wants to remain a leader must offer knowledge, services and skill sets specific to government benefits.
• Secondary markets - The secondary markets are a legal and business reality. Unfortunately, our industry has not yet developed an adequate strategy to address the issues created by factoring. As an industry, we should be more proactive in developing best practices related to factoring. We should advise our clients before and following the settlement. Where factoring is appropriate, we should assist the original structured settlement recipient to obtain as much money as possible. Delta Settlements wants to play a leadership role in helping our industry develop a more enlightened, and more effective, factoring strategy. If done correctly, we can improve our sales growth as well as improve the secondary market.
• Internet technologies - As you might guess with my background at IBM, I am very focused on integrating technologies into the structured settlement market. Over the past three years, Upchurch Financial has built and tested a technology-based marketing and case management system. Over the coming year we will extend this platform to Delta and many of our clients. In addition, we anticipate using Delta's website as a platform to provide services and applications for our consultants and clients. Strategically, we expect our technology expertise to be an important differentiating advantage in the structured settlement marketplace.

For additional information about Delta Settlements, see S2KM's blog post titled "Michael Upchurch Purchases Delta Settlements".

Michael Upchurch Purchases Delta Settlements

David Snyder, owner, President and CEO of the Delta Group of Settlement Companies, and his wife Dorothy Snyder, have announced the sale of their company to Michael Upchurch of Jacksonville, Florida. Upchurch currently owns Upchurch Financial Services (UFS).

In his February 26, 2008 announcement to Delta Settlement employees, Snyder stated: "UFS will purchase the controlling stock of Delta Group on or about March 1, 2008.  Michael [Upchurch] wishes to maintain the Delta Group name and will retain the company brand. He will assume the position of Chairman of the Board/Chief Executive Officer, and I will retain my position as President of the company at least through the end of this year. Dorothy Snyder and her staff in the San Juan Capistrano Home Office of Delta Group have agreed to remain with the company to assist Michael with the transition."

In his communication, Snyder added: "One of the main reasons Dorothy and I selected Michael Upchurch to purchase our company is that we felt he will bring much needed "added value" to you, the Producers. ... We are confident that once you have had a chance to work with Michael, you too will feel comfortable with his honesty and integrity, and will help him grow the company to become the foremost plaintiff firm in the business."

Upchurch was equally positive about Delta Settlements and structured settlements: "Structured settlements is a great business with a great future.  Dave and Dorothy Snyder are structured settlement pioneers and visionaries. They deserve tremendous thanks from our industry for what they have contributed. Delta Settlements and the Snyders have mentored and launched many current structured settlement leaders.  I am honored and excited about my new relationship with Delta.  Delta Settlements and structured settlements have tremendous upside potential.  With support from Dave and Dorothy, as well as Delta's employees and Delta's product providers, Delta will continue to distinguish itself as a structured settlement industry leader."

The Delta Group was founded in 1990 by David and Dorothy Snyder and Charles Bradford. The Snyders purchased Bradford's share of Delta Group in 1995. The Delta Group has helped launch several structured settlement firms whose founders and owners began their structured settlement careers with the Delta Group including: Bradford & Associates of Atlanta Georgia; Millennium Settlements of Tallahassee Florida; and The James Street Group of Austin Texas.

West Virginia House Bill 4380

The 2000 agreement between the National Structured Settlement Trade Association (NSSTA) and the National Association of Settlement Purchasers (NASP) to support the Model Structured Settlement Protection Act (Model Act) appears to be in jeopardy this week in West Virginia.

Since 2000, NSSTA and NASP have jointly promoted the Model Act to state legislatures with considerable success including support from state attorneys general, state bar associations and the National Conference of Insurance Legislators (NCOIL). Forty-eight states have enacted structured settlement protection statutes many of which are patterned after the Model Act.  Recent amendments to these state protection statutes, such as Pennsylvania Rule 229.2, have generally received favorable reviews from both NSSTA and NASP.

NASP representatives, however, are accusing NSSTA of violating their legislative agreement by failing to oppose West Virginia House Bill 4380. Currently under consideration by the West Virginia House Banking and Insurance Committee, House Bill 4380 would amend and reenact Section 46A-6H-3 of the Code of West Virginia titled "Transfers of Right to Receive Future Payments".

The stated purpose of House Bill 4380 is "to increase protection of beneficiaries to structured settlements as they relate to settlement transfers". In its current form, House Bill 4380 contains three controversial provisions not included in the Model Act:

• A requirement for a court to approve a guardian ad litem for the consumer in all transfer cases;
• A "clear and convincing evidence...of financial hardship" standard in addition to the Model Act's "best interest" standard;
• A maximum discount rate not to exceed "the current annual average percentage rate of interest on twenty year residual mortgages offered in this state, as determined by the banking commissioner."

Representatives of NASP, which opposes House Bill 4380, claim the above provisions violate the Model Act and, if enacted, could effectively end structured settlement transfers in West Virginia. NASP representatives have called upon NSSTA to honor its agreement to support the Model Act by opposing House Bill 4380. NASP contends that NSSTA's failure to oppose House Bill 4380 is a de facto violation of their 2000 legislative agreement and threatens future cooperation between the two trade associations. In addition, they point out that Ronald N. Walters, one of legislative sponsors of House Bill 4380, also manages the Charleston, West Virginia office of Structured Financial Associates, Inc. (SFA).  SFA is a NSSTA member.

According to a NSSTA source, however, "NSSTA has had nothing to do with introducing House Bill 4380.  Although NSSTA does not intend to oppose House Bill 4380, NSSTA still approves the Model Act."

For additional information about state protection laws, see Section 16.04 ("Structured Settlement Protection Acts") in "Structured Settlements and Periodic Payment Judgments".