Beyond Structured Settlements

NSSTA 2005 Annual Meeting 2

Several persons, including Len Blonder and Mike Tucker, have provided valuable feedback to my earlier weblog post NSSTA 2005 Annual Meeting 1.   Having re-read the article with their input, two additional comments are appropriate.

1.  NSSTA's Accomplishments: although I disagree with some NSSTA positions (both policies and issues), NSSTA has achieved important accomplishments for both its members and for other participants within the structured settlement and settlement planning industries.  For example, an earlier weblog post entitled "NSSTA 2005 Annual Meeting" references, and probably should have highlighted, NSSTA's recent accomplishments relating to plaintiff attorney compensation.

2. Business Standards and Practices: business standards and practices impact all participants in the structured settlement and personal injury settlement planning industries.  Many rules apply, or might apply, to various participants.  State unfair business practice statutes, as well as proposed compensation disclosure statutes, should be studied and intelligently applied to structured settlements.  So should the American Bar Association's Model Rules of Professional Conduct.  Matt  Garretson and Frank Johns, among other attorneys, have written and spoken thoughtfully about the impact of the Model Rules on personal injury settlement planning.   

Congratulations to NSSTA for an outstanding 2005 Annual Meeting.  Good luck in addressing the most important industry issues.

NSSTA 2005 Annual Meeting 1

Patrick Hindert, the author of this article, is an associate member of NSSTA and attended the NSSTA 2005 Annual Meeting.   The author does not represent NSSTA or speak on behalf of NSSTA.  The views, opinions and recommendations expressed below and in this weblog are the author's own.

The National Structured Settlement Trade Association (NSSTA) held its 2005 Annual Meeting April 17 to 20 in Palm Springs, CA. The NSSTA Annual Meeting featured a business meeting, committee meetings, an educational program, and social events.

Highlights of the NSSTA meeting included:

• NSSTA policy statements communicated by Mal Deener, NSSTA’s immediate past president;

• NSSTA priorities and organizational changes announced by Jeff Bowers, NSSTA’s president elect; and

• Educational presentations including analyses of proposed federal medical malpractice and asbestos legislation.

NSSTA policy, as communicated to NSSTA members in Palm Springs by immediate past president Mal Deener, is generally to support the status quo for structured settlement. 

• NSSTA opposes any change that would impact the current status of industry balance between plaintiff and defendants.

• NSSTA will respond to and oppose any attacks to the current structured settlement system.

• NSSTA is committed to one settlement product, the single premium annuity funded with an IRC Section 130 assignment.

The types of potential changes NSSTA opposes, or can be expected to oppose, include:

• Single claimant 468B funds;

• Consumer-oriented legislative proposals such as California Senate Bill 410;

• Expansion of factoring to workers compensation cases;

• Claimant control of structured settlement decisions;
  

• Changes to structured settlement business standards and practices some of which are now being challenged in lawsuits such as Macomber v. Travelers.
• Full compensation disclosure.

NSSTA continues to support amendments to state UCC Article 9 legislation that prohibit or limit the assignability of structured settlement payments.

Jeff Bowers, NSSTA’s new president, announced new NSSTA priorities, directors and committees. Under Bower’s leadership, NSSTA plans to establish closer communication with disabled Americans including the American Disability Association. NSSTA also wants to achieve greater industry cooperation on issues such as attorney fees, factoring, and tort reform. To help accomplish these objectives, NSSTA elected three new directors: Henry Strong, John Roeser, and Gary Burke.  Bowers announced the following new NSSTA committees:

• Long Range Planning;
• Government Benefits;
• Asbestos (upgraded from a NSSTA task force); and
• Broker Relations.

In the author's opinion, NSSTA's new leaders should address these issues:

• Is factoring good or bad for structured settlements?

• Who should control structured settlement decisions?

• Should structured settlement compensation be fully disclosed?

• What roles do structured settlements play in personal injury settlement planning?

• What types of structured settlement business practices violate state unfair business practice statutes?
• How does the structured settlement industry transition to the Internet?

NSSTA's educational program addressed many industry topics including: tax developments; the mediation process; life expectancy; medical malpractice and asbestos legislation; NAIC disclosure requirements; life company/broker relationships; ethical issues; technology developments; and Medicare set asides.  Ron Heagy was an inspirational and entertaining speaker.

Several speakers, including NSSTA lobbyist Eric Vaughn, discussed proposed federal medical malpractice and asbestos legislation that could potentially and substantially expand the United States structured settlement market beyond its current $6 billion of annual annuity premium.

For medical malpractice, potential federal reforms would:

• Incorporate IRC Section 130;

• Allow either plaintiff or defendant to mandate periodic payment judgments;

• Reference the Uniform Periodic Payment of Judgments Act as an advisory resource for judges; and

• Preempt state laws.

Although the NSSTA medical malpractice presentations were valuable, they did not address two important issues:

• How will the timing and amount of periodic payments be determined; and
• Who will control the funding decisions?

The current legislative proposal for asbestos being considered by the Senate Judiciary Committee would create a trust fund of $140 billion for an estimated 400,000 to 600,000 claimants.  The asbestos provisions in Ohio’s recent tort reform represent a model for this bill. NSSTA’s analysis and presentation were informative and reasonably comprehensive.  NSSTA, however, did not address the impact of Medicare (set aside arrangements) and Medicaid (special needs trusts) on asbestos claim settlements.

NSSTA’s members include: product providers (primarily annuity issuers), producers (salespersons), purchasers (liability insurers) and associates (attorneys and consultants). NSSTA’s membership does not include any structured settlement factoring companies or structured settlement recipients. Few, if any, plaintiff attorneys, disability attorneys or life care planners are members of NSSTA. Membership costs are posted on NSSTA’s website. 

For additional information about NSSTA, see the NSSTA website and this earlier report: NSSTA 2005 Regional Meeting.

For additional information about structured settlements, see New Basics for Structured Settlements, S2KM's website, wikipedia, and "Structured Settlements and Periodic Payment Judgments" as well as other entries on this weblog.

New Basics for Structured Settlements

Structured Settlements - Stage 3

During the past 30 years, structured settlements have evolved through three stages in the United States.  The important transition dates are 1982 and 2001.  The following five slides provide a general framework for understanding structured settlements in 2005.  Slides and diagrams created by Keith Burtoft, Markers and Mice, for S2KM Limited.

Click on the slide for a larger image.

   

Note:  For an expanded definition of structured settlement, see wikipedia.