NSSTA's 2006 Annual Meeting

Congratulations to the National Structured Settlement Trade Association (NSSTA) which celebrated the beginning of its third decade May 7-11, 2006 with an historic annual meeting in Puerto Rico. For the first time in its history, NSSTA gathered outside the continental United States. The meeting featured NSSTA at its best – excellent speakers, important educational topics, and efficient business meetings combined with festive social gatherings of industry leaders at a delightful resort.

NSSTA is a non-profit organization headquartered in Washington, D.C. The membership consists of more than 700 structured settlement professionals including: producers (aka brokers); product providers (annuities and trusts); defense purchasers (liability insurers and self-insureds); and associates including attorneys who specialize in structured settlement-related issues.

Summary of NSSTA's business meeting

Officers and Directors - NSSTA members elected J.P. Steele to succeed Jeff Bowers as NSSTA President as well as three new Directors: Chris Diamantis, Paul Hoffman and Andy McLean. The NSSTA Board named Henry Strong as President-elect. Other NSSTA Directors include: Robert Blattenburg, Doug Brand, Gary Burke, John Roeser, and John McCulloch.  Jerry Austry, Robert Boyd and Mal Deener retired from NSSTA’s Board of Directors.

Bylaw Amendments - NSSTA members adopted three Bylaw amendments:

• New Mission Statement - a revised Mission Statement as Article I, Section 3 of NSSTA's Bylaws: "The primary mission of the Association shall be to promote the establishment and preservation of structured settlements in order to provide long-term financial security to personal injury claimants and their families through periodic payment of compensation.  The Association also shall promote utilization of periodic payment arrangements generally as a tool for resolving claims.  The Association shall carry out its mission through public advocacy, legislative action and educational programs."
• Membership Qualifications - revised Membership Qualifications as Article II, Section 1 of NSSTA's Bylaws to read: "Membership in the Association shall be available (subject to further provisions of these Bylaws) to any business organization or individual that (a) is engaged in activities that advance the Association's mission, as set forth in Article I, Section 3; and (b) is not engaged, directly or through any related party, in other activities that are incompatible with such mission."
• Application for Membership; Confirmation of Continuing Eligibility - revised Article II, Section 3 of NSSTA's Bylaws to read: "All applicants for membership must complete, sign and submit to the Association's principal office the application form provided by the Association.  At the Association's request, which may not be made more often than annually, any member of the Association shall provide written confirmation, in a form provided by the Association, of such member's continuing eligibility under the Association's membership qualifications, as set forth in Article II, Section 1."

Broker Relationship Initiative - NSSTA reported on the progress of its “Broker Relationship Initiative” formed in 2005. According to NSSTA’s leadership, the stated purposes of this initiative are:

• “to determine how we can strengthen the future of structured settlements for the benefit of all concerned”; and
  

• “to identify and, where we can appropriately, discuss and address key issues of concern to the structured settlement industry.”

At this year’s meeting, NSSTA re-stated its commitment “to fund the expense of engaging an outside professional to support this process in an independent manner” and introduced Lynn Courier, a specialist in conflict resolution, to lead the process. NSSTA’s leadership stressed that this initiative is formed directly by the broker community rather than by NSSTA or its staff. Courier’s introductory workshop in Puerto Rico was one of the highlights of the NSSTA meeting.

Speakers and Topics

All of the NSSTA presenters, members and guests, were outstanding. U.S. Representative Charles Rangel (D-NY) was the featured guest speaker. Currently the ranking Democratic member of the House Ways and Means Committee, Congressman Rangel spoke about his experiences in the 1965
Selma-to-Montgomery Civil Rights March as well as the current priorities in the United States for improved social services, including social security, health and education.

Special Committee Reports - Two NSSTA Committees, Legal and Government Benefits, presented educational reports. Historically known as “The Tax Posse”, this year’s NSSTA legal reporters included Mark Alpert, Jeff Lawrence and Andy McLean. Larry Cohen, a host on Ringler Radio, was the moderator. Although newly named “The Legal Group”, the topics covered in Puerto Rico continued to focus primarily on tax issues. As a separate presentation, NSSTA featured one of its newest committees, Government Benefits. Two guest experts, Jay Sangerman and Patricia Sitchler, provided updates on federal and state Medicaid developments favorably impacting the use of structured settlement annuities to fund special needs trusts. NSSTA committee members Tom Murray and John McCulloch outlined NSSTA’s strategy for addressing the increasing importance of the relationship between governmental benefits and structured settlements amid changing legal rules.

Aging Population - Two presentations addressed the impact of the aging population on structured settlements – one, from a legal perspective, by Michael Miller, and the other, from a financial perspective, by David Cover.   

Ethics - Three expert ethicists, John Freeman, Dr. Judith McKay and Ed Conlon, made separate ethics presentations about litigation, mediation and negotiation respectively.

Sales Training - NSSTA’s recent educational programs have featured increasingly valuable and practical presentations about selling structured settlements. In Puerto Rico, NSSTA devoted four presentations to sales. Attorney Tom Woodrow provided a detailed look, from the defense attorney perspective, of how structured settlements helped Bridgestone Firestone, Inc. evaluate and settle a series of cases relating to tire failures. Jeff Bowers moderated a panel discussion about “The Future of Structured Settlements” featuring Richard Lewis, Rick Woolams and Eric Smith. Henry Strong joined Tim Morbach and Chris Diamantis in discussing “Services Your Client Needs”. Kyle Hording and David Bracket repeated of a popular NSSTA sales primer titled “Lies, Damned Lies and Statistics”.

Personal Observations

Technology – Although NSSTA did not provide any technology training at this meeting, NSSTA continues to support Internet technologies. Ringler Radio and the Legal Talk Network recorded video podcast interviews with speakers and NSSTA representatives at the meeting site for upcoming Internet broadcasts. NSSTA’s Broker Relationship Initiative is utilizing SurveyMonkey to survey the structured settlement broker community about the direction of the initiative. NSSTA has recently upgraded its website. StructureOnline, a leading industry software provider, regularly exhibits at NSSTA meetings.

Internet 2.0 – As part of its support for technology, NSSTA needs a new Internet strategy. The Internet has moved beyond emails and websites to include weblogs, podcasts, wikis, VOIP and other social network technologies.

• How and when will NSSTA transition to these new technologies?

• What additional educational programs will NSSTA offer members who want to learn how to use these new Internet tools?

• What impact are these technologies already having on structured settlements and settlement planning?

• How can NSSTA implement Internet 2.0 technologies to improve its own educational conferences and business operations?

“Services Your Client Needs” – This topic merits additional analysis and educational presentations. NSSTA should consider organizing follow-up presentations to expand upon the issues identified by Henry Strong, Tim Morbach and Chris Diamantis. In addition to recognizing that different clients require different services, the education should include alternative products. For example, the 2006 ATLA Winter Meeting featured a cross-fire type comparison of structured settlement annuities and managed funds. Managed funds, including settlement trusts, and custodial accounts, represent important settlement planning products. As Dick Lewis pointed out in discussing “The Future of Structured Settlements”, structured settlement annuities are increasingly being “blended” with settlement trusts, in part to satisfy Medicare and Medicaid requirements.  For additional information, see S2KM's weblog post titled "The Future of Structured Settlements".

Elephants and Sacred Cows – Lynn Courier’s initial workshop for the Broker Relationship Initiative was one of the most important and promising programs in recent NSSTA history. Working in small groups, the attendees quickly identified many of the critical issues in the structured settlement industry – the “untouchables” and “unchangables”.  This initial exercise represented a positive step. It appeared to energize and unify the participants.  All members of the structured settlement broker community should participate and support this initiative.

Ethics – During its educational program, NSSTA devoted three separate one hour presentations to ethics. Although each was informative, none directly addressed structured settlements issues. This omission is especially glaring in light of the recent opinion letters about structured settlement compensation disclosure written by law professors Stephen Saltzburg and Erwin Chemerinsky which have received widespread distribution and discussion since they were first released at the 2006 ATLA Winter meeting.  For additional information, see S2KM's earlier weblog post titled "Jack Meligan Interview".

More Ethics – It would have been helpful and valuable to review NSSTA's Code of Ethics as part of NSSTA's educational program.  One result of the Broker Relationship Initiative should be a re-consideration of industry ethics.  One important and immediate ethical issue confronting the structured settlement industry is compensation disclosure including informed consent by the claimant. As the Saltzburg and Chemerinsky opinion letters point out, the plaintiff attorney has the primary duty and responsibility for ensuring structured settlement compensation disclosure and for obtaining informed consent by his/her client. Macomber v. Travelers and Spencer v.Hartford further highlight the importance of compensation disclosure. In re-considering industry ethics, NSSTA’s Broker Relationship Initiative should recognize the relevance and importance of Codes of Ethics developed by related professional organizations – specifically: the American Bar Association (ABA), The National Academy of Elder Law Attorneys (NAELA), and the Society of Financial Service Professionals (FSP). The Society of Settlement Planners (SSP) is currently developing its own Code of Professional Ethics.

Settlement Transfers – Questions for NSSTA members:

• Are settlement transfers (aka factoring) good or bad for structured settlements? 

• How do the not-so-new federal and state laws impact settlement planning? 

• What options exist for addressing settlement transfer issues as part of the original settlement negotiation and documentation? 

• Are commutations subject to settlement transfer rules? 

• What types of claimants represent appropriate candidates for settlement transfers? 

• What is the process for completing a settlement transfer? 

• Which annuity providers offer the best commutation and settlement transfer products? 

• How can the structured settlement industry improve settlement transfers?
• Under the new NSSTA Bylaw amendments (see above), should settlement transfer companies be barred from NSSTA membership?  What about:
  
  • Annuity companies who:
    • Own settlement transfer companies? or
      
  • Offer commutations? or
  • Along with liability insurers, purchase structured settlement payment rights as repackaged investment securities?
  •  Structured settlement producers (brokers) who:
    • Participate in, and receive compensation for, settlement transfers? or
    • Attempt to address annuity liquidity issues in the context of settlement planning?
  • Attorneys who represent transfer companies in specific transfer applications? 
  • Judges who approve settlement transfers?
  • Legislators who enact settlement transfer statutes?

Recognition – NSSTA did a great job of honoring and acknowledging members who made special contributions during the past year - in addition to those members who received NSSTA’s Certified Structured Settlement Professional (CSSC) award.