Beyond Structured Settlements

Unauthorized Practice of Law - 1

Mark Wahlstrom has written a blog post titled "Structured settlement brokers drafting settlement documents. Are you guys nuts?" that highlights an important and controversial industry issue.

Mark's question: does a routine structured settlement business practice (life insurance agents drafting personal injury settlement documents) represent the unauthorized practice of law?

Mark, a life insurance agent and structured settlement commentator, answers yes: 

• Current structured settlement business practices promote the unauthorized practice of law including non-lawyers drafting structured settlement legal documents. 

• Some structured settlement intermediaries (aka "brokers" or "agents") regularly provide such legal services without appropriate licenses or qualifications for:
  • Plaintiff attorneys;
  • Liability insurers;
  • Defense attorneys.

Mark's blog post:

• Describes how some liability insurer claim managers pressure structured settlement brokers to provide unauthorized legal services;
• Does not address this corollary question: do these same structured settlement legal practices also represent malpractice by plaintiff and defense attorneys?

For additional information about structured settlements and the unauthorized practice of law, see:

• Related S2KM blog posts:
  • NSSTA - NSSTA's 2007 Fall Meeting featured an educational program for NSSTA members about structured settlement documentation (subtitled: "an analysis of the legal and practical issues and problems") without any discussion concerning the unauthorized practice of law by life insurance agents and their employees.
  • AAJ - This author believes the American Association for Justice (plaintiff attorneys) has been negligent for not providing its members with updated education about:
    • Structured settlement laws and legal issues;
    • Related professional responsibilities and potential liabilities.
• ASNP - This author also believes structured settlement recipients will benefit if and when special needs attorneys expand their professional knowledge to address structured settlement legal issues including the proper drafting of personal injury settlement documents.
• Related S2KM wikis:
  • Structured Settlement Law - part of S2KM's coverage of the Academy of Special Needs Planners (ASNP) 2007 Annual Meeting;
  • Structured Settlement Resources - part of S2KM's 2007 presentation to the National Association of Settlement Purchasers (NASP).
• Related hardcopy resources - "Structured Settlements and Periodic Payment Judgments" including separate chapters for plaintiff and defense attorneys as well as updated information about structured settlements and:
  • The secondary annuity market - including IRC section 5891 and the state structured settlement protection statutes;
  • Government benefits and structured settlements - including the Medicare Secondary Payor statute; special needs trusts; and the Deficit Reduction Act of 2005.
• John Darer's defense and explanation of traditional structured settlement business practices related to the unauthorized practice of law titled: "Nuts, Protein, Cholesterol, Fiber and your Settlement Documents." 

Postscript - October 30, 2007

This post was originally published Sunday evening October 28, 2007.  Additional edits were added Monday morning October 29, 2007. The original post appeared unedited for approximately eight hours Sunday night. S2KM's edits included changing S2KM’s interpretation of John Darer’s October 27, 2007 blog post titled “Nuts..Protein, Cholesterol, Fiber and Your Settlement Documents”.  S2KM’s original post characterized John’s post as promoting and condoning current structured settlement business practices.   S2KM’s edited post (above) substitutes the words “defense and explanation”.  Both the original and final versions include links to John Darer’s blog post and recommend that readers of S2KM's blog review Mark Wahlstrom's original post as well as John Darer's post.  

NASP 2007 Annual Meeting - 3

This blog post concludes S2KM's coverage of the NASP 2007 Annual Meeting held October 18-19 at the Grand Hyatt in Washington, D.C. and highlights selected comments from the NASP panel discussion about the Structured Settlement Market addressing:

• Structured settlement brand;
• Settlement transfer market;
• Factoring discount rates.

S2KM has added a summary of selected panel comments about the structured settlement market to the nasp wiki.

For prior S2KM coverage of NASP's 2007 Annual Meeting, see NASP-1 and NASP-2.

NASP 2007 Annual Meeting - 2

This blog post continues S2KM's reporting about NASP's 2007 Annual Meeting.  For earlier S2KM reporting: see NASP 2007 Annual Meeting - 1.

S2KM continues to update and improve the nasp wiki where S2KM is capturing key components of a conversation about "The Structured Settlement Market" initiated October 19, 2007 at the Grand Hyatt Hotel in Washington, D.C.

Recent additions to the nasp wiki include summary outlines for these NASP educational presentations:

• Stephen R. Harris - topic: "Transfer Issues";
• Patrick J. Hindert - topic: "The Primary Market".

NASP 2007 Annual Meeting - 1

The National Association of Settlement Purchasers (NASP) hosted its 2007 Annual Meeting October 18-19 at the Grand Hyatt in Washington, D.C.   This author was privileged to participate. 

S2KM's reporting about NASP's 2007 Annual Meeting begins with this blog post and this wiki which summarizes NASP's 2007 Educational Program -  a learning conversation about "The Structured Settlement Market". 

For prior S2KM commentary about NASP, see this S2KM blog post.

NSSTA 2007 Fall Meeting

Faced with increasing industry challenges, including how to expand the structured settlement market, the National Structured Settlement Trade Association (NSSTA) hosted its 2007 Fall Regional Meeting October 10-12 at the Saddlebrook Resort outside Tampa, Florida. Among the highlights:

• NSSTA President Henry Strong:
  • Introduced Smith Bucklin , NSSTA's new association management company.
  • Identified management priorities for NSSTA and Smith Bucklin including:
    • Expand the structured settlement market;
    • Recapture the structured settlement brand;
    • Improve NSSTA's Internet technology competences;
    • Increase NSSTA's financial strength and accountability;
  • Summarized NSSTA's preliminary response to potential shortfalls in investment assets at Executive Life of New York (ELNY).
• Andy Imparato, President and CEO of the American Association of People with Disabilities (AAPD):
  • 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.
• Government Benefits Committee - Doug Brand, John McCulloch and Eric Vaughn reported on various legislative and regulatory developments related to structured settlements:
  • HR 2549 ("Medicare Secondary Payer and Workers Compensation Settlement Agreement Act") - HR 2549 would impact Medicare set-aside arrangements (MSA). NSSTA's priorities include:
    • Consistent standards;
    • Improved CMS response time for approvals; and
    • Creating an MSA appeal process.
  • Social Security Administration (SSA) POMS - NSSTA has established dialogue with the SSA related to anticipated POMS for structured settlement annuities and special needs trusts (SNT);
  • Deficit Reduction Act of 2005 (DRA) - NSSTA leaders are beginning to recognize the importance and challenge of:
    • Tracking state DRA-related legislation, regulations and case law that determine whether and when structured settlements annuities qualify (or disqualify) persons for Medicaid long term care;
    • Educating state Medicaid agencies and case workers about structured settlement annuities in the context of the DRA, SNTs and the secondary annuity markets.
    • Formulating a strategy to facilitate the consistent integration of structured settlement annuities with Medicaid on a national basis.
• NSSTA Lobbyist Eric Vaughn
  • Vaughn summarized two additional federal legislative initiatives NSSTA is tracking:
    • A new (second) 9/11 Victims Compensation Fund under consideration for Ground Zero first responders and construction workers;
    • HR 2370, a bill to create income tax free Disabled American Financial Security Accounts.
  • Vaughn reiterated NSSTA's lobbying strategy to:
    • Represent all structured settlement viewpoints and interests;
    • Expand, as well as defend, favorable structured settlement legislation.
• Expanded Use of Structured Settlements - several additional presentations at the NSSTA meeting focused on expanding the structured settlement market:
  • Marketing Structured Settlements - Dan Durbin and Peter Arnold of NSSTA's Marketing Committee introduced an "Army of One" public relations and communication program to assist individual NSSTA members expand their business using Internet tools.
  • Standards of Professional Conduct
    • Consultant Lynn Courier:
      • Introduced the first draft of proposed "Standards of Professional Conduct" developed by the Broker Relations Initiative (BRI) for structured settlement consultants;
      • Conducted a collaboration exercise among attendees to sollicit written comments and recommendations.
    • S2KM suggestions:
      
      • Preamble
        • Structured settlements and government benefits - The idea that structured settlements resolve personal injury claims "without reliance on government benefits" represents inaccurate and wishful thinking. Instead, optimum solutions for personal injury claims should cost-effectively integrate structured settlements with government benefits.
        • Required knowledge - Required knowledge for all structured settlement professionals should include continuing education about:
          • The personal injury settlement planning process (and participants) in addition to the personal injury claim process;
          • Integration of structured settlements with government benefits;
          • Federal and state-specific factoring laws.
      • Representation
        • The current draft highlights the importance of "all parties" (as clients) receiving structured settlement advice without sufficient attention for protecting personal injury victims (as claimants, customers, consumers, investors, recipients, and potential assignors.
        • Examples of protecting structured settlement recipients:
          • Transparency of the structured settlement transaction;
          • Full disclosure to, and informed consent by, structured settlement recipients of all related structured settlement (and settlement planning) compensation arrangements.
          • Full disclosure to structured settlement recipients of all laws impacting structured settlement payment rights including IRC section 5891 and state structured settlement protection statutes.
      • Other Professional Associations - If they have not done so already, BRI organizers should compare the current draft of their proposed Standards of Professional Conduct with related standards from other associations:
        • Society of Settlement Planners (SSP) Code of Ethics (currently in draft format);
        • National Academy of Elder Law Attorneys (NAELA) Aspirational Standards;
        • American Bar Association (ABA) Model Rules for Professional Conduct; and
        • Certified Financial Planner (CFP) Standards of Professional Conduct.
  • Professionalism - NSSTA's Fall meeting featured two presentations about "professionalism" in addition to Standards of Professional Conduct.
    • Leading with Professionalism - featuring Bo Short, author of The Foundation of Leadership; and
    • Hallmarks of a Structured Settlement Professional - with NSSTA members Will Shapiro, Randy Simard, Alice Frisbee and Mike Kelly.
  • Legal Presentations - NSSTA's 2006 Marketing Study emphasized the importance of attorneys for expanding the structured settlement market. NSSTA featured three additional presentations by lawyers at its Fall Meeting.
    • Web Brennan with NSSTA member Randy Gassman - Brennan is President of the Florida Trial Lawyers Association.  He and Gassman spoke about structured settlement planners.
  • Bradley Frigon - Frigon, a Director of NAELA, is a nationally-recognized expert in the rapidly developing field of special needs planning. Frigon provided a SNT Case Law Update.
  • Michael Miller with NSSTA member Toni Warbington - Miller is co-chairperson of NSSTA's Legal Committee. He and Warbington spoke about some of the legal and practical issues with structured settlement closing documentation. In addition, Miller provided a tax update.

Congratulations to NSSTA for an exceptional Fall 2007 Fall Meeting.  NSSTA's 2008 Winter Meeting will be held January 16-18 at the Barton Creek Resort and Spa in Austin, Texas.

Additional resources about NSSTA and structured settlements:

• Wikipedia definitions
  • Structured settlement
  • Structured settlement factoring transaction
  • Special needs trust
    
• Selected S2KM blog posts
  • NSSTA
    • NSSTA 2007 Winter Meeting - includes an earlier summaries of NSSTA's 2006 Marketing Study and the BRI.
    • NSSTA Bylaw Amendments
    • NSSTA 2006 Annual Meeting - includes questions NSSTA brokers should ask themselves about factoring.
  • Expanding the structured settlement market
    
    • Overview of the Structured Settlement Market
    • Structured Settlement Public Policy - Joseph Dehner podcast interview
    • The Future of Structured Settlements
    • Settlement Planner Definition
    • Robert Wood podcast interviews
      
      • Structured Attorney Fees
      • Single Claimant 468B Funds
    • Government benefits
      • Structured Settlements and Government Benefits
      • NAELA Annuity Policy White Paper
      • Special Needs Trusts
      • Deficit Reduction Act
      • Inconvenient Questions - a three part review of Syvius von Saucken's 2007 article about the DRA and structured settlements.
  • Settlement transfers
    • Structured settlement transfers - good or bad?
    • How the Primary Market Views Factoring
    • Self-funded Settlement Transfers - with questions for consultants and planners.
    • Review of Robert Wood's article "Factor v. Commute"
    • New Pennsylvania Rule 229.2
• Structured Settlement Concept Maps - in collaboration with Dr. Barbara Bowen.