In addition to its other accomplishments (most notably publication of "Standards of Professional Conduct for Settlement Planners"), the Society of Settlement Planners (SSP) has distinguished itself by sponsoring educational programs addressing issues, featuring speakers and permitting perspectives the more defense-oriented National Structured Settlement Trade Association (NSSTA) traditionally has been reluctant or unwilling to offer.
SSP's 2014 Annual Conference, to be held April 27-29 in New Orleans, promises to continue this more open-minded educational tradition.
As one example, SSP's Secondary Market Panel discussion will feature two leading structured settlement transfer legal experts whose clients typically oppose each other in significant secondary market cases:
- Stephen R. Harris - among other roles and accomplishments, Stephen (a partner at Drinker Biddle whose clients include annuity providers) recently served as co-Chairman of NSSTA's Legal Committee.
- Earl S. Nesbitt - in addition to representing factoring companies, Earl (a founding partner of Nesbitt, Vasser & McCown) serves as Legal Counsel and Executive Director for the National Association of Settlement Purchasers (NASP).
SSP's Secondary Market Panel, which will be moderated by Patrick Hindert (S2KM's Managing Director and blog author), should be educational and entertaining - and hopefully somewhat controversial. Here are some of the questions the featured panelists will address.
Overview
- Is the secondary market good or bad for the primary structured settlement market?
- Among other objectives, IRC 5891 and the Model State Structured Settlement Protection Act (Model Act) were enacted to protect claimants from predatory secondary market business practices. Both NSSTA and NASP supported these statutes. How successfully have these statutes accomplished their objective to protect structured settlement recipients?
- Based upon your experience, what changes or amendments, if any, would improve the Model Act?
- Would adding a multiple bid requirement as part of the "best interest" test improve the secondary market?
Troubling Developments
- During NASP's 2013 annual conference, former NASP President Robin Shapiro expressed personal outrage about "troubling reports concerning the structured settlement factoring business" including:
- Falsified transfer orders.
- Inter-state forum shopping.
- Short-cutting waiting periods and disclosure requirements.
- Expediting hearing dates before preferred judges.
- "Competing bids" from the same company.
- How prevalent are these business practices?
- What have NASP, NSSTA and/or other primary market participants done to address these issues? What should they do?
Falsified Orders
- Reports indicate a former paralegal at the New York law firm Paris & Chaikin falsified as many as 100 transfer orders?
- What happened? What is the status?
- How will these events impact the secondary market and its various participants including: the law firm, its secondary market clients, the annuity providers and the structured settlement recipient/transferors?
Anti-Assignment Restrictions
- Recent (Brenston) and current class action (Sanders) cases in Illinois address the impact of "anti-assignment" restrictions on transfers of structured settlement payment rights.
- What is the status of these cases and related litigation? What are the issues?
- Does the recommended assignment language in NSSTA's Model Qualified Assignment and Release Agreement solve this problem - or is some other solution necessary?
- What case-specific responsibilities do structured settlement brokers, settlement planners and other plaintiff advisers have related to anti-assignment restrictions?
Primary Market Responses
- MetLife recently adopted controversial new business practices whereby it opposes transfers that involve split payments as well as court-approved servicing arrangements.
- What is MetLife's rationale and objective?
- How are these business practices impacting the secondary market?
- The Florida state legislature is considering a bill that would add a maximum discount rate (similar to North Carolina) to its existing protection act..
- Is this a good idea?
- How has the North Carolina provision impacted the secondary market in that state?
- Why haven't more annuity providers offered commutation-like alternatives to third party factoring transactions? What impact would such alternatives have on the existing primary and secondary markets?
RLS Arbitrations
- RLS (formerly Rapid Settlements) has attempted to use the Federal Arbitration Act to side step state structured settlement protection statute requirements.
- What is the status of the related RLS litigation?
Conclusion
- What other secondary market issues do you see as important for the future of structured settlements?
- What opportunities exist for primary and secondary structured settlement market cooperation? What is preventing this cooperation?
For background about these secondary market issues, see the structured settlement wiki and more specifically these prior S2KM blog posts:
- Structured Settlements 2013 - Secondary Market
- Secondary Market Update - February 3, 2014
- Sanders v. JGWPT Holdings
For more detailed analysis of secondary market issues, see Chapter 16 of "Structured Settlements and Periodic Payment Judgments" (S2P2J).
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