Beyond Structured Settlements

Past Reporting - SSP

Historical S2KM Reporting about Society of Settlement Planner (SSP) Conferences which previously appeared on the structured settlement wiki.

SSP

• 2005 SSP Annual Meeting
• 2006 SSP Annual Meeting
• 2007 SSP Annual Meeting
• 2007 SSP Fall Meeting
• 2008 SSP Annual Meeting - 2 posts
• 2009 SSP Annual Meeting
• 2010 SSP Annual Meeting
• Part 1 - topics and speakers.
• Part 2 - S2KM pre-meeting strategic perspective.
• Part 3 - leadership changes.
• Part 4 - awards and recognition.
• Part 5 - NSSTA's lobbying strategy.
• Part 6 - tax panels part 1 - introducing the participants.
• Part 7 - tax panels part 2 - discussing the issues.
• Part 8 - Dan Clark and NSSTA ethics.
• Part 9 - industry leadership and issues.
• 2011 SSP Annual Meeting
• Part 1 - speakers and topics
• Part 2 - strategic perspective
• Part 3 - tax issues
• Part 4 - transition to settlement planning
• Part 5 - transition to multiple, more flexible products
• Part 6 - transition to the internet
• Part 7 - insurer insolvencies and guaranty associations
• 2012 SSP Annual Meeting
• Part 1
• Part 2
• 2013 SSP Annual Meeting
• 2014 SSP Annual Conference
• Part 1
• Part 2
• 2015 SSP Annual Conference
• Part 1
• Part 2
• 2016 SSP Annual Conference
• SSP 2017 Annual Conference

S2P2J Release 63

The United States structured settlement market has been in existence for approximately 40 years and continues to expand its scope, complexity and importance within the context of personal injury settlement planning. When structured settlements were first introduced in the United States in the late 1970s, they were viewed primarily as a defense claim management concept which was binary in nature. A settlement was either “cash” or “structure”. A “failed” structured settlement was a “cash out”. Defense brokers sold a single product – a structured settlement annuity which could be, and almost always was, combined with up front cash. Rarely, however, from a defense perspective, was a structured settlement annuity integrated with other financial products or government benefits. In fact, a fundamental public policy justification for structured settlements claimed that “structured settlements enable injury victims to live free of reliance on government assistance.”
As the U.S. structured settlement market evolved, however, a shift in control has occurred as plaintiffs and their attorneys now retain their own structured settlement advisors. From the plaintiff perspective, a structured settlement annuity looks less like an all or nothing settlement proposition and more like a strategic product that can be combined with other financial products, government benefits and trusts into comprehensive settlement plans. National associations of plaintiff structured settlement brokers (SSP), special needs attorneys (SN Alliance and ASNP), and other professionals, as well as traditional structured settlement participants (NSSTA) increasingly recognize a much larger and more complex market (personal injury settlement planning) within which structured settlement annuities represent a core strategic product.
Since it was first published in 1986, "Structured Settlements and Periodic Payment Judgments" (S2P2J), has provided structured settlement stakeholders and settlement planning professionals with an authoritative reference guide, consisting of 16 chapters with extensive footnotes and Appendix documents, to help them understand issues and fashion settlements and judgments utilizing periodic payments. Both the National Structured Settlement Trade Association (NSSTA) and the Society of Settlement Planners (SSP) have utilized S2P2J as an educational resource for their certification programs.

Co-authored and updated semi-annually by Daniel W. Hindert, Joseph J. Dehner and Patrick J. Hindert, S2P2J now features an online version as well as the traditional hardcopy. Online S2P2J includes a search feature and download capability as well as link features to access individual book sections, appendices, footnotes, cases and statutes. In addition to contributing authors recognized below, the book authors acknowledge and thank the NSSTA and SSP Legal Committees for sharing case and industry updates.

Publisher Law Journal Press anticipates a March 2018 distribution date for hardcopy supplements for S2P2J Release 63 with online S2P2J subscribers receiving their update simultaneously with no additional subscription charge. Competent professionals confronted by structured settlement issues should have access to an up-to-date copy (or the online version) of this indispensable source book.

Release 63 Highlights - Release 63 will feature new, updated and/or expanded sections addressing the following structured settlement topics:

• Historical Analysis - To help structured settlement stakeholders analyze the comprehensive changes impacting their industry, Release 63 adds three new subsections to Chapter 1 expanding its historical analysis of the U.S. structured settlement market including: "Historical Trends and Transitions"; "Legislative History"; and "Significant Historical Developments."
• ABLE Accounts - The "Achieving a Better Life Experience Act of 2014" (ABLE Act) created an important new option (ABLE accounts) for qualifying individuals (disabled prior to age 26) to save and accumulate money while preserving eligibility to receive means-tested government benefits. In the personal-injury context, ABLE accounts cannot be funded directly with a structured settlement, but can be funded indirectly using a special needs trust. Contributing author David Lillesand, a nationally recognized special needs legal expert, highlights Release 63 with a comprehensive introduction to ABLE accounts for structured settlement and settlement planning professionals. Among the topics attorney Lillesand addresses: 1) Federal laws and regulations - including Congressional improvements in 2017; 2) State ABLE programs; 3) ABLE accounts in practice; and 4) a comparison of special needs trusts and ABLE accounts.
• Market-based Programs - One result of settlement planning has been the development of an increasing number of products and financial vehicles directly and indirectly related to structured settlements. Contributing author Serena Fitchard introduces and explains "market-based programs" which provide periodic payments linked to the performance of an underlying investment portfolio. At one time, most industry participants assumed market-based programs did not meet IRC 130's "fixed and determinable" test. In multiple PLRs, however, the IRS has concluded that the variable nature of a payment does not preclude it from being fixed and determinable if the payment obligation is fixed at the time of settlement and the amount can be calculated pursuant to an objective formula.
• Rating Agencies - Contributing author Michael Cohen, former head of A.M. Best's U.S. Life Insurance Industry rating division, provides an extensive update in Release 63 to S2P2J's summary and analysis of financial rating agencies relevant to structured settlements. Mr. Cohen's commentary: 1) introduces new companies that provide ratings for insurers; 2) discusses the quantitative and qualitative factors rating agencies utilize when they apply their rating methodologies; and 3) emphasizes the importance of risk based capital in life insurer evaluations. He further explains why A.M. Best has two rating scales (Financial Strength Rating and Issuer Strength Rating) and how those rating scales interact.
• Non-Qualified Assignments - Release 63 continues to track developments in the non-qualified structured settlement market which features an increasing number of non-traditional product providers as well as funding options where non-U.S. companies serve as obligors. S2P2J's analysis highlights many of tax and non-tax issues that these "off-shore" products raise which structured settlement professionals should evaluate and be able to explain to clients.
• Guaranty Association Model Act - As one result of the ELNY liquidation, the NAIC updated its "Model Life and Health Insurance Association Model Act" in 2017. Release 63 addresses the sections specifically impacting structured settlements including a clarification that Guaranty Association coverage under this newest version of the Model Act does not extend to "persons" who acquire rights to receive structured settlement annuity benefits via factoring transactions or to the "rights" so acquired. Louisiana became the first state to enact the new Model Act provision specifically excluding factored benefits.
• Lanclos v. United States - To its extensive coverage of the ELNY insolvency and liquidation, Release 63 provides a summary of Lanclos v. United States, a case decided by the U.S. Court of Federal Claims in 2017, in which an ELNY shortfall victim successfully argued that the U.S. government should be held liable for the shortfall because it "guaranteed" the structured settlement payments. To support her position, the plaintiff relied on Massie v. United States, where a Federal Circuit Court relied on a plain reading of the contract terms which stated the payments were “guaranteed” and “shall be paid.” Because of this language, the Court in Massie rejected the government’s argument that it had discharged its duty under the settlement agreement by “purchasing an annuity.”
• Privacy Issues - Professional structured structured practitioners must be aware of various federal and state privacy laws that may impact the gathering and/or sharing of medical or other personal information belonging to a claimant during the course of a personal injury settlement negotiation. Release 63 continues S2P2J's coverage of these privacy laws which can include not only HIPAA and the Gramm-Leach-Bliley Act but also state legislation similar to the NAIC's Model Act entitled "Privacy of Consumer Protection and Health Information Regulation" which may apply to all entities licensed by the State Department of Insurance.
• Deferred Attorney Fees - Plaintiff attorneys who wish to defer part or all of their fees in a contingent fee case have multiple product options depending upon whether the underlying case involves non-taxable personal physical injuries. For non-taxable injury cases, most structured settlement annuity providers allow attorney fees to be structured using an IRC 130 qualified assignment even on a "stand alone" basis. Release 63 updates S2P2J's analysis of qualified assignment applications to deferred attorney fees and questions whether the Childs case on its own represents appropriate tax authority.
• Settlement Planning Practice Standards - More recent S2P2J updates have recognized the evolution of personal injury settlement planning and its strategic relationship with structured settlements. Originally composed primarily of plaintiff structured settlement brokers, the Society of Settlement Planners (SSP) has played a leading role in defining this new profession. Release 63 highlights SSP's most recent contribution, their "Settlement Planning Practice Standards," and also includes a copy of these Standards in S2P2J's Appendix.
• CMS WCMSA Reference Guide - Medicare Set-Asides (MSAs) have become an important sub-market for structured settlements. Release 63 summarizes sections applicable to structured settlements within the most recent (2017) update of the CMS Workers Compensation (WC) MSA Reference Guide. Significantly, this newest version of the Reference Guide continues to incorporate the October 15, 2004 CMS Memo that provides structured settlement annuities with an inherent cost advantage compared with lump sums for funding most WCMSAs. Every structured settlement professional should be aware of this cost advantage and be able to explain it to their clients.
• Secondary Market Business Practices - Successful cooperation between NSSTA and the National Association of Settlement Purchasers (NASP) has resulted in greater consumer protections within the Model Act and multiple state structured settlement protection statutes. Unfortunately, the conduct of some secondary market participants continues to result not only in negative national publicity but also government actions against certain factoring companies alleging fraud and other deceptive business practices. Among other additions, Release 63 summarizes two recent criminal cases involving forgeries of protection act transfer orders to S2P2J's already extensive chapter addressing "Transfers of Structured Settlement Payment Rights."

For additional coverage of historical structured settlement issues and developments, see the structured settlement wiki.

ASNP 2017 Annual Conference

For the past 11 years, the Academy of Special Needs Planners (ASNP) annual conferences have consistently improved the educational scope and standards for an expanding professional landscape which, in addition to, and overlapping with, special needs planning, also encompasses personal injury settlement planning, including various types of settlement trusts as well as structured settlements, Medicare set-aside arrangements and life care planning.

ASNP's 2017 Annual Conference, which occurred March 23-25 in New Orleans, maintained its deserved reputation and also highlighted an increasing number of opportunities, issues and challenges for both the traditional structured settlement industry and the "emerging" personal injury settlement planning industry - relatively few of whose combined members have historically attended this, or other, national special needs conferences.

ASNP 2017 TOPICS AND SPEAKERS

PRE-SESSION

• Drafting the World's Best Special Needs Trusts - Kevin Urbatch; Nancy Chudacoff; Ray Falcon; Travis Finchum; Michele Fuller; Robert Mescali
• Online Marketing for Attorneys Intensive Workshop - Conrad Saam

MAIN PROGRAM

• Developments and Updates on Special Needs Topics - Blaine Brockman
• Ethically Representing Persons with Disabilities and their Families - Dr. Roberta Flowers and Sheila Moragas
• To SNT or not SNT: How to Systematically Review a Client's Situation to Provide the Best Advice - Travis Finchum and David Lillesand
• Understanding the Issues that Arise When Persons with Disabilities Interact in Family Law Situations - Emily Kile and Jennifer Kupiszewski
• Taxation Issues that Arise for Persons with Special Needs - Vincent Russo
• SSI Update - David Lillesand
• Ask the Experts Panel - Moderated by Kevin Urbatsch
• The Arc - Robin Shaffert

CONFERENCE HIGHLIGHTS - A STRUCTURED SETTLEMENT / SETTLEMENT PLANNING PERSPECTIVE

Legislative Developments - Multiple legislative developments addressed at the ASNP conference represent expanding business opportunities for structured settlement and settlement planning professionals.

• Affordable Care Act - The political future of the Patient Protection and Affordable Care Act (ACA) and Medicaid remain uncertain. In fact, House Speaker Paul Ryan pulled the Republican ACA replacement bill concurrent with the ASNP conference. At present, however, both the ACA and Medicaid continue to represent critical health care alternatives for disabled individuals as David Lillesand and Travis Finchurm discussed in their presentation "To SNT or not SNT". In discussing these options, Lillesand highlighted the need for a "cost benefit analysis" to determine whether advisors should recommend private health insurance or a special needs trust (SNT). Both d(4)(A) (self-settled) SNTs and ACA premium payments continue to represent excellent funding opportunities for structured settlements as well as important settlement planning considerations.
• Special Needs Trust Fairness Act - Blaine Brockman summarized Section 5007 of the 21st Century Cures Act - a section referred to as the "Special Needs Trust Fairness Act" (SNTFA), which was signed into law by President Obama on December 13, 2016. The SNTFA adds “the individual” to the list of persons/entities who can establish a special needs trust pursuant to 42 U.S.C. 1396p(d)(4)(A) and thereby corrected a long -standing oversight in the OBRA 1993 legislation that created SNTs. Among the anticipated results of the SNTFA: more self-settled special needs trusts with more opportunities for structured settlements.
• The Achieving a Better Life Experience (ABLE) Act - Since the Federal ABLE Act became law in December 2014, 18 states have opened ABLE programs. ABLE Accounts "seemed pretty simple at first", according to Brockman. However, "as programs have developed, accounts have opened, and people with disabilities have begun using ABLE funds," Brockman added "what seemed like simple financial accounts have given way to more nuanced issues about the best use of the ABLE Act." Brockman's presentation addressed many of these ABLE issues and confirmed that, in appropriate cases, ABLE accounts provide a valuable new tool for special needs and personal injury settlement planners. Although Brockman did not specifically address structured settlements, special needs attorney Stephen Dale will be speaking about ABLE Accounts (and presumably structured settlements) later this week at the National Structured Settlement Trade Association (NSSTA) Annual Conference.

Collaboration Opportunities

• Structured settlement annuities represent a strategic product within the larger and more complex personal injury settlement planning (settlement planning) market. From a legal perspective, special needs planning and settlement planning increasingly overlap. Settlement planning is now viewed as a growth opportunity by many special needs and elder law attorneys.
• Although their signature products are special needs trusts (SNTs), special needs attorneys play a variety of settlement planning roles (legal advisor; guardian; conservator; trustee; QSF administrator) and provide a variety of settlement planning products and services. Their expertise encompasses government benefits including: Social Security; Medicare; Medicaid; the ACA; ABLE Act; Veterans benefits; and public housing.
• ASNP's commitment to settlement planning has included a 12-part settlement planning webinar series (including a section on structured settlements) as well as its joint 2016 Annual Conference with the Society of Settlement Planners (SSP)
• Noticeable by their general absence from the ASNP conference, as speakers, attendees, exhibitors and/or sponsors, were members of NSSTA and SSP - which might be explained, in part, by the calendar proximity of their own annual conferences. In S2KM's experience, however, NSSTA and SSP members are also general "no-shows" at other national special needs conferences such as those sponsored by Stetson Law School and the University of Texas.
• By comparison: among the 17 exhibitors at the 2017 ASNP Annual Conference, there were at least: seven settlement trustees, one life care planner, one MSA administrator, and one seller of Medicaid annuities. The Platinum Sponsor of the ASNP Annual Conference was MassMutual, a life insurance company which exited the structured settlement market in 2007. MassMutual now appears to be the leading national special needs life insurance provider - focusing on developmentally disabled individuals and their families rather than personal injury victims. MassMutual acquired Metlife's retail advisory force in 2016 including its special needs division.
• Why should members of NSSTA and SSP attend national special needs conferences? For NSSTA (and its "Growth Initiative") and SSP (and its "Emerging Professionalism"), attendance and participation at national special needs conferences is important, of course, for education and marketing. Beyond those objectives, however, It is also about:
  • Understanding special needs and special needs planning - and how they impact structured settlements and settlement planning;
  • Identifying special needs knowledge leaders and collaboration partners;
  • Establishing (or re-establishing and improving) professional and association identities within the special needs community;
  • Recruiting "next generation" structured settlement and settlement planning professionals;
  • Improving multi-professional work product and building better business models.
  • Becoming part of the local, state and national special needs community - as described during the ASNP conference by Robin Shaffert, Senior Executive Officer of the Arc.

Standards, Practices and Certification - In addition to developments noted above, some progress is being made toward improving professional standards, practices and certification within both the special needs and settlement planning (including structured settlement) markets.

• MassMutual, which sponsors the American College of Financial Services Center for Special Needs , announced during the ASNP conference that the American College now offers a new Chartered Special Needs Consultant (ChSNC™) program. The Mission of the Center is "to elevate the knowledge of financial service professionals in the area of special needs planning." However, its new certification program does not appear to encompass structured settlements or settlement planning.
• In her ASNP discussion titled "Ethically Representing Persons with Disabilities and their Families", Professor Roberta Flowers referenced the proposed and newly revised "Aspirational Standards for Professionalism and Ethical Behavior for Elder and Special Needs Law" published by the National Academy of Elder Law Attorneys (NAELA) which NAELA will introduce to its members later this summer.
• During its 2017 Annual Conference, SSP announced a four-step plan to elevate settlement planning to professional status: 1) re-focusing SSP on professionalism; 2) updating SSP's Standards of Professional Conduct; 3) renewing and upgrading the RSP Designation program; 4) adopting and embracing new proposed SSP Practice Standards.
• NSSTA, as an association, has been slow to embrace "settlement planning" and to investigate "special needs planning." NSSTA, however, has recently formed a "Special Needs Attorney Task Force" and its 2017 Annual Educational Conference will feature an unprecedented (for NSSTA) three special needs attorneys as speakers. NSSTA is a major contributor to the American Association for People with Disabilities (AAPD) for which Eric Vaughn, NSSTA's Executive Director, currently serves as Vice Chairman. Ringler, a founding NSSTA member and historically the largest structured settlement broker, recently re-branded itself as "Objective Settlement Advisors" and now claims to be "the largest settlement planning company in the nation." NSSTA currently is updating its CSSC certification program and is expected to increase emphasis on government benefit issues.
• Important, but often overlooked, in discussions about special needs planning and settlement planning are life care planners. The two most prominent U.S. based life care planning professional associations are the International Association of Life Care Planners (IALCP) and the American Association of Nurse Life Care Planners (AANLCP). Both offer or promote certification programs.

CONCLUSION - For S2KM, the ASNP Conference continues to be a "must attend" annual event providing "top tier" analysis of special needs and settlement planning developments, valuable perspectives on structured settlements plus the opportunity to converse with industry icons and next generation leaders. For S2KM reports on past ASNP conferences, as well as other structured settlement and settlement planning national conferences, see the structured settlement wiki.

SSP 2017 Annual Conference

Although the Society of Settlement Planners (SSP) was founded in 2000, the term "settlement planner" is still viewed by many structured settlement stakeholders as an inflated synonym for "plaintiff broker". Current SSP President Joseph Tombs agrees.

"Until recently," Tombs stated in an S2KM interview, "that view was entirely accurate. A plaintiff broker would simply order new business cards with the new title ('Settlement Planner') proudly displayed. Today, however, that transition creates changes in expectations, applicable standards of care, and required levels of disclosure."

Just as significant, under Tombs' leadership, SSP has made a dramatic policy shift: "to pull back completely from structured settlement politics". Tombs quickly adds, however: "Our refusal to take a position should not be misunderstood to imply anything about our individual members." For example: "[t]he SSP has been a zealous advocate of the single-claimant QSF in the past and I doubt any of our members have changed their opinions on the subject. We are not asking our members to suppress or to modify their own beliefs."

The changes in SSP, as well as the growing maturation of settlement planning, were evident during SSP's recent 2017 Annual Conference which occurred March 1-3 in Las Vegas. Perhaps the most provocative statement of change, at least from a structured settlement perspective, was a panel discussion titled "Comprehensive Settlement Planning in a Post Structure-Centric World" featuring Tombs; Jack Meligan; Charly Schell; and Joseph DiGangi.

Each of these panelists has been a settlement planning leader and proponent for many years. Meligan and Schell are former SSP Presidents. DiGangi is the newly-elected SSP Vice-President. As panelists, each offered settlement planning "tips" including:

• Meligan - Dive into Medicare; study and understand the power of QSFs; expand your vision beyond structured settlement annuities.
• Schell - Prioritize planning over products; pay attention to compliance in the planning process.
• DiGangi - Obtain relevant credentials (RSP; CSSC; MCSSC; CFP; RIA; CFA; CPA; JD); charge fees for your expertise.
• Tombs - structure into trusts; consider equity-indexed annuities; embrace comprehensive services (financial planning; asset management; trust services; legal services; insurance products; lien resolution; MSP compliance; MSA allocations or management; factoring assistance; economic witness).

SSP did not ignore structured settlements during its 2017 Annual Conference. On the contrary,. the conference included a 90 minute panel discussion titled "Structured Settlement Industry Developments" featuring "Structured Settlements and Periodic Payment Judgments" (S2P2J) co-authors Daniel Hindert, Joseph Dehner and Patrick Hindert (S2KM's Managing Director) as panelists. Topics discussed included S2P2J Release 61 highlights; renewed structured settlement sales growth ; the current AIG class action ; and the current ELNY class action . The SSP conference audience included National Structured Settlement Trade Association (NSSTA) Board members, NSSTA brokers and NSSTA annuity provider representatives. Multiple NSSTA members were featured as speakers.

The SSP conference also included an informative panel discussion about the structured settlement secondary market titled "Bad Practices in the Secondary Market" featuring John Darer, Eddie Stone and moderated by Rhonda Bentzen. The presentation provided a detailed, professional critique, with examples, of false advertising by some primary market participants who sell products consisting of "re-cycled" or "derivative" structured settlement payment rights as "annuities" or "structured settlements" as well as the risks and dangers of such products.

Just as SSP as an association is transitioning, the relative role and importance of structured settlements (from SSP's perspective) is also changing - and this poses a challenge for NSSTA and the structured settlement industry generally. For examples:

• Although most of the SSP members who produce structured settlements are also NSSTA members, according to Tombs, he also maintains that most SSP members, sponsors and seminar attendees do not sell structured settlement annuities.
• SSP has developed a new set of "Practice Standards" which it introduced during its 2017 Annual Conference because, according to Tombs, "professionalism requires a set of common standards recognized by those calling themselves settlement planners as well as the consuming public."
• Tombs also announced that a committee of the SSP Board will be "modernizing" SSP's existing "Standards of Professional Conduct" because this current ethical code is "too structured settlement centric".
• Tombs, as well as other SSP members, believes that settlement planning represents a uniquely superior business model compared with traditional structured settlements. Most structured settlement annuity providers, according to Tombs, "[don't] understand the significance of settlement planning - or how it differs and/or relates to structured settlements."
• From a plaintiff or plaintiff attorney perspective, Tombs characterizes settlement planners vs. structured settlement brokers as "unfair competition". "My experience has shown," Tombs states, "that whenever a plaintiff attorney sees and understands the settlement planning model, they will never again be satisfied with a structured settlement broker who only offers one product as a solution for a client's comprehensive needs."

From an historic and strategic perspective, Tombs' message, indeed the message of the SSP 2017 conference more generally, appeared to S2KM to echo and amplify Joseph DiGangi's presentation during the NSSTA 2009 Winter Meeting which DiGangi termed "a wake up call for the [structured settlement] industry". At that time (2009), DiGangi proposed a "consultant" model for NSSTA members, with multiple products and services, as an alternative to the "annuity broker" structured settlement business model.

Characteristics of consulting model DiGangi proposed in 2009, not unlike SSP's current settlement planning model, included: planning orientation; solutions before products; blended products and services; product neutrality; compensation disclosure; professional training and designations; comprehensive skill sets and knowledge base.

Significantly, in 2009, DiGangi characterized structured settlement annuities as the "foundation product" for what DiGangi at that time termed "settlement consulting" - and settlement consulting as the new business model for structured settlement growth. For structured settlement consultants who lack the expertise, licensing or infrastructure to offer comprehensive solutions, DiGangi recommended teaming up with other professionals. DiGangi highlighted several transitional issues: licensing; conflicts of interest; collaboration models; and work process infrastructure.

Although NSSTA has not yet formerly embraced "settlement planning", NSSTA has formed a "Special Needs Attorney Task Force" and its 2017 Annual Educational Conference will feature an unprecedented (for NSSTA) number of special needs attorneys as speakers. Special needs attorneys play an increasingly important number of roles in personal injury settlement planning. Ringler, a founding NSSTA member and historically the largest structured settlement broker, recently re-branded itself as "Objective Settlement Advisors" and now claims to be "the largest settlement planning company in the nation."

Among several other interesting and educational SSP presentations (listed below), the following two related discussions were especially important for the future of SSP and settlement planning - again, from S2KM's perspective:

• "Turning Settlement Planning Into a Profession" - Kent Hansen presenter.
• "Registered Settlement Planner (RSP) Designation Update" - Joseph Tombs presenter.

Hansen's presentation was notable for several reasons. First, he acknowledged that "settlement planning" remains an emerging profession that has not yet achieved professional status. Second, he identified four SSP-related steps to elevate settlement planning to professional status: 1) the current re-focus of SSP; 2) updating SSP's (structured-centric) Standards of Professional Conduct; 3) renewing and upgrading the RSP Designation program; 4) adopting and embracing the proposed SSP Practice Standards.

Hansen also reviewed the proposed new SSP Practice Standards, which address the following issues, and which the SSP Board of Directors' Practice Standards Committee has approved and sent to the SSP membership for their input and consideration before the SSP Board meets to discuss, modify and most likely approve the Practice Standards at its upcoming April meeting :

• Practice Standard #1 - Identifying/acknowledging "client" as individual (potentially) receiving settlement proceeds.
• Practice Standard #2 - Defining the scope of the engagement including making required disclosures of material conflicts of interest and details of the planner's compensation.
• Practice Standard #3 - Defining the client's goals, needs and priorities relevant to scope of engagement.
• Practice Standard #4 - Obtaining information and documents.
• Practice Standard #5 - Analyzing information to match client's goals, needs and priorities with resources.
• Practice Standard #6 - Considering options and developing recommendations.
• Practice Standard #7 - Communicating recommendations to enable client to make informed decisions.
• Practice Standard #8 - Mutually agreeing on implementation responsibilities consistent with scope of assignment.
• Practice Standard #9 - Recommending appropriate products and services.
• Practice Standard #10 - Mutually defining monitoring responsibilities.

Finally, Hansen reviewed the settlement planning process which S2KM summarizes as follows: 1) identify the client; 2) establish the engagement; 3) define goals; 4) gather data; 5) analyze data; 6) develop options; 7) present options; 8) agree on implementation; 9) implement plan; 10) monitor plan. Hansen acknowledged the CFP Board's current Practice Standards as the source for these processes.

Tombs provided an RSP update which is newly organized and updated within a "Settlement Planning Education Center" (SPEC) website. SPEC, "an online education provider" for the settlement planning profession, is owned and operated by a public charity ("Friends of Settlement Recipients, Inc."), according to Tombs. An RSP Board, Tombs stated, owns and awards the RSP designation and approves, administers and promotes the program. Although the RSP is "independent" of the SSP, according to the SPEC website, SSP helped start RSP and supplied initial funding. The Missions of the RSP and the SSP are "congruent".

The SPEC website provides additional information about the RSP courses and the SPEC faculty and includes a detailed list of Frequently Asked Questions (with Answers) plus multiple "How-To" Videos. The RSP program is entirely online and self-paced. The total cost of the program will be "about $4750" per person. Additional contact information is available on the SPEC website.

The remaining SSP educational programs were topically diversified, well-organized and professionally delivered - easily matching the high standards of past SSP Annual Conferences. Additional topics and speakers:

• Settlement Taxation Update and Commonly Missed Savings - Jeremy Babener
• Are MSAs Required on Liability Cases? - Josh Pettingill; Joe Anderson; Patrick Hindert (moderator)
• The ACA's Impact on Special Needs Trusts - Pi-Yi Mayo
• ERISA, Medicare Advantage and Medicare Refunds - David Place
• Life Insurance in Settlement Planning - Michael Sharpe
• Trust-Based Comprehensive Settlement Planning - Beth Wheeler
• The ABLE Act - Tom Stanley
• Settlement Strategies for Cases Involving Public Benefits - Will Lindahl
• Using MoneyGuidePro in Settlement Planning - Larry Peterson; Cam Bowen; Joseph Tombs

Congratulations to SSP, especially Conference Chairs Steve Halterbeck and Rhonda Bentzen, for an outstanding 2017 SSP program and educational experience. For S2KM's reports on past SSP conferences, see the structured settlement wiki.

Structured Settlement 2016 Annuity Sales

Among many recent structured settlement industry developments, perhaps the most significant and impressive has been the continuation of sustained primary market annuity sales growth - especially in the context of various industry challenges. These challenges have included: 1) the aftermath of the ELNY insolvency; 2) continuation of historic low interest rates; 3) public exposure of unsavory secondary market business practices; and 4) a generational transition within the structured settlement industry.

Despite these challenges, primary market annuity sales (on a comparative basis with prior years) totaled $5.73 billion in 2016 (based upon 24,750 cases with an average case size of $231,478) according to industry estimates compiled and recently distributed by Melissa Price. 2016 sales totals compare favorably, and show a steady increase, compared with similar sales totals for these prior years::

• 2015 - $5.35 billion
• 2014 - $5.25 billion
• 2013 - $5.13 billion
• 2012 - $4.82 billion

For the first time, Ms Price's 2016 report included structured settlement annuity sales by USAA. Although USAA is a member of the National Structured Settlement Trade Association (NSSTA), it is S2KM's understanding that USAA is one of multiple "affiliated" life companies that limits its structured settlement sales to internal USAA claims only. Typically, because these companies don't compete for external business, they don't report their sales data.

Inclusive of USSA, 2016 structured settlement sales totaled $5.80 billion (based upon 25,201 cases with an average case size of $230,320. Even including USSA, the 2016 annual premium totals still fall short of the historic 12 month industry high ($6.2 billion in 2008) after consistently averaging close to $6 billion annually from 2001-2007.

It should also be noted, that while structured settlement premium has continued to increase since 2012, the number of structured cases has not noticeably increased - resulting in an ever-increasing average case size. This development may be explained by more structured settlement brokers transitioning to a settlement planning approach, which by definition targets larger cases. For example, Ringler, historically the largest U.S. structured settlement broker, has recently re-branded itself as "the largest settlement planning company in the nation."

Incorporating the USAA 2016 numbers, and adding the 2016 results to historic U.S. structured settlement totals, S2KM estimates the following primary market metrics from 1976 thru 2015:

• Total annuity premium: $156 billion.
• Total structured settlement cases: 879,000
• Average annuity premium: $177,474

Berkshire Hathaway continued its recent primary market leadership in 2016 by generating $1.504 billion of structured settlement annuity premium - a 15% percent increase from 2015. For the first time since 2011, two companies exceeded $1 billion in structured settlement annuity sales as Pacific Life increased its 2016 total to $1.186 billion from its year earlier total of $871MM - a 36% percent increase.

The U.S. structured settlement market now consists of nine NSSTA-member annuity providers who report their structured settlement annuity sales - down from more than 20 as recently as 2002. 2016 sales results (rounded in millions) for the seven other structured settlement annuity providers (per Ms Price's report) plus the rounded percentage increase (+) or decrease (-) from comparable 2015 results:

• MetLife: $815MM (+6%)
• Amgen: $688MM (+12%)
• Liberty Life: $513MM (-6%)
• New York Life: $487MM (+32%)
• Prudential: $399MM (-48%)
• Mutual of Omaha: $141MM (+44%)
• USAA: $72MM (first report)

Ms Price's 2016 compilation also reports an annual increase in annuity premium for non-qualified structured settlement assignments (from $190.3 million in 2015 to $199.2 million in 2016) as a portion of the overall structured settlement numbers. Non-qualified assignments represent transfers of periodic payment obligations that do not meet the requirements of IRC sections 130 and 104(a)(1) or (2) including deferred attorney fees.

From S2KM's perspective, several factors help to explain the sustained primary market sales growth:

• Increased Industry Unity - As former SSP President Neil Johnson pointed out in 2014, for many years, an historical lack of structured settlement industry unity created a drain - a drain on financial resources ... a drain on productivity ... a drain on our public image ... a drain on physical and emotional health. Lack of unity diverts attention from productive projects." Recent leaders of NSSTA, SSP and NASP have encouraged greater cooperation and focused their associations on more productive projects.
  • SSP - As an organization, SSP is no longer a political advocate for injury victims' rights. As Joe Tombs, its current President, stated in this recent S2KM interview: "A year ago, we decided to abandon taking 'political' positions.'' Instead, Tombs added: "1) SSP has substantially expanded its membership; 2) we have re-focused on professional settlement planning as our primary Mission and purpose; 3) we have pretty much put to bed the idea that we oppose NSSTA; and 4) we have developed a new set of Professional Practice Standards which we will introduce during our 2017 Annual Conference."
  • NSSTA - Although NSSTA continues to advocate for structured settlements, NSSTA has likewise undertaken its own initiatives toward achieving greater industry unification. As identified by former NSSTA President Michael Goodman in 2014, these initiatives have included: 1) a strong relationship with the AAJ; 2) improved dialogue with the SSP; 3) guest educational participation involving SSP and NASP representatives; 4) successful cooperation with NASP to enact revised structured settlement protection legislation in multiple states.
• Market Research - Among the structured settlement growth opportunities, expanded use by traditional stakeholders represents arguably the number one priority - a priority which NSSTA highlighted during 2014 by commissioning CLM Advisors to conduct a three-part survey of senior claims executives (Part 1); front line claims professionals (Part 2); and plaintiff attorneys (Part 3). For S2KM's summary and analysis of these surveys, see:
  • Senior Claim Executives
  • Claim Professionals
  • Plaintiff Attorneys
• Transitional Goals- During NSSTA' 2015 Annual Meeting, Goodman announced a series of transitional growth-oriented goals for NSSTA and its members: 1) modifying NSSTA's traditional "protect and preserve" message to inspire primary market growth; 2) moving beyond "interest rate selling"; 3) moving beyond a focus on factoring; 4) identifying and pursuing new markets for structured settlement annuities; 5) adding one or more new life company providers; 6) engaging new, younger structured settlement brokers; 7) providing a new and improved training initiative.
• Growth Initiative Committee - To help support these goals, NSSTA's Board of Directors established a new NSSTA "Industry Growth Initiative," "designed to identify opportunities to expand the use of structured settlements and bring those opportunities to the structured settlement industry marketplace." The first Growth Initiatives to be selected and approved:
  • Rejuvenate Defense Programs (including casualty insurers, commercial insureds and TPAs) - Originally the prime movers for structured settlements, many defense insurers have reduced or completely abandoned their structured settlement programs citing a variety of reasons.
  • Amend the Federal Employee Compensation Act - FECA, which provides workers compensation like benefits for federal workers, currently does not permit structured settlements.
  • Convertible Deferred Lump Sums - As a sales response to "low interest rates", the Growth Committee proposed a new structured settlement feature. As envisioned, the convertible deferred lump sum would allow a structured settlement recipient to select a future lump sum that would automatically convert on its payment date into a series of predetermined periodic payments payable at whatever annuity rates offered at the time of conversion by the issuing life company.
  Under current President Len Blonder and current Growth Committee Chair Sean Coleman, the number of Growth Initiatives continues to expand with assistance from new NSSTA Communications and Marketing Director Abbey Hudson.
• Educational and Lobbying Support - To support its Growth Initiative, NSSTA has also expanded both its educational and certification programming as well as its strategic lobbying and lobbying partnerships. Educational Committee Co-Chairs Jordan Bossler and Nolan Robinson, CSSC Co-Chairs Karen Meyers and Patricia Fairhurst, and their respective committees, plus Compliance and Administrative Director Debbie Sink provide NSSTA with its strongest-ever group of educational resources. NSSTA Executive Director Eric Vaughn, who also serves as Vice Chair of the American Association for People with Disabilities (AAPD) and manages the Congressional Structured Settlement Caucus , has continued to expand NSSTA's lobbying outreach thru strategic relationships with national special needs attorney associations.

Ms Price's reports do not provide information about the structured settlement secondary market. For S2KM's most recent estimates of secondary market metrics, see this prior blog post. Based upon industry sources, it is S2KM's understanding that structured settlement secondary market sales declined during 2016.

S2P2J Release 61

The United States structured settlement industry has been in existence for more than 40 years and continues to expand its scope, complexity and importance within the context of personal injury settlement planning. The industry consists of both a primary and secondary market and includes "off-shore" funding products. Certain structured settlement products utilizing periodic payments provide tax advantages. With increasing frequency, structured settlement products are being integrated with other financial and insurance products and government benefits into personal injury settlement plans utilizing 468B Qualified Settlement Funds and consisting of settlement trusts, special needs trusts, and Medicare set-aside arrangements.

Since it was first published in 1986, "Structured Settlements and Periodic Payment Judgments" (S2P2J), has provided professionals and other stakeholders involved with structured settlements an authoritative reference guide, consisting of 16 chapters with extensive footnotes and Appendix documents, to help them understand issues and fashion settlements and judgments utilizing periodic payments. Both the National Structured Settlement Trade Association (NSSTA) and the Society of Settlement Planners (SSP) have utilized S2P2J as an educational resource for their certification programs.

Co-authored and updated semi-annually by Daniel W. Hindert, Joseph J. Dehner and Patrick J. Hindert, S2P2J features an online version as well as the traditional hardcopy. Online S2P2J includes a search feature and download capability plus link features to access individual book sections, appendices, footnotes, cases and statutes.

Publisher Law Journal Press anticipates a March 2017 distribution date for hardcopy supplements for S2P2J Release 61 with online S2P2J subscribers receiving their update simultaneously with no additional subscription charge. Competent professionals confronted by structured settlement issues should have access to an up-to-date copy (or the online version) of this indispensable source book.

Release 61 Highlights - Release 61 will feature new, updated and/or expanded sections addressing the following structured settlement topics among others:

• Ezell v. Lexington Ins. Co. - Although the Complaint in this class action lawsuit was only recently filed, Release 61summarizes the Complaint and considers the plaintiffs' allegations from the perspective of "the best protection for the defense against the risk of future claims by claimants that they were misled in understanding how the 'cost' was calculated..." S2P2J's recommendation (with sample Appendix documentation): "[D]isclose the material elements of how the agreed amount will be allocated to acquire the funding vehicle and put a long-term obigor in place. Full disclosure of such elements would eliminate any basis for a later claim that a settling claimant was misled when agreeing to a structured settlement."
• Special Needs Trust (SNT) Fairness Act - Among NSSTA's strategies for growing the structured settlement market, the importance of special needs (SN) attorneys is receiving greater recognition and priority. With the enactment of the SNT Fairness Act in December 2016, the growth potential for both SNTs and structured settlements has expanded. Prior to December 2016, an injured person who received settlement funds could not create his/her own SNT. Only a parent, grandparent, guardian or court could establish a first party SNT. With this new legislation, persons with disabilities can create their own SNT unless they are mentally or legally incompetent to do so. Release 61 integrates coverage of the SNT Fairness Act into S2P2J's broader coverage of structured settlements and government benefits including Medicaid, Medicare, Veterans Benefits, Federally Assisted Housing, the Affordable Care Act and ABLE Accounts.
• Contract Rights - Although a structured settlement results in a contractual obligation to make periodic payments, a party that is released from liability need not become contractually obligated for the future payments. Release 61 summarizes and discusses Nutt v. United States, a 2016 case brought by an ELNY shortfall victim. The case provides an example of how the wording of a structured settlement agreement determines whether a claimant has enforceable rights against a specific defendant, separate from the life insurance company that issued the annuity. The Court of Appeals affirmed a trial court's holding finding the language of the 1985 settlement agreement required the United States only to purchase annuities to fund future periodic payments and did not require the Government to make or guarantee the payments.
• Off-Shore Companies - The increase in popularity of non-qualified assignments has resulted in efforts by some companies to offer what appear to be qualified assignments funded by companies located outside the United States. They sometimes purchase factoring rights to structured settlement payments and use these rights to offer higher effective interest rates than traditional annuity-financed structured settlements. Sales materials supporting these transactions sometimes maintain that these arrangements offer the same level of benefits and protection as traditional structured settlements. Release 61 expands prior S2P2J discussions of the substantial risks to parties entering into such agreements with offshore companies including risks for the professionals who recommend such transactions.
• Settlement Documentation - Once the terms of a structured settlement have been determined, all required closing documents must be drafted in a manner which fulfills each client's financial expectations and protects each client's legal interests. Skill is required to avoid mistakes and to anticipate potential future issues that could impact periodic payments. S2P2J devotes an entire chapter to "case closing" including issues arising after case closing. Release 61 highlights recent cases detailing the consequences of problematic settlement documentation followed by a divorce, bankruptcy, unanticipated death sequences or disputed estates.
• ELNY Class Action - Release 61 includes a summary update for a class action (Kelly v. Ringler) brought on behalf of ELNY shortfall victims which remains unresolved after a Federal District Court in Oregon denied dismissal of claims based on negligence and on certain Oregon and Alaskan statutory provisions, while granting dismissal of a claim that defendants had a continuing duty to inform the plaintiffs that their annuity stream from ELNY was threatened because of its declining financial condition. A similar class action against structured settlement broker EPS was settled in 2015. Note: this paragraph was edited on February 16, 2017.
• Secondary Market Updates - Until 2016, almost all secondary market case law developments related to transfers under state protection statutes. In 2016, the federal Consumer Financial Protection Bureau (CFPB) filed Complaints against two structured settlement factoring companies, J.G. Wentworth and Access Funding. Release 61 updates and extends S2P2J earlier coverage of CFPB involvement in these cases and its potential jurisdiction to protect recipients of factoring transactions. Additional secondary market topics addressed in Release 61 include: Brenston case follow-up; anti-assignment provisions; commutations vs. transfers; case law defining "best interest" and proscription of split payments under some state protection statutes; continuing litigation involving arbitration clauses; plus expanded discussion of securitization including risks and issues with "re-cycled" structured settlements.

Previous recent S2P2J releases have highlighted and addressed the following structured settlement related developments and market growth opportunities:

• Updated Structured Settlement History Chart.
• Updated analysis of changes impacting primary market structured settlement business practices.
• Background coverage of the Consumer Financial Protection Bureau's civil investigation of J.G. Wentworth.
• Historical context for Washington Post reporting about abusive secondary market business practices in Maryland.
• Case examples for various tax concepts, provided by Professor Ken Melani of the University of Notre Dame, who teaches the tax section of NSSTA's CSSC program.
• Duties of settlement trustees under the Uniform Prudent Investors Act plus factors settlement trustees must consider when making investments.
• Analysis of NSSTA's recent marketing surveys of claims executives, claims professionals and plaintiff attorneys.
• Summary of a recent California lawsuit warning of potential malpractice dangers for plaintiff attorneys who are: 1) uninformed; 2) lack competent advisors; and/or 3) act carelessly; with regards to structured settlement issues.
• Expanded discussion of "product suitability" and how it impacts structured settlement and settlement planning professionals.
• Wrongful Convictions Tax Relief Act of 2015.
• Court decisions analyzing "safe harbor" annuity rules under the Deficit Reduction Act of 2005 when annuities are used to preserve Medicaid eligibility.
• New cases where courts have identified questions to help judges determine whether proposed transfers of future payment rights meet the "best interest" test under various state Structured Settlement Protection Acts.
• Non-qualified assignment issues - including tax and security issues raised by off-shore assignment companies.
• Expanded coverage of Workers Compensation and Liability MSAs.
• Summary and discussion of recent PLR for indexed annuities and commutation riders.
• Introduction to ABLE Accounts.
• Practice tips for minimizing the risk of an IRS settlement challenge.
• Updated summary of lessons learned from the Executive Life Insurance of New York (ELNY) insolvency.
• Periodic payment reinsurance as an alternative means of funding structured settlements.

Also Note: all three S2P2J co-authors will appear on the same panel March 2 at the SSP 2017 Annual Conference in Las Vegas to lead a discussion titled "Current Developments in the Structured Settlement Industry."

Interview with SSP President Joe Tombs

Joe Tombs is currently completing the first year of a two-year term as President of the Society of Settlement Planners (SSP). SSP's 2017 Annual Conference is scheduled for March 1-3 in Las Vegas. As Tombs prepares for this event, he agreed to answer a few S2KM questions about SSP's current status and future direction. In a prior S2KM blog post, Tombs responded to the AIG Class Action Lawsuit - stating SSP is "neutral" and that SSP, as an association, has decided as a matter of policy to abandon taking any “political” positions.

S2KM: Joe, thank you for agreeing to this interview. To further clarify SSP's new "no political positions" policy, you have also stated that SSP is now neutral about single-claimant 468B Qualified Settlement Funds - one of the most contentious issues within the primary structured settlement market during the past several years. Just to confirm, are you saying the SSP, as an association, no longer supports and/or will no longer advocate for single-claimant 468B QSFs?

TOMBS: That is correct. Our refusal to take a position should not be misunderstood to imply anything about our individual members. The SSP has been a zealous advocate of the single-claimant QSF in the past and I doubt any of our members have changed their opinions on the subject. We are not asking our members to suppress or to modify their own beliefs.

S2KM: What about factoring which arguably represents the most divisive political issue within the structured settlement market? If SSP is neutral, how do you explain SSP's current membership policy which to use your own words "is open to anyone interested in comprehensive settlement planning as long as they are not engaged in factoring". Doesn't SSP's membership policy itself represent a "political position"?

TOMBS: The SSP does not have an opinion on factoring. Several years ago, we held a conference in which many participants from factoring companies attended and participated. Their presence at our meeting annoyed some SSP members and a special meeting of members was called to address this issue. At that meeting, the membership voted almost unanimously to close off new membership to those applicants who were active in the factoring industry. We also decided not to expel the very few of our members who had drifted into factoring. Our individual members' views on factoring are varied and generally quite negative, but the reason factoring representatives are excluded from membership centers on the fact that we want to focus on planning at the time of settlement. (Tombs' emphasis). My personal opinion is that there is nothing wrong with a person who ethically engages in factoring, but that the world would be a net better place if factoring did not exist.

S2KM: What do you consider to be your most significant accomplishments during your first term as SSP President?

TOMBS: Recognizing we still have more than six weeks left to achieve first year objectives, I am especially proud of four accomplishments: 1) SSP has substantially expanded its membership; 2) we have re-focused on professional settlement planning as our primary Mission and purpose; 3) we have pretty much put to bed the idea that we oppose the National Structured Settlement Trade Association (NSSTA); and 4) we have developed a new set of Professional Practice Standards which we will introduce during our 2017 Annual Conference.

S2KM: How large is SSP and where are you finding new members?

TOMBS: I anticipate we will meet our goal of having 300 members by the time of our 2017 Annual Meeting. Many of our new members are trust officers, financial planners, special needs trust attorneys and staff from settlement planning practices. The new face of the SSP is truly the new faces at the SSP and the different perspectives they bring are propelling us forward in an exciting new direction.

S2KM: Have structured settlement annuity providers supported the concept of "comprehensive settlement planning"? If not, why not?

TOMBS: I don't think most structured settlement annuity providers understand the significance of settlement planning - or how it differs and/or relates to structured settlements. They are just beginning to wake up to the concept and realize how important and how effective the settlement planning model can be. My experience has shown that whenever a plaintiff attorney sees and understands the settlement planning model, they will never again be satisfied with a structured settlement broker who only offers one product. Think about what happened to flip phone providers when smart phones hit the market. I predict the same thing will happen with settlement planning. If structured settlement annuity providers wait too long to transition, trust companies will have captured first mover advantage.

S2KM: At one time, the term "settlement planner" was viewed by many structured settlement stakeholders as an inflated synonym for "plaintiff broker". How would you differentiate a professional settlement planner from a structured settlement consultant?

TOMBS: Until recently, that view was entirely accurate. A plaintiff broker would simply order new business cards with the new title ("Settlement Planner") proudly displayed. Today, however, that transition creates changes in expectations, applicable standards of care, and required levels of disclosure. A structured settlement consultant approaches an engagement with a product in mind. By comparison, a settlement planner (with access to multiple products) first gathers information about the goals of the injury victims and his/her family, analyzes the data, works out a written plan, and implements the plan. A settlement planner does not play the role of a structured settlement broker, if at all, until the last step.

S2KM: What is a "comprehensive settlement plan" and how does it differ from a "structured settlement"?

TOMBS: A structured settlement is a product. A "comprehensive settlement plan" is a blueprint. It is a written document that contains a summary of the detailed analysis of the client's situation, capacities, goals, priorities, needs, and resources - and the strategies and products that will best help that client use the settlement proceeds to successfully transition into a post-settlement life in a way that allows them to accomplish their highest priority goals. The settlement planner uses the plan to guide the injury victim through the settlement process. Many of my settlement plans do not include structured settlements, but most do.

S2KM: What role(s) do you see for structured settlement annuities in settlement planning?

TOMBS: Structured settlements provide tax-free guaranteed cash flows that can be matched to the exact time that the cash flow is projected to be needed. It is a valuable tool in a settlement planner's toolbox. Carpenters love their hammers, but I would never hire a carpenter who showed up to work with only a hammer.

S2KM: What is SSP's current relationship with NSSTA and what would you like it to be?

TOMBS: Most of the SSP members who produce structured settlements are also members of NSSTA. The SSP's past opposition to a few of NSSTA's political positions has frayed the relationship despite great strides to mend the fences by both sides. Today, the SSP leadership fully supports NSSTA and its Mission to preserve and protect structured settlements. I believe the two organizations are symbiotic - if one does better, so does the other.

S2KM: How are SSP and NSSTA different from SSP's perspective? Do we need two associations or should their efforts be combined?

TOMBS: SSP and NSSTA are two very different organizations with completely different Missions. We share a common ancestry, but we have evolved into separate species. The difference, which is evident in our names, is not subtle, semantic, or political. Today, most of our members, sponsors and seminar attendees do not even sell structured settlement annuities. Let that fact settle in for a minute and you will begin to comprehend the extent to which the SSP and settlement planning have evolved.

S2KM: What is the scope of SSP's new "Professional Practice Standards"? Will they Replace SSP's current "Standards of Professional Conduct"? If not, how are they different?

TOMBS: At our 2017 Annual Meeting, we will announce and release practice standards that will define settlement planning and authoritatively set out the scope of the practice of settlement planning. Don't expect something complicated. SSP's Professional Practice Standards will be simple, profound statements. They will be different from a Code of Ethics or our Code of Professional Conduct. Our current Code of Professional Conduct is too structured settlement centric and is currently under review by an SSP committee. I suspect it will receive major modifications soon.

S2KM: What is the current status of the Registered Settlement Planner (RSP) Program? How many professionals currently possess the RSP designation?

TOMBS: The RSP designation is administered by a separate Board. The number of RSP designees is small - probably just over twenty. The program was dormant for a long time and has now been freshly updated with several students enrolled.

S2KM: Looking ahead to your second term as SSP President, what are SSP's greatest challenges?

TOMBS: We can't grow the number of professional settlement planners fast enough to keep up with market demand. This forces us to focus on two goals - increasing our membership and increasing the professionalism of our craft. We are making progress on both fronts, but we simply cannot go far enough or fast enough to meet the demand. Another great challenge is that we face resistance from entrenched businesses that actively try to slow us down to allow them to catch up.

S2KM: Joe, thank you for taking time to participate in this interview. Congratulations for your progress with SSP and best of luck for another outstanding SSP educational conference March 1-3 in Las Vegas.

SSP President Responds to AIG Class Action Lawsuit

Based upon the history of the Society of Settlement Planners (SSP), and the role of Richard Risk (an SSP founder and member) as one of the plaintiff attorneys, structured settlement industry participants might assume that SSP, as an association, supports the recently filed AIG Class Action Lawsuit. When asked by S2KM, however, SSP President Joe Tombs provided an unexpected response. Tombs' detailed response appears below. For context, however, S2KM first provides a brief background summary plus a summary of the AIG Class Action allegations.

Historic Industry Divisions

Although some structured settlement industry pioneers, including the late David Ringler, the first President of the National Structured Settlement Trade Association (NSSTA) envisioned NSSTA as "a place where everyone and anyone [could] sit down with each other and discuss the issues and viewpoints regardless of beliefs", that utopian environment never fully materialized as multiple divisions developed within both the structured settlement market and the larger personal injury settlement consulting market. Examples include:

• Plaintiff vs. defense structured settlement brokers.
• Primary vs. secondary structured settlement markets.
• Structured settlements vs. settlement planning.
• Settlement annuities vs. settlement trusts.
• Settlement planning vs. special needs planning.

Among other results, the structured settlement industry now has both a primary and a secondary market and structured settlement industry participants with alternative issues, viewpoints, beliefs and educational interests have formed two national associations in addition to NSSTA: the National Association of Settlement Purchasers (NASP) and SSP. Although numerous and divisive issues have created serious political conflicts among these associations historically, leaders of all three associations have increasingly recognized and addressed the problems created by these conflicts.

During his three successive one year terms as SSP President, Immediate Past President Neil Johnson served as a powerful advocate for structured settlement industry unity. For example, as a guest speaker during NSSTA's 2014 Fall Conference, Johnson condemned lack of structured settlement industry unity as "a drain - a drain on financial resources ... a drain on productivity ... a drain on our public image ... a drain on physical and emotional health. Lack of unity diverts attention from productive projects. It always focuses attention on the negative, never on the positive. Lack of industry unity shows no partiality or favoritism for either NSSTA or SSP."

At the same time, Johnson proposed a "solution" for achieving structured settlement industry unity including these core elements:

• Recognizing and accepting product and professional diversity.
• Identifying and pursuing permanent shared interests without necessarily agreeing on all issues.
• Engaging all perspectives to discuss industry problems and issues.
• Promoting and practicing settlement planning with the structured settlement annuity as a core strategic product.

Among other highlights and milestones, the Society of Settlement Planners (SSP) 2016 Annual Conference transferred association leadership from Johnson to Joe Tombs with Tombs promising to maintain Johnson's leadership direction, which focused on structured settlement "industry unity", and also, in a dramatic policy shift, to "pull SSP back completely from structured settlement politics."

AIG Class Action Lawsuit

Earlier this month, three plaintiff attorneys, including SSP founder and current SSP member Richard Risk, filed a Class Action Complaint in United States District Court District of Massachusetts. Among its allegations, the Class Action Lawsuit accuses Defendant American International Group, Inc. (AIG), a NSSTA member, and several of its affiliates of: 1) RICO violations; 2) fraudulent conduct; and 3) unjust enrichment.

Although not named as Defendants, the Class Action Complaint also identifies multiple structured settlement brokers (most, if not all, members of NSSTA) who, according to the Complaint, are "known as 'Agency Partners' [and] have been on the AIG Approved Broker List within periods relevant to this Complaint, and are part of the racketeering enterprise at issue..."

Plaintiffs characterize the primary AIG business practice they allege is illegal as a "short-changing scheme" which they describe as follows: "Defendants’ practice to fail to disclose to Plaintiffs and other members of the Class numerous material facts concerning how AIG conducted its Structured Settlement Program including, among other things, that:

• "Defendants participated in a short-changing scheme designed to allow them to recover the cost of their own structured settlement brokers, by deducting the brokers’ fees from that portion of the settlement that the settling parties had previously agreed would be one hundred percent (100%) invested in future payments;
• "Defendants accomplished this “short-change” by bundling the amount of the broker’s commission—namely, four percent (4%)—into the illustrated annuity cost;
• "Even when the broker’s fee was not 4%, AIG would keep for itself whatever portion of the commission was not paid to the broker; and,
• "As a result of the scheme undertaken by Defendants, the actual financial value of the settlement was materially lower than the value represented to injury claimants since four percent (4%) of the full amount of cash to be invested in annuity was, in fact, diverted by AIG to pay for its own Approved Brokers and In-House Brokers."

Other Plaintiff allegations:

• "AIG uses a structured settlement annuity software and quoting system that is represented by it and the Approved Brokers (and In-House Brokers) as illustrating future projected payments based on the amount of funds previously agreed between the settling parties to be invested in the annuity. But this representation is not true, because it does not reflect the commission that is paid to the broker, which is hidden in the cost or present value of the annuity communicated to the claimant or claimant’s attorney."
• "In fact, AIG trains its employees in the Structured Settlement Program, as well as its Approved Brokers and In-House Brokers, not to disclose to claimants (or their attorneys when retained) the fact that the broker’s fee is bundled into the represented annuity investment cost."
• "AIG’s employees, its Approved Brokers, and In-House Brokers are also trained to conceal this scheme, in the event of claimant inquiries about the payment of commissions, by avoiding a direct answer to the question or, sometimes, by indicating that payment of annuity premiums from the defendant’s AIG-affiliated liability insurer to American General avoids commission as a cost to claimant."
• "The AIG Approved Brokers are also required to fund periodic payments with an American General or other AIG-related annuity, if at all possible. This requirement is called the 'first and last right of refusal'.”

The Complaint includes a footnote #1 (page 1) explaining/alleging that: 1) most structured settlement "producers" are inappropriately referred to as "brokers" when in fact they are "agents" appointed by life insurance companies; 2) Use of the term "broker" is misleading and communicates a false duty of loyalty to the consumer/injury victim; 3) although a producer may hold a life agent's license, he/she cannot bind the life company when writing an annuity application; and 4) this distinction becomes important for defining a racketeering "enterprise" under the RICO Act when considering the relationship of structured settlement producers to issuers.

SSP President Joe Tombs Responds

Based upon the political history of the SSP, and role of Risk as plaintiff attorney, the AIG Class Action Lawsuit appears to present a significant test for SSP - especially in light of Immediate Past President Neil Johnson's advocacy for structured settlement unity and current President Joe Tombs' promise for SSP to avoid structured settlement politics. When asked by S2KM whether or not SSP supports the AIG Class Action Lawsuit, however, Tombs provided the following response (with S2KM emphasis):

• "We are neutral – SSP has no position at all and we will not take one in the future. A year ago, we decided to abandon taking “political” positions. Advocacy for victim’s financial rights had been a central mission of the SSP since its founding and so it was hard to let that go. A pillar of the “old” SSP’s advocacy mission was opposition to many of the features of some of the casualty company programs. Therefore, many people are confused that we don’t have a dog in this fight. Everyone expects the SSP to rush out and take its normal spot in the circular firing squad and start blastng away or at least provide the forum for a mob to form. I’m sorry to disappoint people but we are neutral - on the AIG Class Action Lawsuit or any political issue such as single claimant 468B Qualified Settlement Funds. Individual SSP members have the option to support or oppose specific political issues. SSP, as an association, however, will not. Our priorities are growth and the promotion of professionalism in the practice of settlement planning - both of which we are accomplishing successfully.
• "Dick Risk is a founding member and we once honored him with a lifetime achievement award at which time we granted him lifelong membership. The SSP makes no attempts to muzzle or restrain our members. They are free to think, say, or do what they wish. We used to carefully guard our roll and membership was open only to plaintiff-only structured settlement brokers. Today, membership is open to anyone interested in comprehensive settlement planning as long as they are not engaged in factoring. Our membership includes a diverse group of structure brokers from most of the larger groups, trust company officers, financial planners, special needs trust attorneys, plaintiff attorneys and many others.
• "Separate from my role as President of SSP, I have my own opinion about the AIG Class Action Lawsuit. Part of my opinion is based upon a lunch I was honored to have in 1997 or 1998 with Hank Greenberg (then CEO of AIG) and Ernie Stempel (then President of North American Operations for AIG Life & Annuity). I remember Mr. Greenberg talking about a huge high-rise building with several floors full of nothing but lawyers. He then informed me AIG spent millions on outside counsel and had other AIG lawyers scattered across the globe. In my opinion, if AIG is right, they are more than adequately equipped to handle this case without help from me or anyone else.
• "Another part of my personal opinion is that I hate structured settlement politics and I am not smart enough or educated enough to know which side is right in this lawsuit. It is a fact, however, that many of my clients cannot chose from a full selection of structured settlement products or product providers - and another fact that my market quotes include fewer companies than they did a few years ago. I wish I could still quote Hartford, for example, but we know what happened after their class action settlement. So, although I can see the AIG battle lines forming, I don't have time for the fight myself. I have an appointment with a widow this afternoon and I only wish I could offer her and her freshly fatherless children a greater assortment of structured settlement options. And if a lawsuit against AIG should ever cause American General to withdraw from the structured settlement market, I would have a still shorter list of companies to offer my clients."

Joe Tombs is currently completing the first year of a two-year term as SSP President. SSP's 2017 Annual Educational Conference is scheduled for March 1-3 in Las Vegas. As Tombs is preparing for this event, he agreed to answer a few additional S2KM questions about SSP's current status and future direction. That interview will appear in a follow-up S2KM blog post.

NAMSAP 2016 Annual Conference

The National Alliance of Medicare Set-Aside Professionals (NAMSAP), "the only non-profit association exclusively addressing the issues and challenges of the Medicare Secondary Payer (MSP) Statute and its impact on workers’ compensation and liability settlements", hosted its 2016 Annual Conference September 14-16 in San Antonio, Texas.

NAMSAP, which also seeks and welcomes opportunities to help improve Medicare set-aside (MSA) industry standards for documentation, work product and business practices, encompasses a highly diverse professional membership consisting of attorneys, MSA allocators, MSP compliance consultants, CPAs, claims professionals, structured settlement consultants, guardians, nurses, pharmacists, rehabilitation professionals, and life care planners.

As S2KM has observed in reports about past NAMSAP conferences (see links below), the combination of membership diversity, subject matter complexity, legislative and regulatory developments plus an expanding MSA market create extraordinary challenges for NAMSAP in planning and organizing its educational programs. This year's conference, co-chaired by NAMSAP President Gary Paturneau and Michelle Allan, should be congratulated for setting new standards for attendance (180) and sponsor/exhibitors (15) as well as the quality and organization of the speakers and extensive handout materials. The conference educational program was divided into two parts: an "MSP Crash Course" and the General Conference.

NAMSAP 2016 CONFERENCE

TOPICS AND SPEAKERS

MSP "CRASH COURSE"

• MEDICARE SECONDARY PAYER ACT 101 - Dan Anders and Leslie Schumacher
• GENERAL ANATOMY OF THE WCMSA REFERENCE GUIDE - Jake Reason and Kathleen Wyeth
• WHAT WOULD CMS DO? - Barbara Fairchild and Erin O'Neill

GENERAL CONFERENCE

• CONFERENCE INTRODUCTION - Gary Paturneau and Michelle Allan (Co-Chairs)
• MEDICARE ADVANTAGE ORGANIZATION CASE LAW - Ciara Koba; Heather Sanderson Hon Lee Yeakel; Jennifer Jordan
• CIVIL MONETARY PENALTIES - Katie Fox; Monika Boswein
• CURRENT STATE OF CONDITIONAL PAYMENT RECOVERY - Michele Carey; Shawn Deane; William Delaney
• PRIMARY PAYER APPEALS - Deborah Robinson Stewart; Melissa Woitalewicz; Kim Young
• ADVENTURES IN ALLOCATING - Christine Melancon; Beth Hostetler; Jake Reason
• SUBMISSION VS. NON-SUBMISSION (OPT-OUT) FOR WC - John Cattie; Jennifer Jordan; MeLinda Petit; Robert Sagrillo; Mark Sidney; Rita Wilson; Mark Walls (Moderator)
• LIABILITY MSAS - David Cherry; Roy Franco; Thomas Spratt
• SETTLEMENT LANGUAGE - Joy Brewer; James Raines; Vincent Quatrini
• CONFLICTS WITH STATE LAW - Jeanmarie Calcagno (IL), Rodney McColloch (GA), Joseph Schneider (TX)
• WCMSA RE-REVIEW PROCESS - Carmen Folluo; Shannon Metcalf; Kimberly Wiswell
• MITIGATING COSTS WHILE PROVIDING QUALITY CARE - Amy Bilton; Amy Lee; Mark Pew; Pamela Schweitzer.
• WHAT IS AFFECTING STAKEHOLDERS - John Cattie; Doug Holmes; Greg McKenna; Gary Paturneau

NOTEWORTHY NAMSAP PRESENTATIONS

Among NAMSAP's many outstanding conference presentations, S2KM found the following most noteworthy from a structured settlement perspective:

• The "Crash Course" presentation "Medicare Secondary Payer Act 101", which also featured an informative Medicare Overview and included exceptional handouts, did not reference structured settlements. With that single proviso, however, this NAMSAP presentation successfully captured, organized and communicated applicable information and data better than any prior presentation S2KM has attended - and should become part of the core curriculum for future educational programs offered by the National Structured Settlement Trade Association (NSSTA) and the Society of Settlement Planners (SSP).
• Another NAMSAP "Crash Course" presentation which arguably should have, but did not, discuss structured settlements, was titled: "General Anatomy of the WCMSA Reference Guide". Specific references to "structured settlements" exist throughout the WCMSA Reference Guide - see, for example: Table of Contents 5.0; 5.2; 19.3; Appendix 3 (Glossary entry for "structured settlement"); and Appendix 5:15. Paradoxically, and more importantly, the subtitle for this NAMSAP's Crash Course presentation (the "Final resting place for the old CMS memos"), is critically important for understanding why structured settlements provide an inherent cost advantage, compared with cash, in funding WCMSAs - as S2KM first explained in this 2013 blog post and which appears to remain just as applicable and important in the context of CMS WCMSA Reference Guide Version 2.5.
• Only one NAMSAP 2016 conference presentation ("Settlement Language") substantively addressed structured settlements issues. Significantly, based upon S2KM's review, the structured settlement documentation included with the NAMSAP conference handouts for this presentation raised potential tax issues and highlighted a fundamental problem. The CMS WCMSA Reference Guide Glossary defines "structured settlement" as "[a] settlement in which the agreed-on funds are paid from an initial deposit and subsequent deposits on a regular basis for a given amount of time." Unfortunately, there is no specific link in the CMS WCMSA Reference Guide to either structured settlement tax law generally or the tax definition for “structured settlement” in IRC 5891(c)(1) or the tax requirements of IRC 130 and 104(a)(1) more specifically. Settlement documentation which may satisfies CMS, therefore, does not automatically satisfy the IRS.
• The concluding NAMSAP panel discussing "What is Affecting Stakeholders" provided a valuable, if overly brief, summary of the complex Federal and state legislative and regulatory developments re-shaping personal injury claim management and settlement planning. Although many of the Medicare-related developments were addressed individually by separate NAMSAP presenters, the "Big Picture" perspective helped to reinforce how dramatically and quickly systemic changes are redefining the marketplace. For the structured settlement industry to expand and retain a leadership position within these dynamic claim management and settlement planning markets, it follows (at least from S2KM's perspective) that industry leaders must improve their collective knowledge of the changing landscape (much of it related to government benefits) in order to help industry participants learn to re-position their sale from a stand alone alternative product to a critical component of integrated claim and settlement solutions.

ADDITIONAL S2KM OBSERVATIONS

During the NAMSAP 2014 Regional Conference, then NAMSAP President Michael Westcott explained why structured settlements and MSAs produce "a perfect match that also saves stakeholders on the cost of compliance":

• "A structured settlement is a contract that defines specific future periodic payments for a specific dollar amount for a specified time."
• "An MSA is an agreement with CMS to pay agreed upon future costs for an agreed dollar amount for an agreed period of time."

"Good settlement planning", Westcott added, "requires that all professional advisers know the roadmap to compliance." Unfortunately, he concluded, structured settlements continue to be underutilized amid too much discussion on process and too little on benefits.

Just as Westcott pointed out in 2014, structured settlements continue to be underutilized in 2016 - especially considering the inherent cost advantage CMS has provided for structured settlement funding of WCMSAs compared with cash. Among the reasons (from S2KM perspective): a strategic knowledge gap separates most of the structured settlement industry from the MSP community creating, especially for structured settlements, educational needs but also business opportunities. Some examples and thoughts:

• Among a diverse, intelligent and influential group of NAMSAP speakers, 15 exhibitors and 180 attendees, only six structured settlement brokers attended this year's NAMSAP conference; none of whom were featured speakers; and only one broker company exhibited. No structured settlement annuity provider representatives attended or exhibited.
• NSSTA's current Certified Structured Settlement Consultant (CSSC) certification program does not cover MSAs, or the MSP Act or government benefits more generally. This educational omission probably results, at least in part, from NSSTA's historic political and marketing slogan that: "structured settlements enable injury victims to live free of reliance on government assistance".
• Regardless of its historic accuracy and/or value, this political/marketing slogan now appears not only false but contradictory and counterproductive. For many of the most promising and strategic structured settlement submarkets (including not just MSAs, but also special needs trusts, the Affordable Care Act, and the ABLE Act) the challenges and growth opportunities require integrating structured settlements with government benefits.
• In 2014 NSSTA commissioned separate surveys of senior claims executives, claims professionals and plaintiff attorneys. Significant for Medicare and MSAs, two thirds of the senior claims executive survey participants said they believed that structured settlement broker/consultant skills had stayed the same compared to 10 years ago and that they would value more educational and informational services about MSA requirements. They also recommended that structured settlement broker/consultants expand their Medicare services. Claims professionals, when asked their preferred areas for more education, gave their highest response by far (71%) to MSAs.
• Providing a "carrier perspective" on MSA compliance during their 2014 NAMSAP Regional Conference presentation, claims executives William Paxman and Todd Reimer pointed out that, although MSA issues are increasingly complex, they tend to align plaintiff attorneys and defendants - a decidedly positive characteristic for the structured settlement industry which has struggled historically with plaintiff vs. defendant broker "issues".

The structured settlement and Medicare Secondary Payer communities of professional practice increasingly overlap and share complementary knowledge and clients. A more formal working relationship that encompasses their respective professional associations and addresses shared educational, marketing, legislative, and regulatory considerations would likely improve and further expand both communities.

MSP ACT AND MSA BACKGROUND

MSAs are administrative and funding mechanisms utilized in certain categories of settlements to protect Medicare's interests as "secondary payer" under the MSP statute. Enacted in 1980, the MSP Act requires certain insurers, including liability, automobile, no-fault and workers compensation insurers, to make payment first for services to Medicare beneficiaries regarding claimed injuries, with Medicare responsible only as a “secondary payer.”

The Centers for Medicare & Medicaid Services (CMS), the Federal agency responsible for administering Medicare policies, failed to take practical steps to enforce the MSP rules until 2001 when it issued the first of several policy memoranda addressing workers compensation (WC) MSAs. These policy memoranda created a format, checklists and procedures for seeking approval for WCMSAs to "protect Medicare's interests" when workers compensation cases are settled.

Several of these WCMSA policy memoranda address, directly or indirectly, structured settlement issues. One of these policy memoranda (dated October 15, 2004) addresses WCMSA present value calculations and provides an important pricing advantage for annuity funding compared with lump sum funding.

During 2013, CMS published both an 88 page WCMSA Reference Guide - since updated to Version 2.5. The Reference Guide's intended purpose is to help WCMSA professionals, beneficiaries and other stakeholders "understand CMS' [WCMSA] amount approval process and to serve as a reference for those electing to submit such proposals to CMS for approval." CMS has also published a WCMSA Self-Administration Toolkit to help self-administrators manage their WCMSA accounts appropriately. Both the Reference Guide and the Toolkit prominently feature structured settlements.

Although CMS and its field offices have also issued informal guidance about the use of MSAs in liability cases, nothing comparable exists to the CMS WCMSA memoranda, WCMSA Reference Guide or the WCMSA Self-Administration Toolkit. As a result, there currently is no consensus among tort practitioners as to whether and when MSAs are required in liability cases. Lack of CMS guidance has not prevented an increase in the number of liability MSAs, according to leading professional MSA administrators. Unlike WCMSAs, however, liability MSAs typically are not submitted to CMS for approval.

S2KM Reporting for Prior NAMSAP Conferences

• 2005 NAMSAP Annual Meeting
• 2008 NAMSAP Annual Meeting
• 2010 NAMSAP Annual Meeting
• 2014 NAMSAP Regional Meeting
  • Part 1
  • Part 2
• 2014 NAMSAP Annual Meeting
• 2015 NAMSAP Winter Regional Conference
• 2015 NAMSAP Annual Conference

S2P2J Release 60

The United States structured settlement market has been in existence for almost 40 years and continues to expand its scope, complexity and importance within the context of personal injury settlement planning.

Since it was first published in 1986, "Structured Settlements and Periodic Payment Judgments" (S2P2J), has provided structured settlement stakeholders with an authoritative reference guide, consisting of 16 chapters with extensive footnotes and Appendix documents, to help them understand issues and fashion settlements and judgments utilizing periodic payments. Both the National Structured Settlement Trade Association (NSSTA) and the Society of Settlement Planners (SSP) have utilized S2P2J as an educational resource for their certification programs.

Co-authored and updated semi-annually by Daniel W. Hindert, Joseph J. Dehner and Patrick J. Hindert, S2P2J now features an online version as well as the traditional hardcopy. Online S2P2J includes a search feature and download capability as well as link features to access individual book sections, appendices, footnotes, cases and statutes.

Publisher Law Journal Press anticipates a late September 2016 distribution date for hardcopy supplements for S2P2J Release 60 with online S2P2J subscribers receiving their update simultaneously with no additional subscription charge. Competent professionals confronted by structured settlement issues should have access to an up-to-date copy (or the online version) of this indispensable source book.

Release 60 Highlights - Release 60 will feature new, updated and/or expanded sections addressing the following structured settlement topics:

• History Chart - To help structured settlement and settlement planning stakeholders analyze the comprehensive changes impacting their professions, S2P2J inserted a History Chart into Chapter 1 several years ago, developed by Timothy Morbach and Patrick Hindert, which tracks legislative, regulatory, financial and market developments impacting structured settlements since 1975 and organizes these developments into three stages of industry development. Release 60 updates this History Chart.
• Primary Market Business Practices - Release 60 continues to update S2P2J's analysis of changes impacting primary market structured settlement business practices including public policy, guidelines for use, industry standards and product suitability.
• Secondary Market Business Practices - An update of Chapter 16 provides background coverage of the Consumer Financial Protection Bureau's civil investigation of J.G. Wentworth as well as historical context for recent Washington Post reporting about continuing abusive business practices by some factoring companies in Maryland which resulted in a civil lawsuit by the State of Maryland Office of Attorney General Consumer Protection Division.
• Taxation Examples - To increase clarity for various tax concepts, Professor Ken Milani, of the University of Notre Dame Mendoza College of Business, provides multiple case examples which have been added to Chapter 2 with this Release. In addition to his other teaching responsibilities, Professor Milani teaches the tax section of NSSTA's Certified Structured Settlement Consultant (CSSC) program which is hosted by the University of Notre Dame.
• Settlement Trusts - As structured settlements increasingly fund settlement trusts, structured settlement stakeholders require greater knowledge of such topics as the duties of settlement trustees under the Uniform Prudent Investors Act plus factors settlement trustees must consider when making investments. Release 60 addresses those topics in Chapter 3.
• NSSTA Surveys - Prior updates of S2P2J provided summary analyses of structured settlement marketing surveys of claims executives and claims professionals sponsored by NSSTA and conducted by CLM Advisors. Release 60 features analysis of Part 3 of NSSTA's three marketing surveys in Chapter 5 which examines how plaintiff attorneys view structured settlements and structured settlement consultants.
• Plaintiff Attorney Malpractice - Also in Chapter 5, Release 60 summarizes a 2015 California lawsuit against a plaintiff law firm (Mraz v. Lief, Cabraser) which, although the jury determined the plaintiff law firm did not breach its duty of care, warns of several potential malpractice dangers for plaintiff attorneys who are: 1) uninformed; 2) lack competent advisors; and/or 3) act carelessly; with regards to structured settlement issues.
• Product Suitability - Recent updates of S2P2J have expanded Section 6.02 which addresses "Settlement Consultant" issues. Release 60 expands prior discussion within this section about the topic of "product suitability" and how it impacts structured settlement and settlement planning professionals.
• Judicial Authority to Impose Structured Settlement - Release 60 features a recent New Jersey Superior Court case (Impink v. Reynes) in Chapter 7 that determined (despite conflicting authority in other states) that a motion judge's inherent parens patriae powers did not permit the judge to change the terms of a settlement to impose a structured settlement for a minor without consent of the parties.

Previous S2P2J releases have highlighted and addressed the following structured settlement developments and growth opportunities:

• Wrongful Convictions Tax Relief Act of 2015.
• Court decisions analyzing "safe harbor annuity rules under the Deficit Reduction Act of 2005 when annuities are used to preserve Medicaid eligibility.
• New cases where courts have identified questions to held judges determine whether proposed transfers of future payment rights meet the "best interest" test under various state Structured Settlement Protection Acts.
• Non-qualified assignment issues - including tax and security issues raised by off-shore assignment companies.
• Templates for: 1) approval of MSAs; and 2) disclosure of consultants' roles and compensation.
• Expanded coverage of Workers Compensation MSAs.
• Summary and discussion of recent PLR for indexed annuities and commutation riders.
• Summarized results of CLM Advisors surveys commissioned by NSSTA to determine the value claims executives and claims professionals place on structured settlements and structured settlement consultants.
• Introduction to ABLE Accounts.
• A new section to introduce and explain federal and international regulatory developments and entities resulting from the 2008 global financial crisis.
• Updated analysis of the changing role of and standards for plaintiff attorneys engaged in personal injury settlement planning and when negotiating structured settlements.
• Summary and analysis of recent U.S. Treasury Regulations for IRC 104(a)(2).
• Practice tips for minimizing the risk of an IRS settlement challenge.
• Updated summary of lessons learned from the Executive Life Insurance of New York (ELNY) insolvency.
• Periodic payment reinsurance as an alternative means of funding structured settlements.

For S2KM's most recent analysis of the structured settlement industry, see: "Structured Settlements 2015":

• Part 1 - Market Metrics
• Part 2 - Market Issues and Developments