Who is the structured settlement watchdog?

 

John Darer is the Structured Settlement Watchdog® John Darer®, is an experienced AM Best Recommended Structured Settlement Expert, Master Structured Settlement Consultant, Certified Financial Transitionist and Registered Settlement Planner who has voluntarily served as the industry watchdog since 2005 when he created the Structured Settlements 4Real® blog, a leading source of structured settlement information and news and expert opinion, including settlement planning issues/ ideas and alternative deferred payment solutions.  John Darer's Structured Settlement Watchdog commentary informs on bad business conduct in the structured settlement secondary market, provides relevant information that may be helpful to attorneys, plaintiffs, defendants, claims adjusters, judges, investigative reporters in local and national news media, sellers and buyers of structured settlement payment rights, law makers, law enforcement, attorneys general, the Consumer Financial Protection Bureau (CFPB), the FTC, consumer and disability advocate groups and interested others. The content is informative, irreverent and effective with over 1.28 million page views.

CLEAR THE PATH FOR LEGITIMATE STRUCTURED SETTLEMENT INFORMATION

via critical commentary/education

PRO BONO MISSION OF THE WATCHDOG

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     STRUCTURED SETTLEMENT WATCHDOG®


WHY IS THERE A STRUCTURED SETTLEMENT WATCHDOG?

RAISE AND MAINTAIN AWARENESS OF BAD BUSINESS PRACTICES

Critical topics need to be addressed:  The Good, The Bad and The Ugly

GIVE STRUCTURED SETTLEMENT CONSUMERS A VOICE IN THE ABSENCE OF a regulaTOR

Legitimate stories need to be heard

Unlike any other financial marketplace in the United States, the structured settlement secondary market segment is not subject to licensing and many companies paying cash now for structured settlement payments are soliciting business from citizens of states where they are not even registered to do business.


To compound that, some of these structured settlement factoring companies and their agents are inducing people to commit fraud on the courts, so the factoring companies can make massive profits at the expense of their victims. Some structured settlement secondary market companies have even committed fraud themselves.


Public records show that people with felony records and bans from other financial regulatory organizations participate and/or have participated in the structured settlements secondary market. Unfortunately a huge gap in regulation fails to protect how consumers and investors can be solicited.  What regulation there is, is not consistently effective enough and weaknesses are exploited to the detriment of American consumers.  As things stood in January  2024, with the exception of Maryland, Georgia, Louisiana, MInnesota and South Carolina (the latter 2 sprung into action after blistering exposure in mainstream media by the Minneapolis Star Tribune and McClatchy respectively) recently required structured settlement transferee registration. There is inexplicably, no regulatory body that consumers, investors in structured settlement payment rights, or participants in the structured settlements secondary market can easily turn to if they wish to address questionable business conduct by companies in the structured settlement secondary market.


So the Structured Settlement Watchdog® writes/barks about it. With respect to raising awareness, the blog Structured Settlements 4Real® is a success, and is ranked among with top websites in the structured settlement industry. Read some of our testimonials.

  • ​​​Help root out and correct inaccuracy in social media and other online media related to structured settlements, wherever it exists.
  1. Help curtail the ongoing wholly misleading and fraudulent practice of misrepresentation to investors of factored structured settlement payment rights that such receivables are "annuities", "secondary market annuities", or referenced through snappy but misleading acronyms such as SMA, SMAP, and SMIA and bogus claims like  "unparalleled financial safety", by salespeople and their companies, including some settlement planners and financial planners who have insurance or securities licenseswho should know better 
  2. In 2017, in the matter of Greenwald v Caballero-Goehringer M.D. et al,  a Delaware judge dismissed an attempt to portray a Genex Capital Receivables Purchase Agreement as a structured settlement annuity in a medical malpractice case involving a minor. 
  3. ​The National Association of Insurance Commissioners  (NAIC) implicitly stated in Statutory Issue Paper 160 (finalized April 6, 2019), that factored structured settlement payments are neither an annuity or an insurance product. 
  4. Patrick Hindert, the co-author of what is widely regarded as the seminal industry text Structured Settlements and Periodic Payment Judgments, wrote in September 2020 that these "are neither annuities nor structured settlements". 
  5.  In its answer to Plaintiffs' First Amended Complaint and Counterclaims in ongoing Arizona litigation, dated June 11, 2021, Genex Capital Corporation admitted, in answering paragraph 31, that "one component of its business involves purchasing from payees future structured settlement payments due under structured settlement annuities and assigning to investors a subset of those rights..."  (Emphasis added) ( also multiple other references to "subsets of those rights. Source: Genex Capital Corporation, a Delaware Corporation  v Seeley Capital Management, Inc., a Massachusetts corporation; et al and Related Counterclaim  Richard L. Keefer and Vicki L. Keefer, husband and wife; et al; v Genex Capital Corporation, a Delaware Corporation; et al and Genex Capital Corporation, a  Delaware Corporation, a  Delaware Corporation v Richard L. Keefer and Vicki L. Keefer, husband and wife, Hunmi Pak, a married man; E. Dwayne Walls, a married man; and PANABCO, a partnership  Arizona Superior Court County of Maricopa Case Nos. CV 2020-013796 and CV2020-004958 (Consolidated)  [the pleadings are a matter of public record].
  6. Subsequent documents in a related cases in TX also refers to a Receivables Purchase Agreement,  the purchase of receivables as opposed to an annuity and subsets of the receivables, where the buyer has elected not to take a direct assignment as opposed to a serviced payment.  [ see In Re: Juan Oltivero Cause No. B9545-1211 In the District Court of Castro County, Texas, 242nd Judicial District Genex Capital Corporation First Amended Cross Claim and Second Supplemental Petition Against Third Party Defendants Stratcap Investments, Inc., David Meyerowitz and Douglas M. Evans and Intervenor New England Annuity Associates, LLC  filed October 4, 2023, alleged "Meyerowitz and Stratcap followed Genex’s instructions at that time. Meyerowitz caused Stratcap to process the transfer and obtain an Order entered by the Supreme Court of Onondaga County, New York on or about November 30, 2010 approving the Curtis Transfer (“New York Order”). Immediately thereafter, Stratcap signed all of its rights to Genex, as it (Stratcap) had been instructed by Genex to do. 19. On December 8, 2010 Genex then assigned a subset of limited payment rights to Mr. Leonard as facilitated by Seeley Bulbrook in accordance with, governed by and subject to a Genex Receivable Purchase Agreement (hereinafter “Genex RPA”). This was the custom and practice for all dealings....".] Bold added for emphasis. 
  7. Additional references to receivables appear in Morningstar DBRS, Inc. "(DBRS) confirmed the ratings of seven securities issued by six asset-backed security transactions secured by structured settlement receivables. The performance trends of the securities are such that credit enhancement levels are sufficient to cover DBRS’s loss expectations at their current rating levels.
    The transactions reviewed were:
    -- NYLIMAC 2010-SS-1, LLC, Series 2010-1;
    -- Novation Receivables Funding LLC, Series 2010-A;
    -- SuttonPark Structured Settlements 2011-1 LLC;
    -- SuttonPark Structured Settlements 2012-1 LLC;
    -- Novation Ventures 2013-A Structured Settlement Notes; and
    -- NV Funding LLC, Series 2014-A Fixed Rate Asset Backed Notes  
  8. The definition of annuity under many state insurance laws runs counter to the representations made by those who market structured settlement receivables to investors as annuities. Buyer beware!
  9. Acquired structured settlement payment rights in factored structured settlement receivables are excluded from statutory protections under the laws of majority of US states.The 2017 Revisions to the  Life & Health Guaranty Associations Model Act (#520), which have been adopted by 40 states, expressly exclude such investments from state insurance guaranty fund protection.Investors should bear in mind that adoption of changes in the Model Act have been retroactive, as expressly provided in the Model Act!  There is no equivalency in status for investors in receivables, to people who have actually bought annuities from an insurance company, or are receiving structured settlement established as part of the consideration for their compromise of their claims for damages. So you're not immunized if you bought structured settlement payment rights before your state adopted  (or in the future adopts) the 2017 revisions.
  • Encourage the disclosure of transaction risk that has been absent in the sales pitches and/or materials of many of the salespeople placing the factored receivables, which unfortunately has even included certain settlement planners. The documented case history of investment loss can not be written off. 
  • Make sure that consumers aware of the possible lack of errors/omissions or professional malpractice insurance coverage, or possible policy exclusions for advice to buy assigned payment streams in the secondary or tertiary market. One of the formerly leading tertiary market actors, SMA Hub is kaput.after some very exotic deals and is no longer in business after investors lost money. 
  • Root out and expose misrepresentation and fraud in the structured settlement secondary and tertiary markets.
  • Expose the use of fake testimonials by members of the structured settlement secondary market
  • Encourage potential informants and other commentators who expose,  or help to expose bad business practices, with the goal to improve the greater structured settlement industry for  consumers and all stakeholders
  • Encourage individuals (ether annuitants, brokers or structured settlement factoring insiders) with knowledge of bad practices, to come forward to provide information that will lead, if applicable, to the criminal prosecution of the most serious offenders whether in the United States, or elsewhere. An international structured settlement ''neighborhood watch" if you will 
  • Encourage the establishment and maintenance of higher standards for Independent Professional Advice (Structured Settlement IPA) under state structured settlement protection acts and support state laws that establish a requirement for an independent guardian for such transactions.
  • Seek resolution for structured settlement annuitants and help preserve the integrity of the industry by reporting instances where a structured settlement protection act's "best interest standard" has been inadequately enforced
  • Encourage legislators to establish critical licensing and/or registration and oversight for the structured settlements secondary market, so that individuals with criminal records are not allowed to be put in positions of trust involving money consistent with securities and insurance regulations
  • As a deterrent to abuse, encourage the universal adoption of a law, similar to that in effect in California, that requires the attorney of record to be notified if a structured settlement annuitant is selling structured settlement payments within 5 years of establishment of the structured settlement.


Last updated January 9, 2024