Bentzen Funding Solutions

"The List"

John Darer is going to soon publish a list of brokers who for one reason or another did not participate in his initiative.  I have absolutely no issue with the brokers who joined; however, I find it absolutely outrageous to put those brokers that didn’t join on an alternate list just because they disagree with your idea, your tactics, or simply don’t want to be involved.  It reeks of intimidation.  Join me and my Holy Crusade, or suffer my wrath!  What is this, the Inquisition?  According to a recent letter, even NSSTA doesn’t endorse his initiative.  The simple truth is that non-participation indicates absolutely nothing about a broker except the fact that he exercised his right to not to be involved.  However, outsiders don’t know that.  They’re unaware of all the facts and arguments, let alone that many don’t want to be associated with the initiator of the list, even if they do agree with him.  Lists are inherently black and white, which makes them so dangerous to use without unbiased commentary.  I anticipate that Darer’s spin is going to be that the brokers on the signatory list are the pinnacle of ethics and integrity in the industry.  Therefore, to an uninformed outsider, the opposite must be true of members on the non-signatory list.  It’s a throwback to the McCarthy era - everyone running scared, not wanting to be labeled a pinko commie.  I believe it to be irresponsible and reprehensible to categorize your peers in such a manner.

John has his First Amendment rights but I ask you, would other professional associations (bar, accounting, engineering, medical, etc.) stand idly by and allow one of their members to publicly berate and ridicule other members, let alone put them on arbitrary lists?  Not likely!  These associations deal with issues and grievances internally, following specified protocols.  Everyone knows that one of the fundamental principles of professional conduct is to never disparage your peers in public.  It’s considered poor form.  I have met most that Darer chastises on his blog and all are professionals who do not merit public mockery, let alone for something as simple as a spelling mistake on a brochure.

It is truly a sad state of affairs when the structured settlement community and its vendors cower in fear of John Darer and his lists, not to mention the brutal reprisals that stem from the audacity of expressing an opinion, let alone a dissenting one.  I’ve talked to brokers who wanted to start a blog but didn’t out of fear that they’d be in my current position.  Others don’t write on certain topics or express an opinion for fear of being nuked in retaliation for having lobbed a firecracker. It’s fundamentally wrong!  He’s thwarting the free flow of ideas and civilized debate.  He is keenly aware that his targets (except Pat Hindert) don’t have the forum or site traffic to respond in kind to his articles and lists.  He even gloats every month about the number of hits his site gets.  I don’t know anyone who approves of his tactics but nobody wants to stand up and say anything, not that I blame them.  Who would want to be the next Bentzen, Hindert, Forge, Pressman, Upchurch, Meligan, Whitmore, etc.?  In essence, he is speaking for you without really having the mandate to do so.     

I welcome your feedback and would be pleased to publish your comments on this or any other topic.

A new tool for your tool box

By now we all know that Christi Fried no longer works at John Hancock, but where did she go?  Well, I am pleased to announce that after many years in the structured settlement business Christi has recognized a need in the marketplace and has created Continental Trust Services which provides MSA’s, SNT’s and Annuity testimony.  Here is Part 1 of my interview with her:

 1.     Why did you leave John Hancock?

For 15 years I worked for numerous life insurance companies and I learned how to create and administer products for the personal injury marketplace.  John Hancock hired me to create a structured settlements department and I accomplished that.  I felt it was a good time for me to create my own business and, at the same time, utilize my skills while filling a void in the market.  We need one-stop shopping for brokers to support their clients so, I started Continental Trust Services.

2.     What is Continental Trust Services?

Continental Trust is a company dedicated to servicing the needs of the structured settlement brokers.  Our primary focus is customer service.  We understand the issues involved in settlement and respect the expertise the broker adds to the process.  With so many parties involved in settlement, we commit ourselves to addressing each situation and offering unique solutions.  We provide a company for brokers to place their business because they know the calls will be answered, the answers will be correct, and their clients will be treated with respect and dignity. 

 

Let me give you a few examples.  One of our most popular services is Annuity Testimony.  We offer expert witness consultation to support the annuity product.  Second, Medicare Set-Aside and Special Needs Trusts are an important but; often forgotten product needed to protect government benefit programs.  We help brokers and their clients to provide the best package possible for each situation.  

3.     How does Annuity Testimony work?

Oftentimes a settlement requires the payment of services in the future.  These services include prescription drugs, doctor visits and equipment to support specific disability needs.  Once these needs have been defined in a life care plan, we calculate the present value for those costs.  That value can then be funded with an annuity detailing who to pay, how much and when.  The annuity guarantees a series of payments in exchange for a sum of money.  When consulting as an expert witness for Annuity Testimony, we author a detailed opinion addressing structured settlements, annuities in general and the life insurance companies that compete in the industry.  In addition, we calculate the present value of the individual life care plan detailing the value of each specific service required.

4.     Why would someone want an economist and an annuity expert?

Both professionals offer expertise that is critical to the evaluation of the case.  Economists enhance the life care plan with knowledge of life expectancy, inflation, and market indexes.  Annuity experts calculate the present value of the life care plan using pricing rates, duration and frequency.  We are independent professionals with knowledge of our respective markets but no incentive to sell those products.  We are not appointed by any life markets and use commonly accepted data to present our figures therefore; we are unbiased in our opinions.

5.     What is the present value of an annuity?

Present value is the value on a given date of a series of future payments, discounted to reflect the time value of money.

6.     What is the difference between the actual premium cost and the present value?

The actual premium cost uses an internal rate of return to quantify the time value of money.  This IRR includes charges an insurance company needs to operate, commission, a current yield curve, profit margin table and any additional fees.  Factors such as mortality and sex can change the price as well as market fluctuations.  Typically, actual premium costs expire within one business day to protect the interests of the issuing life market.  The present value of the same annuity is typically much more conservative.  The discount rate used is published by the IRS and updated monthly.

7.     What should people look for when hiring an annuity expert?

Experts should have education and experience in the life insurance marketplace.  Specifically, they should be current on pricing data, compliance issues and participants in the marketplace.  It is imperative that an expert be independent in their assessment with no monetary interest in the outcome of the settlement.

8.     Why are you qualified to do it?

My formal educational background is in economics and statistics.  I studied at Arizona State University and the University of Notre Dame, earning a Bachelor of Science degree, a Certificate of Quantitative Business Analysis and a Certified Structured Settlement Consultant designation.  For 15 years I was a leader at various life insurance companies coordinating the risk management (which includes annuity pricing and medical underwriting), contract administration (including compliance and legal issues) and distribution of structured settlement annuities.  My lectures and publications regarding substandard underwriting, annuity pricing, industry marketing and various topics in respect to federal and state regulation have been hosted by the National Structured Settlement Trade Association, the Society of Settlement Planners, and several brokerage firms.  I have dedicated my career on the issues affecting the personal injury marketplace.

9. Will you enjoy doing this type of work?

Yes, I enjoy working with the broker community and staying involved with the settlement of lawsuits.  You know, most people get up, go to work, and come home without much satisfaction in their day-to-day routine.  I feel very fortunate to know that my efforts have a direct impact on people and help educate them to make informed decisions.  Oftentimes the concepts of annuities get lost because we don’t put them in layman’s terms.  I like building the bridge between the legal and insurance marketplaces.

 

Christi can be reached by calling 617-981-2416

2nd Annual ASNP Conference

The 2nd Annual meeting of the Academy of Special Needs Planners (ASNP) was held in New Orleans last week.  I am very glad that I ended up attending this meeting as the educational format was phenomenal.  Patrick Hindert has a great summary of it on his blog.

In attendance were SNT attorney's as well as some members of the structured settlement community, namely, John McCullough, Patrick Hindert, Jack Meligan, Michele Whitmore and Joe Tombs.  David Cover from Peoples Bank and Ben Malsh from First Capital were also present as was Rich Halpern of The Halpern Group.

What came across to me loud and clear from attending this meeting is that the ASNP members are very eager to establish relationships with the right structured settlement consultants in their area.  One speaker actually advised the members "to seek out structured settlement consultants in your area and create working relationships with them".  They believe in structures but not over structuring.

The SSP managed to pick-up 18 new members from ASNP as a result of their presence and speaking at the conference.  I think this will be a very good symbiotic relationship for them both.

   

Settlement Planning Approach

When I was a structured settlement broker, my attorney clients would tell me repeatedly how much better I was than the other structured settlement brokers in my area.  “They” would only ever seem to quote a L/20 or TC20 giving very little thought or consideration to external factors that could possibly threaten existing finances or potential upcoming events, such as possible surgery, etc.   When I put structures together, I went through a thorough exploration of all income, potential income, government benefits, vehicles that may need to be purchased or replaced in the future, children’s education, upcoming potential medical bills, re-training costs and timeframes, and the list could go on and on.

When an annuitant comes to me now wanting to explore cashing out some of their structure, I take that same settlement planning approach to unwinding the structure as I did putting it together.  In a lot of circumstances the structure is the only form of income that the person has and it is brutally important to attempt to not only preserve as much of it as possible but to take many external factors into consideration as well.  It takes someone with that kind of experience and knowledge of the product to fully understand and be appropriate to handle the request.  Who would you want handling a complex trust or estate case, for example? Clearly you would want to know that the person has the background and knowledge to understand the nuances of the more complex cases and furthermore have an expert staff to take it to completion.

A price is just a price - one that any self-serving individual could claim to have the best of, especially when quoting it to someone who doesn’t truly understand the ins and outs of the business.  It’s what comes with that price that makes it all make sense in the end. 

Michael Upchurch purchase The Delta Group

The word is finally out – Michael Upchurch of Upchurch Financial has purchased The Delta Group from long-time industry expert and grand-daddy of the SS biz , Dave Snyder.   I, personally, am sad to see Snyder wrap up, as he’s been a very good friend to me for 18 years now.  If Dave was going to sell to anybody though, he couldn’t have made a better choice, as Michael is young, energetic and fresh with a ton of excellent ideas to make the new Delta Group a real force to be reckoned with.

A number of you have called me to ask, “Who is Michael Upchurch?”.  Michael is an accomplished structured settlement producer who resides in Jacksonville, Florida with his wife and 3 beautiful children.  He started in the structured settlement business with Ringler Associates, worked for a short time with Millennium Settlements and then finally showing his stuff with the National Settlement Consultants (the Goodman’s company).  Michael is committed to making a difference in the structured settlement industry and decided that the purchase of The Delta Group was the perfect way to help him accomplish that.

Given Michael’s superior knowledge of public benefits and the rumors that he’ll be creating some innovative new marketing products, I wouldn’t be surprised to report some very exciting news coming out of Upchurch and his new Delta Group company.  Stay tuned!  In the meantime, I know I speak for everyone when I say “we wish you nothing but good health, happiness and the perfect golf score Dave!! – enjoy it, you’ve earned it!”

Re-org at Prudential

Prudential sent out a letter today informing interested parties about its reorganization, stating that they are merging their Structured Settlement and Defined Benefit Annuity businesses into a combined Annuities organization.  Joe Barnet will be heading up Pru's Structured Settlement business with continued assistance from John Sciacchitano, Bob Florentine and Chris Allen.  Their bright star, Brian Ginty, however, is not staying on.  I know I speak for everybody when I say that we wish him well in whatever do decides to do.

Symetra solicitation

I have been telling brokers for a while now that annuitants receive solicitation letters from Symetra as well as from Allstate.  For those of you who didn't believe it, here is one from Symetra (Download symetra_letter.pdf ).

An annuitant called me just the other day claiming that he didn't even know that he could get funds out of his structure until Allstate starting sending him solicitation letters.  I requested a copy of that letter as well and will share it with you when I receive it.

   

468B trusts

Rob Woods was interviewed re 468B trusts on S2KM's podcast.  This was a very informative pod-cast and Rob provided his opinions and updates.  He mentions that congress states a 468B trust is for one or more plaintiff's, yet there is this continual controversy surrounding its use for the single plaintiff.  He also states that Treasury will be providing guidance on this and cautions structured settlement brokers to be careful about setting them (single plaintiff 468B trusts) up until we know more. 

   

RSP Update

After much anticipation, the first course for the Registered Settlement Planner (“RSP”) designation is open for registration with classes to begin on September 10.  The first course is entitled “Financial Planning and Law for Settlement Planners”.

The mission of the Registry is to train, educate and certify settlement planning professionals who are uniquely qualified to competently and ethically assist injury victims, claimants and attorneys in resolving their legal financial claims.  To further this mission the RSP Board will seek to promote recognition and awareness of the mark and to establish standards of competence and practice for the Registry.

I spoke with Joe Tombs, an adjunct professor at Texas Tech, who is head instructor for the RSP classes.  Here is a summary of what I learned from him:

·         Along with Joe, there will be many well respected professors teaching as well as two teaching assistants.

·         These are graduate level classes, they won’t be easy.

·         There will be only 2 courses required to sustain the learning portion of the RSP.  The 3^rd class will be to prepare a case study in settlement planning.

·         In order to use the designation of RSP, you obviously must pass the course material (blind marking) and case study, but you must also pass a minimum experience benchmark in the field of settlement planning and agree to the code of ethics. 

·         These courses will be done by distance education.  They will e-mail the syllabus, followed by audio tapes, slide shows.  There will also be deadlines and periodic tests.

·         The first course itself will be from Sept. 10, 2007 until Dec. 12, 2007.  The average person will likely spend about 10 hours per week, possibly less if they have a some relevant experience.

·         Cost is $1,250 per course plus the cost of books.  There will be an application fee of $1,000.  This fee helps defray the cost of reviewing candidates’ credentials, background, and comprehensive settlement plan.  It is also used to promote the mark and to assure that the RSP education requirement continues to meet the highest professional standards.

·         Classes capped at 30 people.

·         Any structured settlement broker can take the courses as well as other people who have a keen interest in furthering their settlement planning education.

Joe has worked tirelessly putting together the materials for this exciting new designation.  He feels that this will be the premier designation in the area of settlement planning within 10 years.  The comprehensive marketing planned by the SSP alone will make the RSP a “mark of distinction”.  The first class is filling up fast and starting soon!  Register today!

         

Download registered_settlement_planner_brochure_2.doc

Application.

      

SNT Co of interest

I am frequently asked who I know that can do SNT's and QSF's that won't complete with them in the structured settlement arena.  Well, I recently stumbled across this company that specializes in the design and implementation of special needs trusts.  Here is what they have to say:

The Trust Company of Sterne Agee is a privately owned, Alabama trust company that provides extensive support in the area of special needs trusts and fiduciary investment management for injured parties and their families.  Special needs trusts often work in tandem with structured settlements and allow clients to maximize public assistance programs, such as supplemental security income (SSI) and Medicaid.  Most special needs trusts are established by court order for settlement or judgment proceeds received on behalf of a disabled party.

Unlike other participants and banks that mention their willingness to administer special needs trusts, we specialize in the design and implementation of these programs, which promote independence and financial stability for life.  As a resource for plaintiff attorneys and settlement professionals, we have developed a network of qualified attorneys that dedicate their practice to special needs trust planning throughout the United States.

Special needs trusts must be administered pursuant to strict guidelines and standards, which often change and cannot be adequately maintained by family members.  The Trust Company continuously monitors the changes in related laws to ensure each case is administered properly.  This unique market niche has not been well serviced.  We have developed a strong reputation as a niche resource for these issues throughout the Southeast, and gladly provide a finder’s fee payment to anyone that brings me into a case that can be closed.  For more information, please contact Brent Thomas at 205-414-3356, or via email at bthomas@sterneagee.com.