Amid the crash of stocks over the last few weeks, which followed the collapse of the mortgage market and continued slide in real estate values, annuitants, claimants, lawyers and others are all asking the same question?
" Is my structured settlement safe given the scary news and rumors coming out of Wall Street and the mainstream press and media?"
In this weeks special edition of Speaking of Settlements, host Mark Wahlstrom was joined in studio by a special guest, Jack Meligan the President of Settlement Professionals Inc, one of the nations largest structured settlement firms dedicated to working primarily with plaintiff attorneys and claimants. In the midst of the biggest one day decline, Mark and Jack discussed the following:
1. In spite of all that has gone on in the last year and last few weeks, virtually every structured settlement payment and check scheduled for beneficiaries and annuitants has gone out as promised and been made as scheduled. The record of steady, guaranteed payment by the life insurance companies that fund structured settlements is nothing short of amazing when put in contrast to the alternative choices of money market funds, bonds that fail, stocks that crash and real estate that loses value by the day.
2. The regulatory structure and safety net of insurance regulation created by the state regulators has worked as designed and continues to work as planned. The failures of large insurance companies in the past decades were the test lab that was used to build the current system, and while no one lost benefits in those prior liquidations either, thanks to the state regulators and companies that stepped up, the lessons learned from that event have largely insulated policyholders from the market risk that the insurance stocks might be having with their stock values due to fears about the economy.
3. People should not get alarmed about companies in the insurance business raising cash, such as Met Life did, or partnering with other powerful companies such as Hartford did with Allianz. Even the news that companies such as Prudential or Hartford are adding to reserves shouldn't be taken as bad news but GOOD news, as it shows how the regulatory and statutory requirements put into law are forcing them to put aside even more money to protect policyholders. The statutory reserve and accounting requirements are there to protect policy holders, even at the expense of stock holders and that is what makes life insurance companies so unique.
There is more in the video, which I encourage you to watch and share with clients, but the big issue that I as the host of the channel and near 30 year veteran of our industry wish to convey.
That is that we are about to witness the golden age of structured settlements as we emerge from this crisis.
As we get through this current panic and the life insurance markets hold strong and make their payments, it will become abundantly clear to trial lawyers, plaintiffs and others that the single, simple choice they made to put their money in a structure to protect their income and family was the ONE choice they made that kept it's promise. Couple that with the certainty of higher income taxes in the next few years and higher interest rates and we in the structured settlement industry will have the highest yielding, most tax advantaged and demonstrably secure place for personal injury victims and attorneys to place their money.
If that's not the golden age and an opportunity for growth, I don't know what is.
Now get out there, get educated on the solvency and stability of your clients annuity contracts and get on the phone with scared attorneys and claimants and show them what we have to offer. This crisis, while horrible for stock prices and real estate, has become the foundational proof for the message we have tried to hammer home for decades, that injured people NEED the safety and certainty of a structure.