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In a Ponzi scheme the last to invest get hosed.

On the other hand, with a legal purchase of in-force structured settlement annuity payment rights the original annuitant  who needs cash, who theoretically  has exhausted other financiang options, and therefore must sell structured settlement payment rights,  apparently makes out far worse than the following pack when the richly discounted payments are resold. Consider this diagram...

STEP 1

Tort Victim Annuitant A Needs Cash 

             I

             I

STEP 2

Sells Payment Rights to Factoring Company or Individual Investor

              I

              I

STEP 3

Factoring Company or Individual Investor sells the same structured settlement payment rights to Tort Victim Annuitant B, the tort victim Annuitant B's  trust, or to another investor

Under current law there appears to be nothing illegal about it. Upon information and belief some life insurance companies are buying securitizations of structured settlement payment rights for their portfolios. Moreover, upon information and belief there are some brokers and planners in the primary market that are already involved in the process described above,

One financial adviser told me today of an "Allstate deal" that for an investor willing to wait for two deferred lump, a $130,000 investment carries an 8% yield!

What advisers may be asking is...

What are standard structured settlements paying now? 

In viewing the agenda for the upcoming meetings of both the National Structured Settlements Trade Association and Society of Settlement Planners one wonders why the subject has not been addressed?

Is it simply time to blow the debate wide open and make it ethically acceptable to create structured settlements for compensation, broker the factoring deals for compensation and resell the sold payment rights to other tort victims for compensation?

Yes or No?

If yes, what are the standards of practice? Who sets those standards?

Readers of this blog post may also wish to read Market For "In Force" Structured Settlements In Full Swing. Who Wins?  March 12, 2010

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