1. What is the Structured Settlement Primary Market?

• Most of the individual participants in the primary market will hold insurance licenses where they solicit and place new business. Some may also hold securities licenses.

• Prospective patrons of those in the primary structured settlement market can easily verify whether or not they are licensed online.

• The primary market for structured settlements is a highly regulated market place where market conduct regulation is primarily enforced by the states. Regulators have the authority to fine , suspend or revoke licenses. Consumers have a place to seek redress.

• Many of the participants in the primary market are members of the National Structured Settlements Trade Association and/or the Society of Settlement Planners.

• Unfortunately there is no regulation of market conduct in the structured settlement secondary market and the lack of a moral compass has fostered wide scale corruption and fraud where uninformed annuitants, often Black and Hispanic minorities, young adults and the elderly are being victimized for tens of thousands, hundreds of thousands and in some cases millions of dollars meant for long term financial security. Some of those cases have made the front page of the Washington Post and grabbed the attention of Maryland Congressman Elijah Cummings and the Maryland Attorney General, but others have slipped through the cracks.

• Particularly troubling is the rag tag collection of LLCs which makes it very difficult for consumers to know who they are dealing with. One secondary market participant, backed by The Blackstone group even established a bounty fund and refers to the rag tag bunch as parasites. To its credit the National Association of Settlement Purchasers (NASP), has tried to limit the number of alternate names of its members as part of its code of conduct. Unfortunately a significant population of the morally adrift secondary market participants are not members of NASP.

• Many of these companies generate a landfill of inaccurate and sometimes illiterate information waste about structured settlements, having employed or contracted some of the laziest, incompetent researchers and writers.

• At least one primary market agency has indicated to one of my sources that it is originating structured settlement factoring deals. A copy of that email admission was published on my Structured Settlements 4Real blog in November 2018.

• The larger secondary market companies package together the acquired factored payment streams into securitizations where they are sold to other financial institutions, or, particularly with smaller shops such payments are sold through the tertiary market.

Unfortunately many of these companies deceive investors about what they are buying, by deceptively calling factored structured settlement payment streams annuities, when they are not annuities. In December 2018, the National Association of Insurance Commissioners, in its Statutory Issue Paper160, opined that that factored structured settlement payments streams are neither annuities nor insurance products.
There are only a few companies that are in the space and most of their principals have insurance licenses. They should know better, but they have intentionally misled investors for years that these structured settlement derivatives are annuities.. Sadly there have been some victims like Robert and Linda Wall, a retired Pittsburgh couple who thought they were buying structured settlement annuities. Their own adviser believed they were too according to his deposition. They were victims of a fraud in the origination and as the result of an unfavorable April 30, 2019 summary judgment ruling , stand to lose their entire $152,999 investment. In addition they have incurred tens of thousands of dollars in legal fees.