Structured SettlementsFebruary 25, 2019by Patrick Hindert2019 Payee Protection Policy Annual Report

2019 Payee Protection Policy Annual Report

Independent Life developed and launched the first Payee Protection Policy in the structured settlement industry on February 24, 2019 with the mission of protecting payees from any and all proposed transfer petitions we view as unfair to our payees.

As part of that Policy, when a petition is filed to sell a payee’s payment rights we take the extra steps to re-engage the professionals that established the payment plan to help the payee either secure their payment rights or weigh in on the wisdom of changing it.

Every year, thousands of structured settlement payees participate in 5891 transactions, transferring payment rights to factoring companies. These companies use highly persuasive marketing tactics to lead payees, who are often no longer represented by professional advisors, to transfer payments to themselves, often offering inadequate compensation. Generally, the structured settlement professionals, settlement planners and attorneys, who participated in the settlement, are not even aware of the impending 5891 transfers. So, this team of professionals, who collectively advised the payee on the original payout plan, is unable to assist the payee in finding a reasonable alternative or at least in making an educated decision. The life insurance companies continue making payments (to a different payee assuming a transfer occurs), but the original payee’s payment plan is never really secure when structured settlement payment rights can so easily be transferred to a third-party.

Independent Life’s Payee Protection Policy contains six Covenants – one of which promises that “[a]t least once a year, Independent Life will publish a report outlining the number of 5891 transfer petitions, orders approving and denying, and appeals affecting Independent Life contracts.” As such, we are pleased to publish our first annual report which can be accessed by visiting our 5891 Updates Page.

As stated in our Payee Protection Policy, Independent Life is committed to fighting back against unfair pricing and predatory business practicing which sometimes occur with these proposed transfers. It is our hope other structured settlement annuity providers will follow our lead and adopt or implement their own Payee Protection Policies.

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