Structured settlements haven’t been around forever. In their present form, they are a relatively new addition to the world of torts. Jim Early, newly-installed president of the National Structured Settlements Trade Association (NSSTA) and Senior Advisor to Ringler Associates, explains the development of structured settlements and discusses what the future may hold in this report.
Early explains that the structured settlement, in its present form, comes from the settlement of Thalidomide cases in the United Kingdom. Thalidomide was given to pregnant mothers, and many gave birth to children with serious birth defects. Today, structured settlements are routinely used “to protect injured parties from premature dissipation of settlement funds.”
As to the future, Early says that the primary challenge for NSTTA is to protect the sections of the Internal Revenue Code that apply to structured settlements, especially §§104 and 130. One thing that helps, Early explains, is that the NSSTA has no political enemies on the left or on the right. There is a structured settlement caucus in Congress with members from both sides of the aisle who all see the value of structured settlements. The only real danger Early sees is that sweeping tax reform could sweep up §§104 and 130 for change.
As to a challenge for the future, Early says that NSSTA members “need to become settlement planners rather than annuity brokers.” Now more than ever, there are a host of factors that must be considered in planning the best settlement for an injured victim. For example, a settlement might require a special needs trust. All of the relevant factors need to be considered.
Another challenge for NSSTA members will be to protect injury victims from abuses in factoring (the purchase of a structured settlement payment stream for a lump sum that may be dissipated improvidently). Early points out that there are now structured settlement protection acts in forty-nine states.
The toughest challenge for the NSSTA will be to deal with an aging structured settlement work force. Early says that it is important to attract some younger people into the structured settlement profession.
Early believes that the future is bright for the structured settlement profession. Early is pleased that all participants in the process are now encouraged to have someone participate on their behalf to bring increased professionalism to the process. Also, the emphasis is increasingly on preserving capital and avoiding risk in planning the investments of the settlement proceeds. Structured settlement professionals “bring certainty and security to the process.”
Early says that dealing with his duties with NSSTA is not a challenge because he is now in an advisory capacity with Ringler Associates. He looks forward to working on the challenges ahead.
James M. Early is a Senior Advisor to Ringler Associates, assisting in strategic business partnerships and collaborating with Ringler’s 150-plus Consultants nationwide. He is also the President of the National Structured Settlement Trade Association (NSSTA). He has been with Ringler since January 2002. He has spent more than 40 years in insurance and settlement planning, providing structures in thousands of cases since 1985. The Settlement Channel is a featured network of Sequence Media Group.