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As I sat watching the AIG crisis unfold yesterday, I immediately started to think about the many structured settlements (annuities) that I have recommended over the years to my clients.  Structures provide a great way to allow large sums of money to gain interest (tax free) for injured clients.

I'm starting this blog entry to serve as a clearing house for information for personal injury lawyers seeking information to inform their clients about any risks now associated with using a structure.  I should also say that there may not be any significant risk, but at this point I can't find any definitive source that has analyzed the risks and benefits of structures in the economic and insurance crisis we may be facing.

I'll be updating this link as I find sources of information.  If you have come here seeking information and have a helpful link, please post it in the comments section and we'll add to the data base.

11:09 AM September 16, 2008

Update:  11:35 am

Looks like some of the folks who broker structures are starting to jump on the vacuum of information for lawyers in this situation. John Darer at 4Structures has written an article this morning on the subject.  He also gave me a call to discuss this. LINK to STORY  John says, in part:

First, the AIG core insurance business (life, health, annuities) is not what has caused the impairment.  AIG is a leader in many lines of insurance worldwide.The company operates globally on multiple silo business model. The toxic assets are confined to a single business unit.

Insurers must set claims reserves and actuary certification of asset liability matching is required by New York and most other states.

At the time of this writing there has been no announcement of  bankruptcy, but please note that Insurance regulators work to protect the interest of structured settlement annuitants. There is precedent. In re: Monarch Life bankruptcy creditors were not able to get at the structured settlement assets, even in the absence of secured creditor protections common in today's structured settlements. Executive Life annuitants are still getting paid and that impairment happened in 1991.

UPDATE 1:52 pm

CNN hasa  pretty good Q&A on AIG and why it affects a lot of folks.  It is certainly a "don't panic" post, but seems to reflect the information posted above about how assets are held and also how Guarantee Associations can step in if the insurer fails.

CNN 5 Things you Need to Know About AIG

Q:  I have insurance through AIG. How worried should I be about the problems at the company?

At least in the short term, you probably don't need to be worried at all. The problems are with the AIG holding company, not the individual insurance company subsidiaries that you do business with, according to a source with New York State's insurance regulator.

Even if AIG's holding company is forced to file for bankruptcy court protection, there's a good chance that the subsidiaries will continue to operate normally with no disruption in claims payments. That has happened in the case of other insurance holding companies bankruptcies in the past, such as Conseco

UPDATE Sept 17, 2008 1:30 pm

Well, looks like I bought myself some AIG.  And so did you, and you and you.  We all own AIG now since the Federal Government now owns 80% of AIG.  They are calling it a "bridge loan" but every "bridge loan" I've ever heard of did not have the lender taking over the company.  And it looks like "we" have replaced the CEO of AIG with the former CEO of Allstate.  Yikes.

Anyhow, some updates on what to do with structured settlements.  My frined and structure expert, Brian Milner, worked his fingers to the bone yesterday putting together some documents to address the AIG Issues.  You can find them at    Millenium AIG Q&A   & Protection for AIG Customers

Bryan has included some really good infomation in there.  I also sent him a Q & A late last night that I think my clients will be asking me.  As soon as he gets all of it answered, I'll post the response.