Litigation

Is there a  life insurance company owned "used annuity" lot in your future?

Go ahead have a good laugh. Then put your thinking cap on!   

1. If annuity issuers could buy back payment rights in exchange for liquidity, would it not mitigate the risk of Chapter 7 bankruptcy of structured settlement servicing companies the need for which it  has been well established is primarily due to the lack of willingness of life insurers to split annuity payments when a seller is only factoring part of their structured settlement, annuity or lottery payment?
2. Would it not mitigate the mind numbing inconvenience, confusion and cost for annuitant-sellers who factor with more than one funding source to have to go to multiple sources  for administrative changes, most likely none of which is the insurance company that the annuity was placed originally with?
3. Would it not be better from a variety of standpoints, because:

• The insurer could control the inventory of its "used annuity lot" and the distribution channel as well as not suffer a break in its branding.
  A classic example of branding loss is the CT Woman story, where a large annuity was sold in August 2008 by a structured settlement broker to "the CT Woman"  Within a month the same structured settlement broker was in touch with Rhonda Bentzen to help facilitate a factoring deal. Bentzen pipelined the deal through cash now pushers, Structured Asset Funding, the deal requiring a servicing agreement because we understand the life company would not split payments. That this author has previously questioned the job done by the broker in considering the cash needs of the annuitant (she ultimately suffered a severe loss of capital on a safe investment) or the deal took 6 or so months to consummate, is now the side show to this story. The insurance company lost the branding opportunity with its annuitant and worse it got negative branding because of "factors" that could have been easily avoided.
• There would be little need for the insurer to spend the kind of loony advertising dollars that JG Wentworth and Peachtree do to get business AND THAT SAVINGS COULD BE PASSED ON to annuitants;

• by requiring insurance licenses of all of those in the distribution channel there is improved regulatory oversight. Think suitability and better qualified people handling peoples' questions. No more life impacting financial advice disseminated from call centers manned by those with  only a few week training program
• Economies of scale could be utilized in the technology area to enable agents to be able to easily identify and illustrate blends of primary and secondary market cash flows as well as other multi product solutions. More work for Navysis designing a new software package putatively named "Quote in and out of the box"
• One would also think that available capital is more plentiful for insurers than factoring company.