Structured Settlements

Scenario - Defense Case

Working on the defense side is preferable. It generally means that you are positioned to participate in the structure, regardless of plaintiff brokers who may come into the picture later. Building a client base of defense attorneys and insurance companies makes good business sense.

The most successful cases involve the structure broker as more of a neutral third party. If the defense is comfortable with us providing direct service to the plaintiff, it can help alleviate the naturally adversarial relationship. It may also prevent the plaintiff attorney from feeling the need to involve another broker.

Assumptions:

• You get a call from a local claims adjuster who has a recently opened file involving a child that was hit by a car.
• This is an 8 year old child with minimal future care needs.

Realizing that a recently opened file is usually a long way from settlement, you can still do several things.

Refer to scenario intro for additional information pertaining to each phase of settlement.

Preliminary Filework

1. Get the file particulars such as the name of the claimant, insurance company, claim number, attorney names, and amount of demand if any.

2. Try to get a feel for the activity that has transpired on the case so far. When the call comes in, the case can be anywhere from "the claim was just filed" to "can you be at the courthouse in one hour?"

2. Assuming that our sample scenario falls under the former, you should send an introductory letter and, if you feel it is warranted, perhaps one preliminary quote. You do not want to overwhelm at this stage. What you want to do is get something with your name, the SSI name and logo, and your number in the claim file. Adjusters are notoriously busy with paperwork and you do not want to increase their load unnecessarily. There is a fine line between service and overkill.

3. As the weeks (and months, sometimes years) go by, you can make an occasional phone call to check the status of the claim. You will get a feel for the response to your efforts and be able to gauge whether or not the adjuster welcomes these calls. Periodically offering your services on any other cases that might benefit.

Active Quoting Phase

Okay, the day finally arrives when everyone is ready to talk settlement. The adjuster wants to see proposals at $150,000 and $200,000. Aside from that there isn't much input, so you will have to take it from there. Remember, this is a case involving a minor.

Some important questions to ask at this point: If the adjuster does not know this information, it would be beneficial to speak directly to the plaintiff attorney. If that is not an option, we will work around it.

• What are the ongoing physical needs of the claimant?
• Is there a reduced life expectancy?
• Does the amount of the offer include the entire settlement? (do we need to adjust for attorney fees and cash)
• Does a college fund make sense?
• Many times, adjusters and plaintiff attorneys aren't sure what they want until they see what they don't want. That is why it doesn't make sense to inundate everyone with proposals at this early stage. Unless specifically requested, one or two proposals at each offer level should suffice.

The active quoting phase can get extremely hectic, or months can go by between quote requests. As negotiations heat up and cool off, we are always ready to respond.

Settlement Phase

The day we have all been waiting for finally arrives. You receive a call that one of your settlement proposals has been accepted. However, the plaintiff attorney would like to see the $200,000 proposal with the monthly income starting out lower and increaseing at 3% per year. The adjuster will look to you for direction.

Do not let this phone call end without either confirming that the quote is still valid, or notifying them that it may not be valid and you will get back to them with a current quote!

This is where the level of service option comes into play. Unless you have a burning desire to be a middleman, your job is done for a while on this case. In time you will feel comfortable everything is being taken care of and you can use this time to sell the next case. You will, however, be kept in the loop by copies of all correspondence and case status reports.

The rates have just changed, but we requote with the old rates and find out that the defense is willing to expedite the check.

What happens at this point is confirmation. We need to be put in touch with the party responsible for funding. You will find that all parties involved in a settlement want to only do what they have to and no more. Confirmation letters will be sent to the adjuster, defense attorney and plaintiff attorney. These letters give specific information confirming the chosen settlement option. The adjuster will receive payment instructions, the defense attorney a sample settlement agreement, and the plaintiff attorney sample documents and a request to include appropriate language in the court order. By this phase we should have names, addresses, phone and fax numbers of all parties. If not, get them to us ASAP. When the final settlement agreement is ready, the assignment agreement will be included in the document package.

Time is critical at this stage. This case worked out well because the defense was willing to send the premium check in quickly. As a general rule, rates are only valid for seven days and the question of a lock-in may come up. It is imperative that all parties understand the time-sensitive nature of structures. Not only for rates, but the general 60 day rule for assignments as well.