CFPB Files Suit Against Access Funding


The Consumer Financial Protection Bureau (CFPB) has filed suit in federal court in Baltimore accusing Access Funding of violations of the federal Consumer Protection Act.  Access Funding (now Reliance Funding) is a purchaser of structured settlement payment streams whose alleged predatory business practices involving people who had been poisoned by lead paint as children were exposed by investigative reporter Terrence McCoy of The Washington Post last summer.  Rep. Louise M. Slaughter (D-NY); Rep. Elijah E. Cummings (D-Md); Sen. Ben Cardin (D-Md); Sen. Barbara A. Mikulski (D-Md) and Sen. Edward J. Markey (D-Mass) all praised the CFPB effort to protect consumers who may have been victims of financial fraud by companies in the structured settlement industry.

This federal lawsuit follows on the heels of a similar lawsuit filed by Maryland Attorney General Brian Frosh in May, 2016.  The state court action filed by Attorney General Frosh is pending in Baltimore City Circuit Court. Frosh has pledged to work to “prevent vulnerable Marylanders from having their money taken from them through illegal practices.”

Litigation follows close behind cost of insurance increases


Over the past few years a number of life insurers have raised annual cost of insurance charges (COI) in ways that many consumers once thought impossible.  For the most part, COI increases have targeted flexible premium universal life policies – the kind of life insurance policies that the insurance industry marketed as retirement savings vehicles.  Now, it turns out that flexible premiums are not so flexible after all.  Life insurance companies such as AXA, Voya Financial, Tranamerica, and William Penn/Banner have increased COI charges on universal life policies by as much as 200% sending shock waves through retirement communities across the nation and irking the life settlement industry, the secondary market purchasers of life insurance policies.

While the insurance companies point to contractual provisions in their policies permitting these increases as a justification for the hefty premium increases, more scrutiny is required and will inevitably follow.  Some of the recent lawsuits allege discrimination; others highlight the insurance industries infatuation with “shadow insurance” – a sneaky way for insurers to hold fewer assets in reserve by transferring liabilities to wholly owned captive insurers located in “regulation light” jurisdiction.

If you own a universal life policy and were suddenly hit with an unreasonably large premium increase contact us at (203) 504-8425 or via email at  We may be able to help.

Revised Tennessee Structured Settlement Protection Act

Earlier this year Tennessee joined the many states revising their Structured Settlement Protection Acts to provide more robust protections to those people seeking to sell some of their periodic payments to factoring companies.  Under the Tennessee Structured Settlement Protection Act, the seller is called the “payee” and the factoring company is known as a “transferee”.  The revised Tennessee statute requires that the transfer petitions be brought in the county in which the payee resides.  It also requires that the payee personally appear at the hearing, unless excused for good cause.  The payee must also submit a sworn statement detailing any prior “requested, proposed, or approved transfers”.   Tennessee Senate Bill No. 760 was signed into law by Tennessee Governor Bill Haslam on April 14, 2016.

United Technologies Corp. Announces Pension De-risking

The pension de-risking trend continues. Farmington, Connecticut based United Technologies Corp. (UTC) will transfer $775 million of its outstanding pension benefit obligations under two of its retirement plans to The Prudential Insurance Company of America., a publication of The Hartford Business Journal quoted Robin Diamonte, UTC’s chief investment officer as saying “This transaction is an important part of United Technologies’ long-term strategy to reduce future pension risk and expense”.  UTC also offered certain retirees an option to take a one-time lump sum distribution. UTC expects approximately 10,000 retirees to accept the lump sum distribution. By year end, UTC will have reduced its pension obligations by approximately $995 million.

Thanks to the efforts of and Edward Stone Law, special counsel to the retiree advocacy group, UTC’s Connecticut based retirees do not have to worry that their annuity payments will be subject to creditors’ claims. and Edward Stone Law worked tirelessly with Connecticut legislators to enact Public Act 15-167 which went into effect on October 1, 2015 provides creditor protections to retirees impacted by pension de-risking transfers.  The ground breaking Connecticut law is the result of bipartisan legislation sponsored by Rep. Robert Megna (D-97), Rep. Livvy R. Foren (R-149), Louis P. Esposito, Jr. (D-116) and Sen. Henri Martin (R-31).  Connecticut was the first state in the nation to pass legislation protecting retirees in pension de-risking transfers.

Maryland’s New Structured Settlement Transfer Laws


Maryland Senate Bill 734, which amends the procedures for structured settlement transfers took effect on October 1, 2016.   Senate Bill 734 requires that factoring companies register with the Maryland Attorney General before filing transfer petitions or applications within the State of Maryland. The bill further requires that factoring companies (known as transferees under the structured settlement protection statute) post a surety bond before doing business in Maryland.   In an effort to prevent “judge shopping” or “forum shopping” the new  law also requires that all transfer petitions be filed in the county in which the payee lives.  In September, Maryland Attorney General Brian Frosh announced that his office was accepting registrations under the new law.  If a factoring company is not registered with the OAG (Office of Attorney General) the factoring company may not file a transfer petition in Maryland.  This new legislation came on the heels of investigative journalist Terrence McCoy’s article in The Washington Post (“How companies make millions off lead-poisoned, poor blacks”) on the predatory business practices of many structured settlement factoring companies. Attorney General Frosh’s suit against Access Funding, LLC and other structured settlement factoring companies filed on May 10, 2016 is pending in the Circuit Court for Baltimore City. Maryland’s new Structured Settlement Protection Act is among the most comprehensive of the 49 state structured settlement protection acts.

PPG Industries Enters the Pension De-risking Arena


PPG Industries, a Fortune 200 global manufacturer of paints, coatings and optical products has entered into agreements with Metropolitan Life Insurance Company and Massachusetts Mutual Life Insurance Company to provide annuity benefits to 13,400 retirees removed from PPG’s defined benefit pension plans.  In what appear to be  annuity “lift-out’s” PPG has purchased group annuity contracts from MetLife and MassMutual to cover pension obligations of approximately $1.6 billion.  These pension de-risking transfers involve both salaried and non-union hourly employees. Annuity “lift-out’s” occur when a defined benefit plan sponsor amends its defined benefit plan (a “settlor” or administrative decision, not a fiduciary decision), does not terminate the defined benefit plan, but rather moves selected employees or retirees out of the defined benefit plan. De-risked plan participants become “certificate holders” under a group annuity contract they do not own.  These retirees lose all of the uniform benefits intended by Congress under ERISA and become subject to non-uniform state laws.  We expect to see many similar pension de-risking transactions in 2016. One of our clients, is actively working to protect retirees’ rights in pension de-risking transactions.  For more information, please contact us at (203) 504-8425 or

Revised Florida Structured Settlement Protection Act


In March, 2016 the Florida legislature passed a bill revising the Florida Structured Settlement Protection Act § 626.99296 et seq., adding new requirements designed to protect individuals selling their structured settlement payments in the secondary market.  The revised Act requires that (1) transfer petitions be filed in the county where the payee resides; (2) all payees attend the hearing on the transfer petition (unless the court determines that good cause exists to excuse the payee from attending); (3) the transfer petition include a summary of all transfers by the payee to the transferee (or an affiliate of the transferee ) filed within the four years preceding the date of the transfer agreement; (4) the transfer petition include a summary of all transfers by the payee to any person or entity other than the current transferee within the three years preceding the date of the transfer agreement, if actually known to the transferee or disclosed by the payee; (5) the transfer petition include a summary of any proposed transfers by the payee to the transferee that were denied within the two years preceding the date of the transfer agreement; and (6) the transfer petition include a summary of any other proposed transfers that were denied, if known by the transferee or disclosed by the payee.  These revisions are definitely steps in the right direction and go a long way towards supplying a Florida Circuit Court with information necessary to make a determination that a transfer is in the payee’s “best interest.”

However, the revised statute allows the court to hear an application for a transfer even if the settlement agreement prohibits the transfer of payment rights.  This means that no matter how hard a personal injury lawyer may work to protect his/her client from the secondary market, the carefully crafted structured settlement designed to protect an injury victim for an entire lifetime can be undone with the stroke of a pen.  Without a doubt, this leaves vulnerable settlement victims at the mercy of unscrupulous factoring companies and their high pressure sales tactics.

These revisions to the Florida Structured Settlement Protection Act § 626.99296 et seq., are effective as of July 1, 2016.

Public Hearing on pension derisking legislation in Connecticut

On Thursday, March 3, 2016 the Insurance and Real Estate Committee of the Connecticut General Assembly will hold a public hearing on proposed legislation regarding protections for retirees in pension derisking transfers.  The hearing will be held at 1:00 p.m. in the Legislative Office Building at 300 Capitol Avenue, Hartford, CT 06106.  The full text of the proposed bill, Raised H.B. No. 5445 can be found here.  This proposed bill provides much needed disclosures to employees and retirees and limits subsequent transfers of such annuity contracts to highly rated insurance providers.

Additional Pension Derisking Legislation Pending in Connecticut! has done it again!  Raised Bill No. 5455 entitled “An Act Concerning the Purchase of An Annuity to Fund Pension Benefits” has been introduced in the Connecticut legislature.  The proposed legislation requires disclosures to retirees impacted by pension derisking transfers and limits subsequent transfers of the annuity contract to “an entity that maintains a rating equivalent to an A or better from two or more nationally recognized rating agencies.”  This proposed legislation will enhance the ground-breaking legislation passed by Connecticut last year under Public Act 15-167 which went into effect on October 1, 2015, providing creditor protections to retirees in pension derisking transfers.

New Hampshire Ups Guaranty Association Coverage


New Hampshire has increased guaranty association coverage for annuity contracts  from $100,000 to $250,000.  While this is still $250,000 less than the coverage offered by New York, Connecticut, New Jersey and Washington, it puts New Hampshire in line with the coverage offered by thirty-seven other states.

This increase in coverage is very important to retirees in pension de-risking transactions. Typically, in the event of an insurance company or annuity provider insolvency, a retiree would be protected by the laws of the state he/she resides in at the time the insurance company is declared to be insolvent or impaired.  Retirees may unwittingly divest themselves of guaranty association coverage by moving after the transfer of their pension obligations. A retiree living in New York with $500,000 of potential coverage would find himself or herself with just $250,000 of coverage after relocating to New Hampshire.