Are you receiving payments from a
Structured Settlement or an Annuity ?

Do you need money now ?

We can help

NATIONWIDE FUNDING GROUP can help you get cash now for part or all of your Structured Settlement Annuity payments. We advise our customers to sell only that portion of a payment stream necessary to meet current needs. And, we develop each payment transaction around the customer's special needs by offering a variety of purchase options:

• Lump sum payoff

• Partial Lump sum payout

• Restructured payment stream

You can sell all or a portion of your future Structured Settlement payment stream to meet emergency financial needs for:

• Medical expenses

• Debt elimination

• Education costs

• New business opportunities

• New home or automobile purchases.

We offer the best price and customer service with a total commitment to reliability and dependability.

What Are Structured Settlements ?

A Structured Settlement is a method of paying damages to a plaintiff (the injured party) over a period of time when a lawsuit has been settled.

A structured settlement is an agreement to make payments over time in exchange for a release of liability, usually resulting from a personal injury or other form of tort claim. Structured settlement payments can be inflexible and often fail their intended purposes, particularly in cases when individuals receiving structured payments are faced with a financial emergency.
Liquidating a portion of a structured settlement is oftentimes at best the most beneficial option, or at worst the only solution to a critical financial need.

How Are Structured Settlements Created ?

A Structured Settlement most commonly results from a personal injury lawsuit involving:

• Product liability

• Motor vehicle collisions

• Wrongful death

• Medical malpractice

When the outcome of a lawsuit results in a settlement, the damages awarded are funded in the form of an annuity contract issued by an insurance company. This settlement is structured as follows:

• A company (typically an insurance company) is selected by the defendant to structure the settlement.

• The structured settlement company purchases an annuity contract and sends the payments from the annuity to the plaintiff. The payments are fixed in time and amount.

• The structured settlement company retains ownership of the annuity even though the plaintiff is the beneficiary.

Who Can Benefit From the Sale of a Structured Settlement ?

Plaintiffs receiving a structured settlement can benefit from the sale of their stream of payments by receiving a lump-sum of cash.

Our affiliated companies can often purchase settlements that plaintiffs have been told are non-assignable. We provide the best value and customer service in the industry with a choice of payment options. Contact us for further information and assistance in this area.

20 Questions and Answers
regarding the cashing-out/selling of in-force
Structured Settlement payment streams

The Structured Settlement purchase industry in the 21st century is very different from the industry that was started nearly 15 years ago.

What has brought about the change in the industry is legislation at both the state and federal level that affords protection to both the seller ( annuitant ) of Structured Settlement payments and the insurance companies who will be transferring those payments to settlement buyers. With that protection assured, the purchase of Structured Settlement payments from annuitants has become a mainstream financial services industry.

The following questions and answers are based on the Federal and State legislation that is important to the 21st century's version of the Structured Settlement purchase business.

QUESTIONS/ANSWERS

Question 1: Why would anyone sell his or her Structured Settlement payments ?

Answer: While Structured Settlements serve an important role and more often than not meet the payees' (annuitants) needs as originally planned, they are incapable of resolving unplanned, immediate financial needs of the payees/annuitants. If the individual seeks money from his settlement payments, it's usually because he has a financial emergency and does not have access to traditional credit sources. The payee may have lost his job or gotten a divorce, he may need to save a home from foreclosure, or maybe he encountered medical emergencies. There are a number of valid reasons. Liquidating a portion of settlement payments is sometimes the only solution to critical problems.

Question 2: What do the laws say about transfers ?

Answer: Most states have laws that provide for the transfer of Structured Settlement payments. In addition, Federal law HR 2884 ,( known as the Structured Settlement Protection Act ) which took effect on July 1, 2002, granted structured settlement payees the right to sell their annuity payments, without tax consequences, via a court review process.

Question 3: Don't I, ( as Attorney ) have a conflict of interest in referring someone to you

Answer: The transfer process itself resolves the dilemma. Both Federal and State laws require that the transfer of Structured Settlement payment rights be determined by a court of law to be "in the best interest" of the annuitant while considering the support and welfare of his or her dependents. If, after full disclosure of all contract details to the court, notification to all interested parties, and an appearance before a judge, the individual is granted permission to complete the transfer, the court has assumed the responsibility of determining what is in the best interest of the annuitant.

Question 4: Why would I ( as an Attorney ) refer someone to a purchaser of Structured Settlements ?

Answer: If an individual annuitant has a financial emergency and does not have access to traditional credit sources, he or she may need the assistance of a purchaser of Structured Settlements . Funds can be used for various financial needs, including paying off debt, college, nursing care and other unexpected living expenses.

Question 5: What about the insurance company ? Won't they object ?

Answer: A few insurance companies object to these transactions, but most do not. Settlement buyers have working relationships and agreements with most insurers and know in advance what venues they desire as well as the representations, warrants, and stipulations they require in each court order. As a result, they can prepare the orders in advance with the proper language expected by each company, ensuring an orderly transfer without contentious and costly court battles.

Questions about the Role the Courts Play in Settlement Transactions

Question 6: Who protects the seller's dependents ?

Answer: The Federal law requires that every transfer meet certain conditions or it will be subject to an excise tax. Among the conditions is that the transfer be determined by a court of law to be in the best interest of the seller while considering the support and welfare of his or her dependents. The court considers the interest of the seller's dependents before permission to transfer payments is granted.

Question 7: What information is available to the judge to determine if the transaction is in the seller's best interest ?

Answer: The judge has complete disclosure of all information about the transaction including:

•  The discount rate applied to the payments

•  The retail value or replacement cost of the payments being transferred

•  Evidence that all interested parties have been sent a notice

•  Names and ages of all dependents

•  Personal testimony by the annuitant about the need to sell payments

•  Testimony from any interested party who may oppose the transfer

•  A copy of the contract, the original settlement, and the annuity policy

From this information, the judge will determine if the seller's immediate need for funds is greater than the value of the payments being sold, i.e., that the transaction is in the best interest of the seller and his or her dependents and if he/she should or should not proceed.

Question 8: Why would a judge approve such transactions ?

Answer: Most judges carefully scrutinize each file to determine if the transaction is indeed in the client's best interest while considering the support and welfare of the seller's dependents. Judges realize that these annuitants often do not have access to traditional credit sources and the only way some of them can reach their financial goals is by selling a portion of their settlement payments. As long as the seller is an adult of sound mind, has a legitimate need for this money, and can prove to the judge that selling is in the best interest of both the seller and his or her dependents, the judge has little reason to deny the transaction.

Question 9: What about the courts that have held anti-assignment language as enforceable ?

Answer: Courts throughout the country have made conflicting decisions, with some upholding anti-assignment language and others holding that such language is unenforceable. For the most part, these transactions are rarely denied in court due to anti-assignment language. Even in states where the courts have upheld anti-assignment language, judges often rule that a transfer of payments is in the best interest of the annuitant notwithstanding such previous rulings. A funding source's cooperative relationship with most insurance companies allows it to structure transactions that are ultimately in the seller's best interest and agreeable to the courts.

Question 10: Will the court review the original settlement agreement ?

Answer: With the possible exception of an interested party opposing the transfer based on anti-assignment language, the court generally does not review the original settlement agreement. It is, however, a required document for identifying interested parties and beneficiaries.

Question 11: Do the sellers get independent legal and financial advice ?

Answer: Most state laws provide the seller the option to seek legal, financial, and/or tax advice before entering into a purchase and sale agreement. Some states have made this mandatory, while others require the seller to sign a waiver if they choose not to seek independent legal or financial advice. The settlement buyers and consultants should encourage clients to seek advice before asking court approval to sell their payments.

Question 12: What costs will the annuitant bear if the court denies the transaction ?

Answer: None . If the court denies the annuitant's petition, the funding source assumes the cost and learns from that experience. Experience has taught us what criteria determine "best interest" by most judges, so we seldom enter into contracts that would fail the test. As a result, our funding sources have a success rate of over 90 percent.

Question 13: When will the annuitant get paid if the order is approved ?

Answer: Usually within eight working days after receiving court approval. Once an Order is issued, the funding source notifies the insurance company and obtains its acknowledgment, after which the funding source pays all parties.

Question 14: What will the annuitant be paid ?

Answer: Each transaction is priced on an individual basis. The average transaction is about $40,000, but can range from $15,000 up to $500,000 in cases where estates are being settled. The amount purchased is a function of four things:

•  The amount the annuitant is attempting to raise to meet their immediate needs

•  The size and term of their remaining guaranteed payments

•  The seller and his or her dependents' reliance upon the payments for their livelihood

•  The discount rate applied to the payment stream

Knowing these four things allows the funding source to apply the "best interest" standard prior to entering into a contract.

Question 15: Can the annuitant sell only a portion of their payments ?

Answer: Yes. The funding source works with the client to ensure the transaction is structured to meet his or her needs. We attempt to leave as much as possible of the seller's monthly payments by purchasing smaller amounts for longer periods or by concentrating on irregular lumps.

Question 16: Aren't there tax consequences to the annuitant and the insurance company

Answer: No . With the passage of HR 2884 , that issue has finally been put to rest. This law specifically states that neither the issuers, owners, nor annuitants will suffer tax consequences as a result of these transfers. In addition, the law clarifies that transfers done prior to the enactment of this law do not invoke taxes to any party.

Question 17: Can this be done in all 50 states ?

Answer: More than two thirds of the states ( including Florida , Florida St. s626.99296 ) now have transfer statutes in place. Individuals living in states that do not currently have a transfer statute are often permitted to file their petitions in the state where their insurance company is headquartered. It is, therefore, rare that a proper venue cannot be found to file a petition for transfer. For a current list of states that have transfer statutes, please contact us.

Question 18: How should I ( as the referring attorney ) inform my clients of this option should they need it ?

Answer: Providing information via mail about the new laws and describing this option, should it be needed, is the best way. This allows each annuitant to decide for themselves
if this is something he or she wants to explore without feeling pressured or harassed. We will be happy to assist a consultant or an attorney in informing people about this option should they need it.

Question 19: How do I know my referral will get a fair deal ?

Answer: We pride ourselves in taking care of the client first. The client will not only receive the most competitive pricing, but will also be treated with the utmost respect. The court order process itself, including the scrutiny by a judge and independent counsel, further ensure fair and equitable treatment of the annuitant. Our settlement purchasers are members of the National Association of Settlement Purchasers (NASP) and are expected to adhere to high ethical standards.

Question 20: Will I (the attorney) be named in the filings that go before the court ?

Answer: No . Only interested parties are required to be put in the order that have a direct link to the payments themselves. Since you (the attorney) are not a broker for the annuitant and your fees, paid by the funding source, are not deducted from what is quoted and paid to the annuitant, the fees are not subject to disclosure requirements.

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