It’s always a pleasure to be quoted in the media, especially when the author is Warren Hersch, the well-regarded insurance industry investigator. Hersch has an article on the structured settlement industry in today’s Life Annuity Specialist. His focus is on the industry’s changing leadership which includes an insurance executive, Michelle Caine of Prudential Financial, taking over as President of the National Structured Settlements Trade Association (NSSTA).
Training aside, advisors and consultants in the industry need to be better regulated, according Peter Arnold, a consultant who from 1995 to 2014 managed public affairs for the National Structured Settlements Trade Association.
Personal injury claimants may be getting less than an optimal deal on the annuity because of conflicts of interest arising from carriers or wholesalers offering exotic trips or other financial incentives to consultants who sell their products, he said. “That’s a big problem if Elizabeth Warren or someone like her starts poking around,” says Arnold of the U.S. senator and presidential candidate. In 2017, Warren issued a report charging that 24 companies paid kick-backs and awards to annuity sales agents, creating conflicts of interest that “can result in devastating consequences for retirees.”
“The optics are even worse,” adds Arnold. “Having an insurance company offer five-star resorts to brokers whose sole business involves financial assistance for accident victims undercuts the goodwill the industry’s going to need for future legislative efforts.”
For years, the NSSTA shied away from having an insurance executive as its president. The reason was easy to discern. Insurance executives were (and are) ill-suited to mediate policy disputes among structured settlement consultants since those consultants are the insurers’ customers. Regardless, here’s hoping Michelle has a good tenure.