An attorney settling a personal injury case involving a structured settlement has a duty to get the best possible annuity rates available for the claimants. However, many personal injury attorneys simply assume that the annuity quote they and their clients receive is the best rate available. This is not always a safe assumption.
A plaintiff attorney may be getting rate quotes from a defense-provided expert or the attorney may retain his or her own structured settlement specialist. It is clearly preferable to retain your own settlement specialist and to make sure that the specialist retained will quote all of the companies in the market and select the best quote available. A structured settlement specialist retained by the defendant's casualty career will be loyal to that carrier and can save that carrier money at the expense of your client.
Currently there are nine life insurance companies offering structured settlement annuities through the brokerage market. Each company's rates change over time and some are more competitive for some payment streams than others. For example, one company may have the best rates for annuities paying for the next 15 years, while another company may have the best rates for lifetime payments. It is impossible to know which annuity company is going to have the best rates for the annuity design desired for your client unless you receive a complete market survey for each potential payment stream. Additionally, as the size of the annuity gets larger the rates from the annuity companies generally get better. This is due to something called a jumbo case discount or to a home office generated "daily rate quote." These rates may be more competitive than the standard "book rates" quoted by brokers. Unless you are working with a settlement planner who is willing to put in the extra time and effort, you have no way of knowing if the rate your client is receiving is the best available. A conscientious planner should provide you a written survey representing the best rates available from every company in the market.
If your client desires a lifetime payment, the importance of a complete market survey may be magnified due to medical underwriting. The settlement planner should submit the most relevant medical records describing any condition that may reduce the claimant's life expectancy. The annuity companies will provide a "rated age" based on the severity of the client's injuries or chronic health conditions. This rated age, rather than the client's biological age, is then used to price the lifetime annuity, resulting in increased buying power per premium dollar. The rated ages can greatly influence the price of the lifetime annuity payments. Without shopping a client's medical records with all of the companies offering structured settlement annuities, it is impossible to know whether your client is getting the best possible price.
Additionally, the settlement planner you retain should be loyal to you and your client, not the defense. This includes a duty to make sure your client is getting the best possible rate from a highly rated annuity company. Your planner should alert you to any "approved list" or in-house annuity program the defense liability company may try to assert. Participation in programs of this nature could reduce your clients' access to annuity companies or attempt to force your client to structure with the casualty company's life insurance affiliate.
If you are currently not receiving a full market survey on every case, no matter what the size, you are not fulfilling your duty to your client and your settlement planner deserves to be fired. Make sure your settlement planner is working for your client as zealously as you are. A full market survey will help ensure happy clients and provide you and the client peace of mind knowing that they got the best deal available.