Prudential shelves their non-qualified structured settlement unit.

Today, in yet another indication of the incredible shrinking structured settlement market, Prudential announced that effective immediately they are shutting down their non-qualified structured settlement facility and revising drastically how they approach the underwriting of structured legal fees.

As the timing of the email, 5:00 PM EST, eliminates any possible communication with the company to clarify beyond the announcement we are left to ponder the thinking or circumstances that led to this somewhat shocking bombshell.

All this tells me, when coupled with the shut down of the Aviva structured settlement division, rating drops at American General and Hartford and capacity and underwriting restrictions at Allstate is that our market options on both the non-qualified and qualified structured settlements are shrinking rapidly.

While our industry has fixated itself upon an imagined battle with the evil forces of factoring and other minor annoyances that feed the lobbying and legal machine, we have watched as life company after life company has pulled out of our business or reduced the lines of business they will write.

At what point in time is NSSTA going to get off the 100 year war over factoring and realize that our biggest issue is that our sources of product are slowly but steadily vanishing and that we as an industry can't attract new players to our market?

This is a tough pill to swallow for those of us who have worked hard to expand the non-qualified annuity and structured legal fee area. Hopefully one of the life markets steps in to benefit from the steadily growing market of non-qualified annuities that has been created over the last five years.

Comments

[Jack]

Mark,

If you're waiting for NSSTA to do something, you're deluding yourself. They would rather spend their time and our money fighting among themselves. While I don't agree factoring is unimportant, I can't figure out why we spend hundreds of thousands of dollars over a trivial issue like single claimant QSF's and not a single penny on bringing life markets into our space. Funny thing is, I could swear I thought NSSTA's job was to "protect and grow" our business.

NSSTA has become paralyzed by self serving members and the SSP is irrelevant. So what ARE we to do?

[The Settlement Channel]

Jack,

Your exactly right. NSSTA spent and continues to spend ton's of money and energy fighting the imaginary monster of single claimant QSF while we have watched AEGON, Mass Mutual, Genworth and Aviva depart the market and now life companies cutting capacity and markets. The fact is the QSF has the potential to revitalize and safe our industry, but instead NSSTA pours money and energy chasing that issues related to broker disputes, while the business shrinks and markets cut back and vanish.

Essentially we will need a few powerful and insightful brokers to attack and address these issues as most of our brokers are playing out the string and hoping to stay viable until they retire.