Structured Settlements Broker Manual

Transcription

1 Structured Settlements Broker Manual MISSION STATEMENT We strive to be a top-level product provider to the Structured Settlements marketplace. We will achieve that goal by having close relationships with brokers and offering innovative products with competitive premium rates and by providing quality service that always meets or exceeds our brokers expectations. Updated 05/04/15

2 Table of Contents Section 1 Legal Disclaimer... 1 Document Review... 1 Section 2 Company Profile... 2 Structured Settlements Family of Companies... 2 Credit Ratings... 2 Section 3 Information & Contacts... 3 Section 4 General Product Specifications... 4 Section 5 Medical Underwriting Guidelines... 5 Section 6 Pricing Guidelines... 6 Benefit Types/Levels... 7 Section 7 Submission of Premiums... 8 Non-New York Cases... 8 New York Cases... 9 Section 8 Product Types Structured Settlements Nonqualified Settlements Attorney s Fees Documentation Requirements Application Proof of Age Qualified Assignments Settlement Agreements Court Orders, Minor s Compromise, etc Payments to a Trust Secured Creditor... 20

3 Section 9 ILAPA and Commutation Riders Section 10 Sample Documents Section 11 Broker Commissions Section 12 Benefit Administration Maintaining Client Contracts Section 13 Quote-in-a-Box (QIB) Software Running a Quote Uninstalling the QIB System Section 14 Forms... 41

4 Section 1 Legal Disclaimer Pacific Life cannot and does not provide tax or legal advice to brokers or their clients. Nothing contained in this manual should be construed as tax or legal advice. Brokers and their clients should consult with their own legal counsel for any and all such advice. Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Insurance products are issued by Pacific Life Insurance Company in all states except New York and in New York by Pacific Life & Annuity Company. Product availability and features may vary by state. Each company is solely responsible for the financial obligations accruing under the products it issues. Insurance product and rider guarantees are backed by the financial strength and claims-paying ability of the issuing company. Document Review Our review process is strictly limited. It is intended to fulfill the company's own business and due diligence needs by, among other things, ensuring consistency and accuracy of the data provided in all documents. Pacific Life will request and perform a limited review of any documents it deems appropriate to satisfy our business requirements from a due diligence standpoint. Review for any and all other purposes, such as legal sufficiency or advisability, is solely the responsibility of the parties and their counsel. 1

5 Section 2 Company Profile Structured Settlements Family of Companies Annuity Issuer: Domiciled in: Assignment Company: Assignment State: Guarantor1: Domiciled in: Pacific Life Insurance Company Nebraska Pacific Life & Annuity Services, Inc. Colorado Pacific LifeCorp Delaware Credit Ratings Pacific Life Insurance Company s balance sheet and capital positions remain strong. For more information on ratings, please click the following link: Pacific Life Insurance Company's Ratings that will redirect you to our website. Pacific Life Insurance Company and Pacific Life & Annuity Company Ratings A.M. Best Financial Size Category FINANCIAL STRENGTH A+ Superior Class V Standard & Poor s A+ Strong Fitch A+ Strong Moody s A1 Good Second highest of 16 ratings; Ratings range: A++ to S (Superior to Suspended) Fifth highest of 21 ratings; Ratings range: AAA to R (Extremely Strong to Regulatory Action) Fifth highest of 21 ratings; Ratings range: AAA to C (Exceptionally Strong to Very Weak) Fifth highest of 21 ratings; Ratings range: Aaa to C (Exceptional to Lowest) 2

6 Section 3 Information & Contacts Main Number: (877) Sales: 8:00 a.m. 7:30 p.m. ET (5:00 a.m. 4:30 p.m. PT) New Business: 9:00 a.m. 7:30 p.m. ET (6:00 a.m. 4:30 p.m. PT) Submit: Quotes, Lock-Ins, & Sales Questions Fax Number: (877) Structures@PacificLife.com Submit: Documents & Pre-Issuance Questions Fax Number: (877) StructuresNB@PacificLife.com Submit: Medical Records & Rated Age Inquiries Fax Number: (877) Meds@PacificLife.com Changes and Inquiries after Policy Issuance Toll-Free Number: (888) Fax Number: (402) Documents & Correspondence Mailing Address Pacific Life Structured Settlements RSD/4th Floor P.O. Box 9000 Newport Beach, CA Overnight Mailing Address Pacific Life Structured Settlements RSD/4th Floor 700 Newport Center Drive Newport Beach, CA New Business: Document Submission, Pending Contracts, & Commissions Phone: (877) , Option 2 Fax: (877) StructuresNB@PacificLife.com Sales: Quotes & Lock-Ins Martha Hunt, CSSC Internal Sales Manager Martha.Hunt@PacificLife.com Prem Balani, CSSC, FLMI Sales Associate, West Prem.Balani@PacificLife.com Claudia Schab, CSSC Sales Associate, East Claudia.Schab@PacificLife.com Danielle Ruiz-Vela, CSSC Lead Internal Sales Associate Danielle.Ruiz-Vela@PacificLife.com Abbey Hudson, CSSC Sr. Internal Sales Associate Abbey.Hudson@PacificLife.com Jane Lin, CSSC Sr. Internal Sales Associate Jane.Lin@PacificLife.com Marketing Ravi Vaswani, CSSC Regional Vice President, West Cell Phone: (949) Ravi.Vaswani@PacificLife.com John Meaney, CSSC Regional Vice President, East Cell Phone: (860) John.Meaney@PacificLife.com Licensing & Appointments Dean May Business Development Coordinator Dean.May@PacificLife.com 3

7 Section 4 General Product Specifications Locations Licensed Assignment Fee Product Basics Rated Cases All states. $250 for all assigned cases. All cases that qualify under IRC: Section 104(a)(1) Workers Compensation (for claims filed after 8/5/1997). Section 104(a)(2) Personal Injury. Substandard age ratings valid for 12 months. Maximum Age Rated or standard is 80. Deferral Period Benefit Cost Lump-Sum Payments COLAs Commutation Rider Nonqualified Settlement Attorney s Fees 468B Trust Premium Guidelines Daily Rates Book-Rate Guarantee Small-Case Fee New York Cases Payees without an SSN Maximum of 20 years. Minimum premium cost of $100 per benefit stream. Lump-sum payments, guaranteed or life contingent, can be quoted from our software. Home-office approval must be obtained for payments greater than $1,000,000. No more than a 50-year deferral. Single lump-sum payments are not acceptable. Available up to 5.00%. Quote from the Quote-in-a-Box (QIB) software. Available to address estate tax issues (assigned and unassigned), elimination of liability (unassigned only), and remarriage (unassigned only). No additional cost. Available for settlement-based annuities. Assignment not available. May be quoted on software. Home-office approval is required prior to sale. Payments must begin within one year of funding and payment streams must be substantially equal. Assignment of attorney s fees as part of the claimant s settlement and stand alone. For more information, please see Section 8. Contact home office. Not available for situations involving a single claimant. Minimum case size is $10,000. Brokers may quote up to $1,500,000. On cases greater than $1,500,000, contact our home office for approval. Offered on cases with premiums greater than $100,000. Please call or our home office for the best rate possible. Seven calendar days or the last day the rate is available before a rate change. Applied to cases between $10,000 $25,000. The fee is the lesser of $500 or the amount to bring the premium up to $25,000. New York Regulation 60 Disclosure Form required. Contracts not available for 50(A) and 50(B) Judgments. See New York Cases subsection for details. Life-contingent benefits are not available. Payments must be mailed to a U.S. address or deposited into a U.S. bank account, and cases must be under U.S. jurisdiction. 4

8 Section 5 Medical Underwriting Guidelines Medical Evaluations Turnaround Time Multiple Brokers Required Information Preferred Medical Records Response with No Rated Age Valid for 12 months. 24 hours. Response will be issued to all brokers with valid rated age submission based on the most current information evaluated. Broker s name and location. Claimant s full name, correctly spelled. Claimant s date of birth. Claimant s gender. Most current, typed valid medical records completed by a medical professional, such as: Independent medical evaluations less than two years old. Typed evaluations and follow-up visit reports from treating physicians. Hospital admittance and discharge summaries. Neurological evaluations, especially brain injuries. Surgical and pathology reports for cancer cases. Rehabilitative reports. Age of medicals greater than three years old for all medical conditions. Medicals that are handwritten and/or difficult to read. Medical Summary or Chronological Summary prepared by non-medical professionals. Court/Deposition reports. Rated Age Extension Reevaluation of a Medical File Updated Medical Records No Additional Medical Records Within three months of its expiration. Upon receipt of current medicals. (Please do not request prior to this time frame.) Pacific Life will reevaluate the case considering the new information and provide an updated age rating, if appropriate. Expires 12 months from new evaluation date. With no new information, a conservative evaluation of the existing records will be completed based on: Nature and severity of the impairment. Age of the claimant. Age of the medical information. 5

9 Section 6 Pricing Guidelines Small-Case Fee Valid Rates Lock-In Daily Rates Rate Changes Assignment Fee 6 This $500 fee is applied to small-premium cases. The smallcase fee is the lesser of $500 or the amount needed to bring the premium to $25,000. The minimum acceptable case size is $10,000. Pacific Life s quoting software will calculate the appropriate fee. Book rates are guaranteed for seven calendar days from quote date unless notified of a rate change. If funding is provided within seven calendar days, submit the premium to the home office. Lock-ins are available for a period of up to 12 months on settled cases. Upon announcement of new rate series, up to seven calendar days are allowed from the date of the notice to submit the premium under the expiring rates. If unable to fund in this time frame, please submit an executed lock-in form to secure the rates. Pacific Life does not charge lock-in fees for the first six months of the lock-in period. If funding is deferred more than six months, a lock-in fee of 10 basis points per month will be assessed. Funding must be received no more than 12 months from lock-in date. Execution of Lock-Ins: Complete the lock-in letter with the signature of the appointed broker of record and quote illustration. Pacific Life must receive the lock-in letter before or on the quote expiration date. Lock-in is valid upon written acceptance from Pacific Life. Daily rates are offered on cases with premiums greater than $100,000 (when available). Rates provided may be valid through the next business day or as indicated by the home office. Contact the home office for the best rate. Pacific Life will announce rate changes via and fax on the day of the change. The premium under the expiring rate must be submitted by the expiration date unless a completed lock-in form has been submitted and approved by the home office. In order for Pacific Life to provide prompt notification of rate changes, please inform us of any changes in fax numbers, addresses, addresses, and telephone numbers. A $250 assignment fee will be charged on all assigned cases. If the case is not assigned, please choose the appropriate state of ownership and submit the state-specific application available in the quoting software. Appropriate premium tax will be applied to unassigned cases.

10 Benefit Types/Levels Single Life Joint Life Certain Only Lump Sums Installment Refund Cash Refund COLAs, Step, or Flat Dollar Maximum Age Deferred Benefits Index Linked Annuity Payment Adjustment (ILAPA) Rider All benefit streams must begin within 20 years of funding. With or without Certain Period. Deferred period plus the guaranteed period cannot exceed 50 years. All benefit streams must begin within 20 years of funding. With or without Certain Period. Payments payable jointly to measuring lives. Survivorship benefits offered from 0% 300%. Available for attorney fee structures. Deferred period plus the guaranteed period cannot exceed 50 years. All benefit streams must begin within 20 years of funding. Deferred period plus the guaranteed period cannot exceed 50 years. Guaranteed and life contingent lump-sum payments available. Single lump-sum payments are not acceptable. If all benefits are lump sums, at least one must begin within 20 years of funding. Lump sums must start within 50 years of funding. Single-life cases without assignment. Single-life cases without assignment. Increases can be made annually or less frequently. Available up to 5.00%. First payment must begin by the earlier of natural age 80 or rated age 80. All benefit streams must begin within 20 years of funding. Deferred period plus the guaranteed period cannot exceed 50 years. Capped at 5% Quote from the software Not available on lump sum, temporary life or cash/installment refund benefits 7

11 Section 7 Submission of Premiums Non-New York Cases The following items are required with submission of premium: Premium check Completed Premium Transmittal form Quote illustration Application Note: If premium will be coming from a non-us bank contact the Home Office. Assigned Cases Check payable to: Pacific Life & Annuity Services, Inc. Mail to: KeyBank Pacific Life & Annuity Services, Inc. P.O. Box 1857 Englewood, CO Express mail: KeyBank Lockbox Operations Pacific Life & Annuity Services, Inc Attn: Lockbox Circle Point Road 2 nd Floor Westminster, CO Unassigned /Non-qualified Cases Check payable to: Pacific Life Insurance Company Mail to: Pacific Life Insurance Company Attn: Kelly Gibbs/Treasury Dept./First Floor 700 Newport Center Drive Newport Beach, CA Wire Instructions: Contact home office. Tax ID Numbers Pacific Life Insurance Company (PLIC) Pacific Life & Annuity Services, Inc. (PLASI) Pacific LifeCorp (PLC)

12 Submission of Premiums (cont.) New York Cases Pacific Life & Annuity Company will issue annuity policies if ANY of the following occurs inside the state of New York: solicitation, sales, negotiation of settlement, court/legal action, claimant/payee residence. The following items are required with submission of premium: Premium check Quote illustration Completed Premium Transmittal form Application Note: If premium will be coming from a non-us bank contact the Home Office Assigned Cases Check payable to: Pacific Life & Annuity Services, Inc. Mail to: KeyBank Pacific Life & Annuity Services, Inc. P.O. Box Denver, CO Express mail: KeyBank Lockbox Operations Pacific Life & Annuity Services, Inc Attn: Lockbox Circle Point Road 2 nd Floor Westminster, CO Unassigned/Non-qualified Cases Check payable to: Pacific Life & Annuity Company Mail to: Pacific Life & Annuity Company Attn: Kelly Gibbs/Treasury Dept./First Floor 700 Newport Center Drive Newport Beach, CA Wire Instructions: Contact home office. Tax ID Numbers Pacific Life & Annuity Company (PL&A) Pacific Life & Annuity Services, Inc. (PLASI) Pacific LifeCorp (PLC)

13 Section 8 Product Types 1 Structured Settlements All cases must qualify under IRC Section 104(a)(1) and 104(a)(2). The following products are available in all states: Workers Compensation Section 104(a)(1) assigned claims after 8/5/97; unassigned all Personal Injury Section 104(a)(2) assigned and unassigned 2 Nonqualified Settlements Pacific Life nonqualified annuities may only be funded with post-tax funds resulting from a settlement. The annuities offer taxable payments to annuitants.* Discrimination settlements Divorce settlements Harassment cases Wrongful termination Punitive damages Cases where funds from a qualified case have already been paid to claimant or their attorneys (Constructive Receipt). Features Available to quote on software (home-office approval required) Rated age not available Available to U.S. citizens and permanent resident aliens with a valid Social Security number Available in most states Tax withholding and reporting provided COLAs up to 5.00% Payment must conform to 72(u) corporate owned or 72(q) individual owned: - Substantially equal, immediate payments (commencing within one year of purchase) - Payee must be a natural person (possible exception can be made for individual or family trusts) Ownership Owned by purchaser or payee Payee must be a natural person Assignment not available Offshore entity is not available * 1099m will be provided each year to the owner based on the applicable exclusion ratio and payments for that year. 10

14 Product Types (cont.) 3 Attorney s Fees Pacific Life accepts attorney s fees under the following circumstances: Available as assigned to Pacific Life Annuity Services, Inc. (PLASI). Available as unassigned (must be owned by defendant/insurer). Tax reporting sent to owner. Owner is responsible for tax reporting to the attorney. Payments to the attorney must be for the convenience of the claimant. Attorney can be the measuring life. Payments can be life contingent (Joint Life acceptable). Available with plaintiff s annuity or as a stand-alone payment stream. Payments may be made to the firm. Attorney can change the beneficiary (if payments are being made to the attorney as an individual and not to a firm). Per Stirpes beneficiary designations are not supported. Use the following guidelines when placing an attorney fee payment stream with Pacific Life. Acceptance Guidelines Use the current book rates (up to $1.5 million) or daily rates available for cases greater than $100,000. Use the same underwriting guidelines as plaintiff s annuity except for: o Not available for secured creditor o Not available with Commutation Rider o Not available for rated ages Attorney must sign a Pacific Life Hold Harmless Agreement. Attorney fee convenience language must be included in the Qualified Assignment and Release (QAR) and the Settlement Agreement and Release (SAR). If assigned, all parties must enter into a Qualified Assignment and Release.* If the claimant uses a Pledge Agreement, an additional QAR must be obtained. The attorney must submit a W-9 form. * Enter the plaintiff s name as Claimant on the QAR and NOT the attorney s name; this is true even if the plaintiff is not choosing to structure. 11

15 Documentation Requirements Required for Contract Issuance Notes Application Can be printed from QIB software. Hold Harmless Agreement Pacific Life-specific format. Settlement Agreement and Release Including all required language. Qualified Assignment and Release or Uniform Qualified Assignment and Release (NSSTA version) If assigned, all parties must sign. Other versions of the assignment document are not available for use on attorney fee cases. W-9 Pacific Life can provide blank copies, or the form is available on the IRS website. Required Language Below is the required language to be included in the Qualified Assignment and Release (QAR) and the Settlement Agreement and Release (SAR) for any settlement that will be including an attorney fee payment stream. The Plaintiff (Claimant) authorizes and instructs payment to be made to his/her attorney as provided herein. Such amount shall be paid from periodic payments that otherwise would be payable to the Plaintiff pursuant to this agreement. The Plaintiff acknowledges and agrees that these payment instructions are solely for the Plaintiff s convenience and do not provide the Plaintiff s attorney with any ownership interest in any portion of the annuity or the settlement other than the right to receive the fee payments from the Plaintiff in the future as more specifically set forth herein. Placement of Required Language The language can be added to the document through the software by checking the Attorney Fee box on the Claimant tab. Below are other suggestions for placement of the required language in the QAR and the SAR. Placement Payment Section (QAR & SAR) Attorney s Fees Paragraph (SAR) Note: Either placement is acceptable to Pacific Life. Justification This placement will align the convenience language directly with the benefit stream as stated in the payment section. This placement will emphasize the explanation for the treatment of attorney s fees and refer back to the benefits as stated in the payment section. 12

16 Documents required for the release of the first payment, policy, and commissions: Assigned Cases First Payment Policy Issue Commission Payment Sufficient premium Software-generated quote Completed application with all payee information (Social Security number is required for lifetime benefits) Settlement Agreement document Qualified Assignment document Minor s Compromise/Court Order, if applicable Guardianship of Estate papers, if payments are being made to a minor or incompetent person Conservator documents, if payments are being made to an incompetent person Trust documents, if applicable Order Approving Trust (if applicable) Acknowledgement and Hold Harmless for attorney s fees, if applicable Income tax withholding and substitute IRS form W-9 for attorney s fees, if applicable Regulation 60 form New York cases only Beneficiary designation Proof of age, for lifetime benefits Nature of physical injury Commission Split Agreement, if applicable Written approval from the broker to release first payment and/or policy 13

17 Documents required for the release of the first payment, policy, and commissions: Unassigned Cases First Payment Policy Issue Commission Payment Sufficient premium Software-generated quote Nature of physical injury Completed application, including all payee and owner information Proof of age, for lifetime benefits Written approval from the broker to release first payment and/or policy Nonqualified Cases First Payment Policy Issue Commission Payment Sufficient premium Software-generated quote approved by the home office Nature of settlement Completed application, including all payee and owner information Proof of age, for lifetime benefits Written approval from the broker to release first payment and/or policy 14

18 Application General Information Pacific Life quoting software includes all state-specific applications. Information included on the applications must agree with the settlement agreement, court orders, and the assignment documents (when applicable). Submitted applications require a signature from the general agent of the firm. The broker firm must be licensed and appointed by Pacific Life Insurance Company or Pacific Life & Annuity Company in the state of ownership. Measuring Lives Owner of Annuity Complete the appropriate information for the measuring life, including residence address, Social Security number, and date of birth. Assigned: Pacific Life & Annuity Services, Inc. The software will automatically populate the appropriate information. Unassigned, including nonqualified: This section must include the owner s name, address, and tax ID number. Annuity Plan/ Schedule of Payments Refers to Addendum No. 1 that outlines the payee(s) name, payment address, and payment streams. Amount Paid with this Application Valuable Consideration (unless otherwise stated). Signed by Applicant/Owner Assigned: Leave blank. To be completed by Pacific Life & (sections at and on ) Annuity Services, Inc. Unassigned, including nonqualified: Where and when it was signed by the owner (state of ownership). Applicant/Owner s Signature Assigned: Leave blank. Signed by Pacific Life & Annuity Services, Inc. Unassigned, including nonqualified: Must be signed by the owner. Witness Signed by general agent of the broker firm. 15

19 Proof of Age Requirements Proof of Age Requirements Evidence of date of birth is required for all lifecontingent benefits. Acceptable proof of age documents: Driver s license Passport Birth certificate (only if name matches submitted paperwork) Naturalization records (Certified translation of foreign documents is required.) If none of the above-mentioned documents are available, please provide us with any two of the following: Marriage certificate School-age record Official adoption records Immigration Department records (Green Card) Military records Employment, trade union, fraternal society, church, or hospital records A vaccination record 16

20 Qualified Assignments The specific forms for Pacific Life & Annuity Services, Inc., are in the Quote-in-a Box (QIB) quoting software: Pacific Life Qualified Assignment Pacific Life Qualified Assignment & Release Pacific Life Qualified Assignment, Release & Pledge Agreement (QAR&P) Insert the following information to complete the forms: Claimant Assignor Assignee Annuity Issuer Annuity Policy Number Effective Date Settlement State Measuring life/claimant s legal name as it appears on the Application and Settlement Agreement. Legal name of defendant or insurer who is assigning its obligation to the assignee. Pacific Life & Annuity Services, Inc. Non-New York Cases Pacific Life Insurance Company New York Cases Only Pacific Life & Annuity Company Leave blank. Leave blank. Colorado is preferred. The appropriate parties must sign all signature lines and initial the addendum. Pacific Life & Annuity Services, Inc., will accept the NSSTA versions of the Uniform Qualified Assignment and Uniform Qualified Assignment and Release. No alterations to the NSSTA or Pacific Life versions of the Assignment documents are acceptable. QAR&P must be on Pacific Life & Annuity Services, Inc./Pacific Life approved form. NSSTA or any other versions of the QAR&P will not be accepted. 17

21 Settlement Agreements Please provide a full, final version of the settlement agreement that includes: A description of the physical injury/illness. Payment streams and payees. Payee s right to payments. Assignment language. Annuity purchase language. Beneficiary language. Assignee s discharge of obligation. Signatures of claimant, defendant/insurance carrier, and other applicable parties. For cases where the estate is the claimant and the settlement agreement is only signed by an executor/administrator: All payees or their legally appointed representatives shall acknowledge the receipt of benefits by signing the Qualified Assignment and Release form. Additionally, beneficiary designations must be established by the payee through the completion of a signed Beneficiary Change Request form or by court order. Per Stirpes beneficiary designations are not supported. Court Orders, Minor s Compromise, etc. A court order is required in all cases involving a minor or incompetent adult. The order must show that the court approved all facets of the settlement. Please include any petition, addendum, or attachment referenced in the order. Court Order Must be signed by the presiding judge and include the following: Payee(s) Periodic payments specific benefit type, date, and amount Insurer/Defendant s intention to transfer obligation to Pacific Life & Annuity Services, Inc., and each party s responsibility Assignee s purchase of annuity from Pacific Life Note: All beneficiary designations made on behalf of minors or incompetent adults must be court approved. Motion, Petition, or Application to the Court Guardianship or Conservatorship 18 Please submit if it contains details of the settlement. Guardianship of the Estate or Conservator of the Estate orders are required for all cases where payments are scheduled to be made on behalf of a minor (while a minor) or incompetent individual. It must designate the court-approved recipient of the payments and the person who has been granted responsibility to act in the best interests of the minor/incompetent.

22 Court Orders, Minor s Compromise, etc. (cont.) Guardianship or Conservator Documents Should contain the following: Complete name of guardian or conservator Name of the person the guardian/conservator is responsible for Period of guardianship, if applicable Stamp or signature of judge as well as the filing and execution dates Responsibilities of applicant Letters (if issued) Payments to a Trust Fully executed trust documents are required in all cases where payments are being made to a trust on behalf of the claimant. The trust must clearly state that it is: Irrevocable or revocable. Exclusively for the benefit of the claimant. An Order Approving the Trust is required in all cases where the claimant is a minor or an incompetent adult. The Order Approving the Trust must be signed by the presiding judge, and must approve the Trust by name and the appointment of the trustees. The Order Approving the Settlement will satisfy this requirement if it is clear that the terms of the trust were reviewed and approved. Beneficiary designations: If a beneficiary is not designated, the estate will be the beneficiary. 19

23 Secured Creditor Pacific Life offers annuities on an assigned basis with Secured Creditor status using the QAR&P agreement at no extra charge. The following language may be used in the settlement agreement to reference the Secured Creditor status: If a qualified assignment as described above is made, [insert claimant s name] shall be a Secured Party of the Assignee, as defined in the Qualified Assignment, Release, and Pledge agreement executed between the Assignor and the Assignee to the effect of the assignment. The qualified funding asset or assets purchased by the Assignee to fund the obligation assumed under the Qualified Assignment shall serve as collateral for the promise of the Assignee to make such payments, as and to the extent provided in such agreement. Except for the obligation to provide such collateral, the obligation of the Assignee to make such payments shall be no greater than the obligation of the Assignor immediately preceding the assignment of the Periodic Payments Obligation. Section 9 Index-Linked Annuity Payment Adjustment (ILAPA) Rider This optional rider offers the potential for increased payment amounts for a structured settlement while preserving the current benefit level. By adding this optional rider to a structured settlement at contract issue, changes to the payment amount have a potential to increase, but will never decrease. Payments can increase based on positive S&P 500 index returns. No decrease in payments if the S&P 500 index declines or remains flat. The annual maximum annuity payment adjustment is 5%. The S&P 500 index is a market capitalization-weighted index of 500 companies in leading industries of the U.S. economy. The index is unmanaged and cannot be invested in directly. When the S&P 500 index rises over a period of 12 months (referred to as an Index Measurement Period ), the payments will also rise, subject to an annual maximum of 5%. If the S&P 500 index decreases or there is no reduction to the payment amount. 20