Until the early ‘90s, annuities were the standard choice for structured settlements, even though both U.S. Government Securities and insurance company annuities could be used to fund periodic payments to injured victims. This was natural, because the concept of the “structured settlement” was developed by the insurance industry for its own benefit and enrichment.

The evolution of this form of settlement was driven by the need of insurance carriers and the defense community to help defray the costs of large settlements by using the time value of money. The development had the added advantage of making it difficult for plaintiff’s counsel to determine the actual present value or cost of the future payments being offered to injured plaintiffs.

The new structured settlement industry was populated predominantly by ex-claims adjusters and insurance salespersons who had relationships with the annuity carriers.

It appeared to be a perfect solution for the insurance industry. Defense brokers intentionally kept plaintiffs in the dark about both fees and the true costs of the settlement to the defendant’s insurance carrier. Few plaintiff’s attorneys knew how very easy it was to use future payments to make a little cash look like a lot (e.g., a $1,000,000 lump sum purchased in 1988 and payable in 40 years cost in the range of $30,000-35,000).

Through the ‘80s, the insurance industry and their defense brokers (with the cooperation of high interest rates) offered a seemingly win-win financial alternative. As long as structured settlements could be cloaked in complex language and mathematical formulae that remained unchallenged and difficult to evaluate, plaintiffs were satisfied with their benefits. Still, they did not always get the value they had been led to expect. 

The Halpern Group 
- serving the plaintiff, 
and only the plaintiff, 
using U.S. Treasury Bonds

The Halpern Group, serving the plaintiff’s bar since 1982, was one of the first in the structured settlement industry to support the interests of the injured parties rather than the injuring parties and their representatives.

• We helped to inform plaintiffs of their rights, and the true value of their settlements.
• We urged counsel to examine suggested financial arrangements for pitfalls, traps, and security risks. 
• We warned about potential insurance company insolvencies, and, indeed, these warnings became reality in the early ‘90s. 

Recognizing the needs of injured plaintiffs for structured settlements that were safe, The Halpern Group designed an alternative to life insurance annuity products -- the first structured settlement using United States Treasury Bonds in a periodic payment trust (known as the “United States Treasury Bond Structured Settlement Trust”).

Its purpose was to eliminate the two key areas of principal risk for the plaintiff: 

Commercial failure of an annuity carrier, and
The failure of the “Section 130 Qualified Assignee.” 

The Treasury Bond structure does both: it provides a fail-safe investment product (U.S. Treasury Bonds) with a Trust using a national bank as Qualified Assignee. Furthermore, with the enactment of the “Technical and Miscellaneous Revenue Act of 1988” (TAMRA), there is also a security interest in the underlying qualified funding asset (the U.S. Treasury Bonds) to the plaintiff.

Avoiding rising interest rates
and inflation. Eliminating 
the need for defense cooperation.

But even with the advent of the U.S. Treasury Bond Structured Settlement Trust, two major problems persisted.

The first was the near certainty of a rise in inflation and interest rates, which would reduce the purchasing power of the plaintiff’s fixed periodic payments.

The second was the need for defense cooperation. Having reaped the benefits of self-serving annuity-based structures for so long, the claims community has developed powerful methods to stay in control of the structured settlement process. Prior to the Section 130 Exempt Structured Settlements, all traditional structured settlements required defense cooperation. Most carriers attempted to mandate the use of particular brokers (all allied by both livelihood and experience to the interests of the carriers) and maintained “approved lists” of settlement products that limited the plaintiff’s options. But even with this level of control, the defense carriers would not stand behind the structured settlements they demanded. They further exploited their control by requiring relief from all future liability as a condition of settlement.

The need to overcome these two problems prompted The Halpern Group’s invention of the "Section 130 Exempt Structured Settlement", revolutionary structured settlement options which require no defense approval or cooperation, and which adjust to rising future interest rates while preserving safety and flexibility, tax-free income, spendthrift protection, and emergency invasion privileges