How the Fixed Rate Runner Works
The Genex Capital Fixed Rate Runner™ provides fixed term income streams at fixed interest rates paid by top rated US insurance companies at up to two times the total cash on cash return of comparable products offered by the same insurance companies direct. Similar risk, with up to twice the reward. Think this well-kept secret is too good to be true? The fact is, astute investors, nationwide, have been purchasing this product from Genex since 2003. Over $1.2 Billion transacted to date, and counting.
Executive Summary
Genex buys future structured settlement annuity payments from annuitants at a discount and transfers those payments to Genex’s servicing company. Each transfer is overseen by a State superior court judge who must apply an “annuitant best interest test”. Following the transfer and court ordered sale to Genex, we resell these income streams to astute buyers like you, thereby passing on the discount savings. The applicable insurance company is directed by court order to pay you through our servicing company. Similar risk as buying from the insurance company direct, but at up to twice the yield. It’s as simple as that.
Flexible terms
Offerings range from 5 to 40+ years and are not tied to an individual investor's age.
Suitability
Both individuals and institutions (ie. trusts, charities, hospital capital funds, credit unions, HOAs, etc.) are eligible to buy. Genex has a comprehensive suitability and know your client (“KYC") protocol for each new investor.
IRA Eligible
The Fixed Rate Runner is eligible for self directed IRAs. Genex can assist with referrals to custodians familiar with our product.
Personal
Investment
Strategies
Limited only by your imagination:
-
Carve out and buy only “back end” payments to fund long-term care needs for elderly loved ones and/or yourself following retirement.
-
Buy just the “front end” payments to create a sinking fund for your child’s housing costs while away at college.
-
Buy long lump sums to fund a first home purchase for each of your children. The downpayment will be conveniently available for when they need it most.
Estate Planning
Wealth Transfer
Estate plan and wealth transfer by forward investing for the benefit of your legacy, giving you peace of mind that you have executed a prescient plan for your loved ones during your lifetime. Speak to your advisors on how you can also defer taxable income.
Corporate/
institutional
investment strategies
Custom create portfolios with the help of Genex:
-
Generate up to 200% more cash to fund future capital calls, pension obligations and other similar long-term commitments.
-
Create more flexible monthly cash flow options at significantly superior rates not offered by CDs in order to fund ongoing periodic operating expenses such as property management fees, employee wages, employee health benefits programs, etc.
-
Build investment portfolios customized to your preferred yield, maximum term, weighted average life and overall objective.
Investment Flow of Funds
-
Insurance company pays Annuitant the fixed payment schedule up to the date of court ordered transfer to Genex.
-
Court transfer order arranged by Genex directs the Insurance Company to pay Genex’s servicing agent, Assured Servicing Corporation (“ASC”) all future payments from the date of the order through the end of term..
-
Genex and ASC enter into a Receivable Purchase Agreement (”RPA”) with Buyer directing ASC to pay Buyer immediately upon ASC’s receipt of payment funds from Insurance company subject to the terms of the agreed upon RPA.
-
Buyer receives Insurance company funds pursuant to the agreed upon schedule from ASC by ACH payment transfer or other payment method as soon as funds are paid by insurance company and received by ASC. (Usually within 3 to 5 business days.)
-
Buyer receives each payment as if it came from the insurance company direct.
ASC is controlled by Genex Capital. Genex Capital in turn, has entered into a comprehensive third-party servicing agreement with Lake City Servicing, a longstanding trusted and arms-length institutional servicing company based in Coeur d’Alene, Idaho.
The Details
How the fixed rate runner works
Genex purchases structured settlement payment streams from personal injury victims, nationwide, in exchange for a lump sum payment. These structured settlement payment streams are paid by large “A+ rated” US life insurance companies such as AIG, New York Life, Metlife, John Hancock, Transamerica, etc.
Genex arranges the mandatory court transfer process as dictated by 49 State statutes. Genex obtains a final and non-appealable court order that directs the applicable life insurance company to remit each payment to Genex Capital c/o Genex’s directed wholly-owned payment servicer (“Escrow Agent.). Each payment is made directly from the life insurance company to Escrow Agent who then immediately remits each payment to the designated investor recipient (individual investor, IRA, Credit Union, Charity, Trust, HOA, etc). It’s that simple!
Each designated recipient (investor) is funded in accordance with the agreed upon fixed payment schedule. Genex enters into a funding contract called a Receivable Purchase Agreement (“RPA") with the investor. Each transaction is completed and funded strictly in accordance with the RPA. A detailed closing book is generated for each case and provided to our investors in either PDF or hard copy for their easy reference. Each closing book contains an amortization schedule that clearly sets out the payment details (principal and interest portion of each payment) which can be used for tax remittance purposes.
The Fixed Rate Runner™ has restrictions on reassignment. For early liquidation, Genex has a buy-back program that is favorable to the investor.
Who makes the payments?
Each Fixed Rate Runner™ is paid directly or indirectly to you by a U.S. domiciled Insurance Company with a credit rating that is generally A to A++ rated by Standard and Poor’s ("S&P"). Alternatively, at Genex Capital’s discretion payments may be made by the Insurance Company to Genex Capital c/o its servicing company that, in turn, will make the payments to you. This is called a “servicing arrangement”. In such instances Genex Capital covers all of the servicing costs for the entire payment term. We will sometimes utilize a servicing arrangement so as to better enable payment redirection should you not intend to hold to term for whatever reason.
How is the Interest Rate Determined?
The interest rate for each Fixed Rate Runner™ is determined by the market, what a Buyer is prepared to accept as a return on their purchase taking into consideration the Payment Receivable attributes such as the term, insurance company credit rating, and average life. Generally the market interest rate is significantly higher than that offered on annuities with the same attributes paid by the same insurance companies direct. This is due to Genex Capital’s ability to acquire these payment rights from Existing Annuitants on the secondary market at a discount and pass on this unique advantage to you.
The interest rate for each Fixed Rate Runner™ is represented as an “effective rate” compounded annually based on a 365-day year. This is standard practice in our industry. Interest rates are recorded to an accuracy of 2 decimal places (e.g. 5.80%).
Why are interest rates on the fixed rate runner higher than those offered by insurance companies direct?
The rate of return on an Fixed Rate Runner™ is significantly higher than the rate offered for a comparable payment stream purchased direct from the issuing insurance company for one important reason:
-
The Fixed Rate Runner™ has been “previously held” with attributes such as payment term, payment amounts and average life that cannot be changed. We acquire these annuities at discount prices from Existing Annuitants so we can pass along preferred rates to our Buyers.
