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November 17, 2006

Periodic Payment Settlement Act of 1982 | Birth of Qualified Assignments and Codified IRS Rulings

by John Darer® CLU ChFC MSSC RSP CLTC

Origins of The Periodic Payment Settlement Act of 1982

The  Periodic Payment Settlement Act of 1982, also known as Public Law 97-143 or P.L. 97-143 codified all of the prior revenue rulings related to periodic payments to injured parties  This public law allowed defendants and/or their insurers (via a "qualified assignment")  to assign their obligations  to make future periodic payments, to a third party, without retaining a future obligation to the injured party.

The third parties, known as qualified assignment companies, are generally special purpose companies formed to hold these obligations and related to certain of the Top Structured Settlement Companies | Top Structured Settlement Companies 2023 (4structures.com)

This law enables the defendant and/or its insurer to enter into a structured settlement without retaining a long tail future periodic payment obligation to the injured party because that obligation under the settlement agreement has been assigned to a third party.

How did Claimants and Plaintiffs benefit from PL 97-143?

Claimants and plaintiffs benefited as well because, as a result of P.L. 97-143,  there was an option where they no longer had to fear the defendant or insurer going bust while holding the obligation to make periodic payments long into the future. 

The tax benefits of a structured settlement were, are, and are likely to continue to be good public policy as the Act and subsequent legislation indicates.

For example, a later amendment to IRC 130 created the option for plaintiffs to be a secured creditor as part of the structured settlement process in lieu of general creditor status.

Periodically, some plaintiff advocates have tried to suggest that the qualified assignment only benefits defendants and/or insurers. They are misinformed.

The qualified assignment, created Periodic Payment Settlement Act of 1982 remains an integral part of how structured settlements work   

Fellow blogger and structured settlement industry "cartographer" Patrick Hindert, now with Independent Life Insurance Company  (updated), told me he was the only person to testify on the subject before the House Ways and Means Committee in 1982.

Last updated November 9, 2023

Posted at 04:16 PM in Albany New York Structured Settlements, Boca Raton Florida Structured Settlements, Bowling Green Kentucky Structured Settlements, Bridgeport Structured Settlements, Bronx New York Structured Settlements, Brooklyn New York Structured Settlements, Buffalo New York Structured Settlements, Corpus Cristi Structured Settlements, CT Structured Settlements, Detroit Michigan Structured Settlements, Hartford CT Structured Settlements, IRC 130 Qualified Assignment Tax Exclusion Qualified Assignee, Jacksonville Florida Structured Settlements, Kings County Structured Settlements, Lexington KY Structured Settlements, Long Island NY Structured Settlements, Los Angeles CA Structured Settlements, Louisville Kentucky Structured Settlements, Maryland Structured Settlements, Missouri Structured Settlements, NC Structured Settlements, New Jersey Structured Settlements, New York Personal Injury, New York Structured Settlements, News About Structured Settlements, NH structured settlements, NJ Structured Settlements, NYC Structured Settlements, Orange County Structured Settlements, Orlando Florida Structured Settlements, Palm Beach Structured Settlements, Periodic Payment Settlement Act of 1982, Philadelphia PA Structured Settlements, Rochester Structured Settlements, Sacramento Structured Settlements, San Francisco Structured Settlements, Santa Monica Structured Settlements, Sarasota Structured Settlements, Settlement Tax Issues, South Carolina Structured Settlements, St. Louis Structured Settlements, Structured Settlement Definitions, Structured Settlement History, Structured Settlement Information, Structured Settlements, Structured Settlements in Ithaca New York area, Structured Settlements in Michigan, Structured Settlements in Nassau County, NY, Suffolk County Structured Settlements, Syracuse Structured Settlements |

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Guide to Structured Settlements 2024

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