Plaintiffs, Plaintiff Attorneys, Attorneys General, Departments of Consumer Affairs and Insurance Commissoners ought to be aware of the misuse of the term "funding" in connection with the term "structured settlement" or "structured settlements". True to their form, certain companies engaging in the purchase of structured settlement payment rights are creating consumer confusion by using the term "structured settlement funding".
Nobody can dispute that a structured settlement is a defined term under the Internal Revenue Code at IRC 5891. The defined term structured settlement is almost always funded with a structured settlement annuity, which is an insurance product manufactured by licensed insurance companies and, by law, sold only by licensed agents and brokers. The structured settlement annuity, or so called "qualified funding asset" is paid for or "funded" directly by the defendant or its insurer...END OF STORY
I've done alot of checking and many if not all of those advertising structured settlement funding (whether by buying Google Adwords, programming into the meta tags or content of their web sites) have any active insurance license or appointment with any of the insurance companies offering the annuities that really are part of structured settlement funding. I also show no record of any of them being an insurance company that manufactures a structured settlement annuity!
Funding has become part of the advertising jargon used by companies who provide money to plaintiffs prior to the resolution of law suits and to attorneys to finance their law suits. Essentially it refers to the date the money (or funding) is delivered to the person needing it by the company provding such money (funds). However this has nothing to do with the funding of a structured settlement and the connection of the terms is not correct. Truth in advertising laws should be enforced so that abusers of this term do not get away with this any further.
For examples of how the term 'structured settlement funding" is being abused, please click on both the following links