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January 27, 2010

Qualified Assignments 101, What is a Qualified Assignment?

by John Darer ® CLU ChFC MSSC CeFT® RSP CLTC

What is a qualified assignment?

A qualified assignment is a transfer of a contractual obligation to make future periodic payments under a settlement agreement, which satisfies the What is a qualified assignment requirements of Internal Revenue Code (IRC) §130. In a structured settlement agreement the original obligor (the defendant, insurance carrier for the defendant, or the trustee of a IRC 468B qualified settlement fund, assigns its obligation to make the future periodic payments defined in the settlement agreement to a "qualified assignment company".

Only payments which represent damages for personal injury, physical sickness, wrongful death and payments for workers compensation may be assigned by way of a qualified assignment.

Generally a qualified assignment company is a special purpose company, which does little more than hold an annuity or United States Treasury obligations as a "qualified funding asset" to back up the obligations it assumes from Defendants, Insurers or qualified settlement fund trustee. A qualified assignment company may actually be an insurance company itself. When an annuity is used as a qualified funding asset, the qualified assignment company is usually related to the life insurance company issuing the structured settlement annuity. In such cases, the qualified assignment company typically purchases an annuity from the related life insurance company as a qualified funding asset pursuant to IRC 130(d).

A qualified assignment requires the plaintiff's consent.

The answer to the question "what is a qualified assignment" should be fundamental knowledge to ALL competent structured settlement consultants and users of structured settlements. It is a pity to see misinformation occasionally posted on the websites of some settlement consultants, or others, which state incorrectly (see below) that the qualified assignment is "to a financially secure insurance company", or "an assignment to the life company".

To wit... "From the plaintiff’s perspective, an assignment to a financially secure insurance company gives them the assurance that future payments will be made as promised. For many plaintiffs, this assignment to the life company alleviates the stress of future contact with the defendant, their insurer, or any party responsible for the injury"- quote from the  website of a veteran settlement consultant at time of original publication.

Of the primary companies offering structured settlements only the qualified assignment facility used by New York Life (New York Life Insurance and Annuity Corporation) is an insurance company. The qualified assignment companies of United States Life Insurance Company in the City of New York (including the former American International Life Assurance Company of New York), American General Life Insurance Company,  First Berkshire Hathaway Life Insurance Company, Berkshire Hathaway Life Insurance Company of Nebraska, Independent Life Insurance Company, Pacific Life Insurance Company,  Pacific Life & Annuity Company, Metropolitan Life Insurance Company,  Metropolitan Tower Life Insurance Company, The Prudential Insurance Company of America, United of Omaha Life Insurance Company and (i.e. the majority) ARE NOT life insurance companies or even insurance companies for that matter**.

Last updated December 5, 2022

 

 

 

 

Posted at 08:49 AM in Albany New York 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, Chicago Illinois Structured Settlements, Cleaning Up "The Structured Settlement Neighborhood", Connecticut Settlement Planning, Detroit Michigan Structured Settlements, Greenwich Structured Settlements, Hartford CT Structured Settlements, Internal Revenue Code (IRC), IRC 130 Qualified Assignment Tax Exclusion Qualified Assignee, IRC 130(d) Qualified Funding Asset, Lexington KY Structured Settlements, Long Island NY Structured Settlements, Los Angeles CA Structured Settlements, NC Structured Settlements, New Jersey Structured Settlements, New Orleans Louisiana Structured Settlements, New York Personal Injury, New York Settlement Planning, New York Structured Settlements, Newburgh Structured Settlements, News About Structured Settlements, NH structured settlements, NJ Structured Settlements, North Carolina Structured Settlements, Qualified Assignment, Qualified Assignment Company, Qualified Settlement Fund, Structured Settlement Glossary, Structured Settlement Help, Structured Settlement Information, Structured Settlement Law, Structured Settlements 101, Structured Settlements in Georgia, Structured Settlements in Illinois, Structured Settlements in Louisiana, Structured Settlements in Maryland, Structured Settlements in Michigan, Structured Settlements in Nassau County, NY, Syracuse Structured Settlements, TX structured settlements, VA Structured Settlements, Washington Structured Settlements, West Virginia Structured Settlements, White Plains Structured Settlements, WV Structured Settlements |

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Guide to Structured Settlements 2024

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Qualified Settlement Funds

  • What is a Qualified Settlement Fund?
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  • Firmwide Qualified Settlement Funds Debunked
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