by John Darer CLU ChFC MSSC CeFT RSP CLTC
The next time you get a piece of The Rock, it won't include a single claimant qualified settlement fund.
The Prudential Insurance Company of America dealt a massive blow to promoters when it announced March 19, 2012 that it will no longer write structured settlement annuities stemming from single claimant qualified settlement funds ("QSF") effective immediately.
The Prudential defines a single claimant QSF as a fund either established for the benefit of a single
claimant or, for multiple claimants who do not have “competing interests” (e.g., plaintiff family
members). Prudential will not provide for “derivative” claims from the injured party, i.e., a loss of
consortium or an emotional distress claim by the parents and/or siblings for the personal injury
The Prudential takes the position that when the funds are deposited into a QSF for a single claimant,
and there are no other factors to be negotiated under the settlement, the claimant has received
economic benefit of the assets**. Prudential does not consider lien holders or other non-claimant creditors (attorneys, medical providers, Medicare or Medicaid) as substantial additional obligations to be satisfied prior to the claimant’s ownership of the assets transferred to the QSF (EMPHASIS ADDED)
**Read NJ Claims Qualified Settlement Fund Assets "ARE Available to Beneficiaries" February 28, 2012
It is Prudential’s position that the attorney’s portion of the funds deposited into a QSF is
constructively received by the attorney and the attorney derives an economic benefit from those
funds unless specific circumstances exist. This is based on the fact that the amount of their fee
is known at that point so there are no other factors to be negotiated. Prudential will accept the
assignment of attorney fees that flow through a QSF when ALL of the following conditions exist:
• The attorney and his (her) client agree to structure the attorney’s fees prior to services being
• The case involves multiple claimants who have competing interests.
• There are multiple attorneys representing different claimants.
• The attorney’s fee is dependent upon the settlement their client is awarded.
• The amount their client will receive was undetermined at the time the funds were placed
into the QSF
• There must be an attestation that ALL of the above conditions exist.
Despite being on the Priority Guidance Plan of the United States Treasury for several years the issue of single claimant qualified settlement fund was unceremoniously dropped in late 2009. Efforts to incorporate it into changes to IRC 104(a)(2) at February 2010 hearings failed. It is believed that only one company remains that will accept structured settlements from a single claimant qualified settlement fund. As such, heeding a claim appearing on the website of a settlement planner claiming give full annuity market access using such a strategy is simply setting the attorney up for malpractice claim