by Structured Settlement Watchdog®
Novation Capital contributes to the Social Media Road Kill and Structured Settlement Humor columns with failed attempts to define structured settlement broker and annuity issuer in a July 28, 2014 post.
This is just pathetic...
Novation Capital (Beth) "A structured settlement broker is an individual that negotiates the financial payout of a settlement after a lawsuit verdict on behalf of the insurance company that issues the annuity. This payout can be assigned to one person or to a group, such as a family. The broker will also set up the time frame for each payout based on the individuals’ needs"
- As the name suggests, structured settlements are settlements. More cases settle than go to trial, because it's often cheaper and less emotionally draining to settle out of court than to go through a court battle. For both parties, one does not know the outcome in advance of a trial (either by judge or a jury). Settlement offers the advantage of predictability in that the parties can author the terms of their own compromise.
- Without a trial there can be no verdict.
- Assignment generally refers to a qualified assignment or substitution of periodic payment obligors in a case involving damages for personal physical injury or physical sickness. A structured settlement is comprised of periodic payments that are paid to individuals and occasionally to a law firm, or to an entity if the structure was being used to help resolve commercial litigation. All of the latter would be referred to as Payees, not assignees. If you assign something to somebody, the assigned-to party is referred to as an assignee.
Novation Capital (Beth) "Who are some of the top structured settlement issuers?
"MetLife, TIAA-CREF, AXA, Allianz Life of North America, Lincoln Financial Group are some of the top annuity insurance companies in the US. These companies own the annuities and pay them out to individuals"
- Other than MetLife, a brand name used by Metropolitan Life Insurance Company, none of the companies Novation Capital mentioned is a structured settlement issuer. The link leads to a March 2014 publication of Life Health Pro that deals with all annuities not the niche market that is structured settlement annuities. Oddly AIG was left out given that through its subsidiaries, it is one of the largest writers of annuities. Here is a link to a list of companies that issue structured settlement annuities through licensed insurance agents and brokers they authorize or appoint.
- Neither the companies that actually issue structured settlement annuities, nor the companies that Novation Capital(Beth) erroneously claims to issue structured settlements ,owns the annuities. With structured settlements, the annuity applicant and owner is usually the qualified assignment company or non qualified assignment company. In rare instances the defendant or insurer owns the annuity. The ownership of the annuity does not change in this regard even if a company like Novation Capital enters into a structured settlement factoring transaction and acquires structured settlement payment rights from the payee.
- With a regular annuity the applicant and owner is usually an individual. But the companies that Novation Capital (Beth) alludes to are not the owners.Th eindividual completes an application through a licensed agent or broker
And now, punctuated by the Novation Capital output we've just read, comes the humor, Novation Capital style:
"Getting the facts about structured settlement brokers, issuers and factoring companies can sometimes be overwhelming, especially since there’s so much misinformation out there"