The Structured Settlement Process | Annuity.Org Cites 10 Sources and Still Gets It Wrong

by Structured Settlement Watchdog

Inaccurate depiction of the structured settlement process by Annuity.org that has been edited and then financially reviewed by a PhD and accounting professor who is held out as an "expert on financial literacy"

Reaching a settlement is the result of a compromise and a compromise is a two-way street. But as the diagram to the right shows, it's a "one-way street" at Annuity.org which has made a real hash of it, despite citing 10 sources and having it "financially reviewed" by a PhD and accounting professor that is held out as an expert in financial literacy.

So let's set them straight, shall we?

A settlement is memorialized in a settlement agreement, which is a contract.

What are the elements of a contract?

The requisite elements that must be established to demonstrate the formation of a legally binding contract are (1) offer; (2) acceptance; (3) consideration; (4) mutuality of obligation; (5) competency and capacity; and, in certain circumstances, (6) a written instrument.  [Source: US Legal] 

In the Annuity.org inaccurate structured settlement process diagram:

Step 1 is represented to be a one way agreement to settle by the Claimant and a Release of Liability.  Why would a Claimant release anyone from liability without getting anything in return?

Step 2 is represented as Defendant funds the settlement and assignee liability to Assigment Company. What liablity has Dedendant assumed since the diagram depicts a one-way street? Is the entire "phantom liability" assigned to the assignment company?

Step 3 is represented as "assumes responsibility to make payments and purchases an annuity from Life Company". In Step 2 under the Annuity.org inaccurate structrued settlement process diagram there is a "phantom" unspecified liability not a responsibility. I'm not sure you can assign a responsibility, but since we don't know what the consideration is from Step 1 of the inaccurate Annuity.org structured settlement process diagram  (perhaps there is no consideration), may be it's not even a valid contract that would be accepted by any assignment company.  Finally, and this is rather amusing, "a Life Company (Swedish: Livkompani, but usually written in its definite form; Livkompaniet) is a Swedish military term of several centuries' standing. It is the first company of a regiment in the Swedish Army. Before the 17th century, the term referred to the company that was controlled directly by the regimental commander." [Source: Wikipedia].  Simply denoting LIfe Insurance Company (or Life ins. Co.) would solve at least that element of potential consumer confusion.

Step 4 in the Annuity.org inaccurate structured settlement process diagram is represented as Life Company pays benefits to Clamant.  What's the difference between benefits and payments? So, if you can follow this literally... Claimant releases the Defendant from an unspecified Liability for no consideration, but the Defendant (who has already been released) assigns liability to the assignee who assumes a responsibility to make unspecified payments under the one-ways street. But didn't the Assignment Company assume liability, for what who knows because the diagram is not clear. But then the first company of a Swedish army regiment pays benefits? Of course they do, "how Swede it is!"

Read a more accurate, comprehensive and consumer friendly definition of the structured settlement process