by Structured Settlement Watchdog
More secondary market misinformation uncovered, this time from Michael Kitces. In a 2012 Kitces Report article entitled "Is Structured Settlement Annuity Investing a Good Idea? Yes But...", Michael Kitces proved that even people with 8 financial credentials were getting it wrong about structured settlement investments.
Kitces completely whiffs when he says that "generally the sale of a structured annuity results in the transfer of the actual annuity contract". It doesn't. A "Structured Settlement Investment" is an investment in structured settlement payment rights. The structured settlement payment rights are transferred in a structured settlement factoring transaction
The more I dig into the structured settlement secondary market, the more the truth about the misinformation being shoveled to investors rises to the surface.
In the comments to the same article one of the commenter chimes in about Kitces' comments about state guaranty fund payments to investors.
"-the beneficiaries, payees or assignees of insured persons are protected as
well, even if they live in another state [so if you have the annuity assigned to you, you are protected]"
But you DON'T have the structured annuity assigned to you. The structured annuity is owned by the qualified assignee as it was when the structured settlement was established. What is happening is the transfer of structured settlement payment rights. Structured settlement payment rights are not an annuity.