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May 10, 2010

Qualified Assignment Company | What is A Qualified Assignment Company?

by John Darer® CLU ChFC MSSC RSP CLTC

This appeared on settlement planning industry veteran Jack Meligan's website** in answer to the question "What are Structured Settlements?" at the time of posting:

"Instead of taking the entire settlement or judgment in cash, you have the option to “structure” all or a portion of your recovery in order to generate future payments designed to coordinate with your future needs.

The original defendant will generally “assign” his/her obligation to make the future payments to a major life insurance company (such as New York Life, MetLife, John Hancock, MassMutual, etc) and the payments are then paid to you by the life insurance company in the form of an annuity".

Comments:

1. Please have a look at this flow chart which lays out the steps of a structured settlement transaction.

How Structured Settlement Works Flow Chart-CTLA 2. Meligan is incorrect for the blanket statement that the (qualified) "assignment" is to a life insurance company. Only one of the current qualified assignment companies in the structured settlement industry (New York Life Insurance and Annuity Corporation, which is used for New York Life Insurance Company funded structured settlements) is a life insurance company.

3. Even so, that company is not the company that issues the structured settlement annuity. Meligan implies incorrectly that the "life insurance company" does two things (1) taking on the obligation to make payments THEN (2) pays the plaintiff in the form of an annuity.

4. Following the above chart (assuming the structured us funded with New York Life):  At Step 2, New York Life Insurance and Annuity Corporation, the assignment company for New York Life Insurance Company funded structured settlements, takes on the obligation to pay the Plaintiff and then at Step 3, it purchases an annuity from New York Life Insurance Company to fund its obligation. Then, at step 4, It directs the annuity issuer to pay the plaintiff directly or, if applicable, to the plaintiff's trust.

5. Structured settlements may also be funded by obligations of the United States government. In such cases the qualified assignment company will not be a life insurance company.

6. While Massachusetts Mutual Life Insurance Company ("MassMutual") is a life insurance company, it is no longer writing structured settlements. Thus, including them as a "such as" is not correct.

Rocket
Structured Settlements 101. It's not rocket science! 


**as of May 10, 2010 6pm EDT

Posted at 10:04 PM in Baltimore Structured Settlements, Bethesda Structured Settlements, Boston Structured Settlements, Bridgeport Structured Settlements, Bronx New York Structured Settlements, Brooklyn New York Structured Settlements, CT Structured Settlements, Financial Literacy, Misinformation About Structured Settlements, New Jersey Structured Settlements, New York City Structured Settlements, New York Structured Settlements, Newark NJ Structured Settlements, Oregon Structured Settlements, Palm Beach Structured Settlements, Palm Springs Structured Settlements, Portland OR Structured Settlements, Qualified Assignment Company, Qualified Assignments 101, Qualified Funding Asset, Rochester Structured Settlements, Sacramento Structured Settlements, San Diego Structured Settlements, San Francisco Structured Settlements, Santa Monica Structured Settlements, Structured Settlement Flow Chart, Structured Settlement Information, Structured Settlements, Structured Settlements 101 | | Comments (0)

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Guide to Structured Settlements 2024

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  • Top Structured Settlement Annuity Companies 2024
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  • Treasury Funded Structured Settlements
    Treasury Funded Structured Settlements are a settlement option for the most conservative using the OTHER permissible qualified funding asset under IRC 130(d), United States Treasury Bonds in addition to, or instead of, structured settlement annuities. Treasury Funded Structured Settlements can also be used to fund installment sales, also known as structured sales and other non qualified structured settlements.
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  • Structured Settlement Payments | Types of Structured Settlements 2024
    Ways You Can Structure Your Settlement Payments in 2024. With a structured settlement you can have more than one type of payment in a single contract. Different types of structured settlement payments can be customized and combined to meet your needs on a stand-alone basis, or in conjunction with other financial products. Diversify your structured settlement, if you wish, by funding with more than one annuity issuer, with treasury funded structured settlements, index linked structured settlement payments and market based structured .
  • Structured Attorney Fees for Tax Deferral for Attorney Contingency Fees
    Structured attorney fees is a financial strategy that offers a unique way to defer taxes for lawyers and law firms. Lawyers CAN structure their legal fees even if the plaintiff doesn't structure their settlement. There are multiple ways to structure your attorney fees, such as capped or uncapped index linked structured settlement annuities where payments are adjusted based on upside changes in the S&P 500 or another index, Trial Lawyers may also use a special deferred pay/deferred compensation arrangement, if market based returns returns are desired with no cap. Plan NOW for year end! Put structured attorney fee expert John Darer® on your settlement planning team in 2024.
  • Structured Settlement Annuity Company Customer Service Phone Numbers
    Receiving structured settlement payments from your own structured settlement or inherited structured settlement? You'll like this huge time saver. Click the title for a link to a comprehensive list of customer service telephone numbers that includes both current AND former structured settlement annuity issuers and reinsurers. If you have simple bank or beneficiary changes, or if the insurance company that issued the structured annuity has merged, sold or spun off its block of structured annuity business (e.g. Aviva, Allstate, Transamerica, AEGON, GE Capital, Liberty, CNA, Confederation Life), oran annuity issuer has changed its name and you're trying to track them down. Here you go! The list is regularly updated. Last updated May 20, 2024.
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  • What Are Structured Settlement Annuities?
    Structured settlement annuities are annuities that can provide one or more customized annuity payment streams in a single contract. Read about structured settlement annuities here.
  • History of Structured Settlements
    Tracing the roots of structured settlements history from 1918, when Congress exempted damages for personal injury or sickness from income tax, to the establishment of structured settlements as a core personal injury settlement planning tool to the present day.
  • What Are Market Based Structured Settlements?
    Market based structured settlements are an alternative or supplementary structured settlement solution for the plaintiff, attorney or law firm that: 1. Can afford to take some market risk 2. Have discretionary settlement dollars. Claimants and attorneys alike may find that market-based structured settlements provide the opportunity to receive tax-free income, or tax-deferred income, while enjoying growth potential.
  • iStructure |Uncapped Fixed Index Structured Settlement Annuity
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  • Structured Settlements and Longevity Risk| What Are the Odds?
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Qualified Settlement Funds

  • What is a Qualified Settlement Fund?
    Qualified Settlement Funds | What You Need to Know
  • Firmwide Qualified Settlement Funds Debunked
    Firmwide qualified settlement funds have been heavily promoted to trial lawyers, but have been debunked in a detailed analysis in a July 2022 legal opinion a tax partner at the law firm of Faegre Drinker Biddle & Reath, LLP. Trial lawyers and firms who have established Firmwide QSFs or coinsidering establishing a Firmwide QSF should read the analysis as part of their evaluation.

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Structured Settlement Best Practices Corner

  • New York Insurance Advertising law requires the full name of the Insurer to be listed along with the city and state of the principal office. Stating that you represent these fine companies using Insurance company logos without the preceding information are also illegal
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  • Most states require that Testimonials represent the CURRENT opinion of the person who made the testimonial. Be prepared to back it up.
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Why Take a Structured Settlement?

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