A structured settlement payee selling the annuity funding their structured settlement payments to a factoring company or investor would be a neat party trick, since not a shred of it is possible.
Yet here's what appeared on a mistaken Orange County California structured settlement broker's website (as of March 15, 2023)
- Individuals with structured settlements do not own the annuities that fund their structured settlements. They cannot sell what they do not own.
- Structured settlement annuities are generally owned by qualified asssignment companies or non qualified assignment companies.
- In the less common buy and hold cases, the buying and the holding is by the Defendant or its insurance company.
What California SB510 actually says
What IRC §5891 actually says
I.R.C. §5891(a) Imposition Of Tax —
Bad information from members of the Primary Market begets more bad information
Consumers deserve the clearest pathway to accurate information about structured settlements. Here are two recent blog posts reporting how investments in structured settlement payment rights have been mischaracterized and/or misrepresented as annuities in online advertising to investors:
Why Does NJ Insurance Agency Claim Secondary Market Annuities Involve POLICY transfers? - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and John Darer Reviews (typepad.com) September 27, 2023