by Structured Settlement Watchdog
The following is a direct quote from the website of a member of the Registry of Settlement Planners Board that is inaccurate:
"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." from website of Settlement Professionals, Inc. West Linn, Oregon , as of October 16, 2010.
First of all, SPI misinforms the reader by implying that the assignee and the life insurance company are one and the same.
Following is a flow chart which explains how a structured settlement works
FACT: Generally, qualified assignment companies are special purpose companies not life insurance companies.
As you can see from the above chart, after the obligation to make payments is assigned to the qualified assignment company in step 2, the qualified assignment company purchases a structured annuity from a life insurance company as a "qualified funding asset". Of the current structured settlement annuity writers only the assignee where a New York Life Insurance Company annuity is used as a "qualified funding asset" is a life insurance company. Moreiver, MassMutual has not offered structured settlements for several years. Even when they did the qualified assignment company was not a life insurance company.
I am embarrassed as a Registered Settlement Planner ("RSP") that a member of the RSP board, that passes judgment on those seeking the RSP professional designation (a professional designation that I respect and worked hard to achieve) has failed to accurately articulate a foundational structured settlement concept (i.e. "Structured Settlements 101").
Frankly it doesn't matter if you frame yourself as "plaintiff loyal", "plaintiff exclusive", "plaintiff-centric", a centrist or defense oriented if your information isn't good.