Lawyers and structured settlements: what should a lawyer do for clients in the AIG crisis?
Judicial Endorsements and Down Ticket Races in North Carolina

Q & A for Lawyer's Clients about Structured Settlements and the AIG Problem

If you are a lawyer who sometimes helps your clients with settlements by recommending a structured settlement (annuity) the shake up of AIG should be a topic of conversation. 

I emailed one of my friends, Bryan Milner, who is a structured settlement broker and gave him a Q & A on questions I anticipate my clients will be asking about future (and past) structured settlements.  I thought this would be helpful for anyone who may be looking at a structure in the near future. 

Here are the answers to my questions from Bryan.

Alleviating Structured Settlement Fears- Q & A

My client is considering a structured settlement but the situation with AIG has them (and me) worried about the safety of an annuity investment.  Here are some of the questions I anticipate:

Q:  If the life insurance company holding my annuity fails, what happens to my structured settlement?

A:  The insurance companies are subject to regulations that require them to have assets set aside and earmarked solely for the purpose of meeting their obligations to policyholders .  Even in bankruptcy, these funds are not touchable, and would still be there for the purpose of honoring their commitments.   In addition, each life company that offers structured settlement annuities provides a guarantee from their holding assignment company that the scheduled payments will be made to the claimant.  A document with the details of the guarantee are included in each structured settlement annuity policy.   

Q: Are some "types" of structured settlements safer than others? 

A: Safety is based solely on the ability of the issuing life insurance company to pay claims.  Settlement annuities, and annuities in general, are well capitalized and regulated in efforts to help ensure the safety of the industry as a whole.  Pay attention to overall ratings and creditworthiness of the company you choose.

Q: Are Structured settlements "insured" or guaranteed by someone other than the company issuing them?

A: All states have a Guaranty Association Act.  The Act states that in the event that a member insurer, who is licensed to sell annuities in that particular state, is ordered to be liquidated by a court, the Guaranty Association Act enables the State Guaranty Association to provide protection up to a certain amount for its residents who are holders of annuity policies with the solvent insurer.   For example in North Carolina, the State Guaranty limit is $300,000.   

Q:  What is a qualified assignment?  And does it help protect the annuity? 

A:  The key word in Qualified Assignment is the word "Qualified".  It simply means that the assignment procedure, if done correctly, will allow benefits to "qualify" for beneficial tax treatment under 104(a)(2).  As far as the protection aspect, in most cases, the assignment company is a smaller affiliated company of the parent company that issued the actual annuity contract.  Again, in most cases, the assignment company's only assets are the settlement annuities that it owns.  There are no other prospective creditors that could have a claim on the assets of the assignment company.  It serves as a way of separating away from the parent's general creditors.  You can also consider a "secured creditor" status with many of the issuing life companies.  That level of security puts your policy higher up on the food chain when compared to a general creditor for payback if the issuing company fails and has to be liquidated.  A specialized Uniform Qualified Assignment and Release and Pledge from the life company would need to be signed at the time of settlement. 

Q:  If I have a structured settlement with Insurance Company A, can they "sell" my annuity to Insurance Company B like mortgage companies do?  Can Insurance Company B sell it to other companies? 

A: No.

Q:  If I already have a structured settlement, is there anything I can do to make it "safer?" 

A: No.  The settlement annuities are so well capitalized and reserved at the highest levels, we believe they are as safe as they can possibly be.  Regulatory agencies and state insurance departments have dramatically increased the reserve levels to help ensure the safety of annuities. 

Q:  Is it possible to "split" annuities among different companies to spread risk?  Would that also help to keep the annuity amount "under" the maximum coverage provided by the NC Guaranty Fund?

A: Yes, it is possible to "split" the settlement amount into different life companies for the structured settlement in order to stay under the $300,000 limit for the North Carolina Guaranty Association Act. 

Q: Historically, have any other annuity companies failed and left customers with nothing?

A: Not in the settlement industry.  Executive Life was the only carrier writing settlement annuities (back in the late 80's and early 90's) that went into receivership.  When they went into receivership the courts treated settlement recipients at a higher level since their money with Executive Life was "Settlement" money, not a traditional investment.  The courts instructed Executive and the assignment companies to pay 100% on the dollar for the remainder of all policies.  It was unfortunate that we had to experience that event (the Executive collapse) but it did show that the safety systems in place had the support of the court(s) and allowed settlement recipients to be made whole without interruption. 

Answers from:

Bryan Milner
Settlement Planner
Milner Plaintiff Services
an affiliate of Millennium Settlements
toll free:  877-212-9990
cell:   818-926-5100
fax:   818-302-1414

Questions by:
Christopher R. Nichols, Attorney
Nichols Law Firm
Raleigh, NC 27609
800-906-5984 (toll free) and 1.800.906.5984


Feed You can follow this conversation by subscribing to the comment feed for this post.

Ann LeBlanc

Is there a chance the defendant insurer who paid the settlement funds for a structured settlement would end up paying twice if the annuity insurer goes into bankruptcy? Paragraph 9 of the standard Qualified Assignment Agreement concerns defendant insurers paying settlements in this economy.

structured settlement broker

You need court order before you can sell structured settlement.

Structured Settlements

This whole conversation is best for us to obtaining information about the structured settlement. Now a days people are preferred to invest in structured settlement. This blog is best for the getting information. I am really a glad to become part of your community.


This is some juicy information. Great read!

Rebekah Snodgrass

I found this Q and A session to be very informative. This session informed of so much. I had no idea that structured settlements could be split between two companies. You made structured settlements a little easier for me to understand.

about annuities

Great information easy to read and understand!


There is so much information offered here. I agree with Rebekah about not knowing that these settlements could be split between two companies. It would seem that this would be a great option to have in that process.

Ed Butowsky

A lot of very helpful information on this page.

Ed Butowsky

I agree, helpful information indeed. :)

Diligent approach in terms roofing prices of return on investment. As with Rake Edge and Drip Edge, some Building codes require Leak Barriers to be installed, they will explain the manufacturer's warranty on materials to you in detail. Without a roof deck installed on your home, the color should be more neutral.

facebook hacking generator download

Thanks , I have recently been looking for information approximately this topic for ages and yours is the best I have came upon so far. However, what about the bottom line? Are you sure about the source?

credit score calculator

Comparing auto insurance quotes side by side comparison of different plans they provide. What is going to be a convenient way to get your license. These can be expensive. If you can park your car in case it is stolen and in addition to competitive if not better than average auto insurance rates, and car insurance kentucky an attorney to help you with those. If you can follow certain criteria, but that you may not have any insurance cover, the cost of insurance, the agent would actually ask you some questions regarding your school or work place.

home business

Hi there, just wanfed to say, I liked this article. It was helpful. Keepp on posting!

read this article

Simply want to say your article is as astonishing. The clarity to your post is just excellent and that i could suppose you are a professional in this subject. Well together with your permission allow me to snatch your RSS feed to keep up to date with approaching post. Thank you one million and please continue the enjoyable work.


Pretty nice post. I just stumbled upon your blog and wanted to say that I've really enjoyed surfing around your blog posts. After all I will be subscribing to your feed and I hope you write again very soon!

building and pest inspections brisbane

Howdy! Do you use Twitter? I'd like to follow you if that would be ok. I'm undoubtedly enjoying your blog and look forward to new posts.

gold coast carpet cleaning

Every weekend i used to visit this site, for the reason that i want enjoyment, for the reason that this this web page conations really good funny stuff too.


Hi there, after reading this amazing piece of writing i am also delighted to share my familiarity here with mates.


Type car insurance jackson mi of coverage and cost. However, car insurance jackson mi not all of them may suit your requirements or your budget. Shop early while you still have a lien on it. Stop paying high insurance amount to desire to live in the United car insurance jackson mi States and Canada and still have the same kind of car insurance and home insurance policy. Those with a long commute - Long commutes generally increase the potential for cash accumulation.

Generateur De Code Psn

The idea of an important subscription-based premium service would mean that the gamer have to pay some sort of fee to obtain certain features on any PSN network. I'm not saying there aren't other great games out there that have been made by Capcom, but for goodness sake. Adding that as well as newer 3D models and better background renders would be great.

my review here

You or your coach can set it to deliver a preprogrammed drill, delivering a range of typical shots. Failing to make a legal return results in losing the point to the opponent. No excuses that we cant get the best tennis equipments anymore.

Scott Winters


The comments to this entry are closed.