by Structured Settlement Watchdog
Structured settlement broker Bridge Settlement Corporation poses the "mandatory" question "Have you purchased a structured settlement before?" on the structured settlement quote form posted on its web site.
This motivates me to write this post as it deserves clarification.
Perhaps the question posed by Bridge Settlement Corporation is targeted to an assignment company that has previously purchased a structured settlement (unlikely), or the trustee of a qualified settlement fund (maybe), or even a self insured defendant corporation, municipality or other government entity (maybe), or an investor seeking to purchase structured settlement payment rights (definitely not, based on disclaimer that appears on Bridge Settlement Corporation's web site).
To the professional layman it appears that the Bridge question is targeted to plaintiffs browsing on the Internet. The thing is… plaintiffs cannot purchase structured settlements!
An explanation of the structured settlement process
- Plaintiff and the Defendant, its Insurer, or the trustee of a qualified settlement fund agree on a stream (or streams of structured settlement payments into the future as part of the consideration for the release of claims made to settle the claim (or suit, if one has been filed).
- The obligation to make the future payments is assigned to a qualified assignment company, subject to IRC 130(c). Funding goes from the Defendantor its insurer to the qualified assignment company.
- Subject to IRC 130(d), a qualified funding asset is purchased. The actual structured settlement annuity is commonly purchased by a qualified assignment company or, in the rare case the obligation to make payments is unassigned, the Defendant, Defendant's insurer on a "buy and hold" basis
- The Plaintiff does not write a check to consummate the purchase. If they did it, they would be in receipt of the settlement proceeds and would not be a able to enter into a structured settlement!
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