Structured Settlements 4Real®Blog 2026

Non-qualified assignment companies are commonly used for structured settlements involving taxable damages, because taxable damages do not qualify under the IRC 130 exclusion used by qualified assignment companies.

A qualified assignment or non-qualified assignment is part of the establishment of the majority of structured settlements because the funding defendants or insurers want finality instead of a long tail periodic payment obligation that exceeds the cost of the structure. The IRC 130 exclusion only applies to periodic payment of damages for personal physical injury, physical sickness, wrongful death, or workers compensation [i.e. damages that qualify for the tax exemptions afforded under IRC 104(a)(1) and 104(a)(2)]. Wrongful incarceration settlements, that represent damages excludable under IRC 139F, may be funded with structured settelment annuities, however the IRC 130 exclusion does not apply and must be completed by way of a non qualified assignment,

At the time of original posting non-qualified assignment companies were located outside the United States, typically in Barbados or Ireland. For a brief period of time there was also one in Bermuda.  When this post was updated, a few domestic non-qualified assignment companies are available but there is still a robust need for non-domestic companies, particularly in the following circumstances:

1. Non-qualified assignment where the start date for payments is more than one year from funding  (e.g. 55 year old claimant wants payments to begin at age 65 to fund lost pension differential in an employment case). It should be noted that American General and United States Life Insurance Company offer a fixed funding agreement funded periodic payment option with a domestic assignment company that permits a start date of longer than one year. A funding agreement is not an annuity and thus avoids the constraints of IRC 72(u).
2. Payments are not subtantially equal and do not qualify under IRC 72(u)
3. An uncapped index linked structured periodic payment funding annuity is desired

In the video below, structured settlement expert John Darer discusses when to consider the use of Non-Domestic Assignment Companies with structured settlements and periodic payment settlements.