by John Darer ® CLU ChFC MSSC CeFT® RSP CLTC
What is a qualified assignment?
A qualified assignment is a transfer of a contractual obligation to make future periodic payments under a settlement agreement, which satisfies the 
requirements of Internal Revenue Code (IRC) §130. In a structured settlement agreement the original obligor (the defendant, insurance carrier for the defendant, or the trustee of a IRC 468B qualified settlement fund, assigns its obligation to make the future periodic payments defined in the settlement agreement to a “qualified assignment company”.
Only payments which represent damages for personal injury, physical sickness, wrongful death and payments for workers compensation may be assigned by way of a qualified assignment.
Generally a qualified assignment company is a special purpose company, which does little more than hold an annuity or United States Treasury obligations as a “qualified funding asset” to back up the obligations it assumes from Defendants, Insurers or qualified settlement fund trustee. A qualified assignment company may actually be an insurance company itself. When an annuity is used as a qualified funding asset, the qualified assignment company is usually related to the life insurance company issuing the structured settlement annuity. In such cases, the qualified assignment company typically purchases an annuity from the related life insurance company as a qualified funding asset pursuant to IRC 130(d).
A qualified assignment requires the plaintiff’s consent.
The answer to the question “what is a qualified assignment” should be fundamental knowledge to ALL competent structured settlement consultants and users of structured settlements. It is a pity to see misinformation occasionally posted on the websites of some settlement consultants, or others, which state incorrectly (see below) that the qualified assignment is “to a financially secure insurance company”, or “an assignment to the life company”.
To wit… “From the plaintiff’s perspective, an assignment to a financially secure insurance company gives them the assurance that future payments will be made as promised. For many plaintiffs, this assignment to the life company alleviates the stress of future contact with the defendant, their insurer, or any party responsible for the injury”- quote from the website of a veteran settlement consultant at time of original publication.
Of the primary companies offering structured settlements only the qualified assignment facility used by New York Life (New York Life Insurance and Annuity Corporation) is an insurance company. The qualified assignment companies of United States Life Insurance Company in the City of New York (including the former American International Life Assurance Company of New York), American General Life Insurance Company, American National Insurance Company, Athene Life & Annuity Company, Berkshire Hathaway Life Insurance Company of Nebraska, Independent Life Insurance Company, Pacific Life Insurance Company, Pacific Life & Annuity Company, Metropolitan Life Insurance Company, Metropolitan Tower Life Insurance Company, The Prudential Insurance Company of America, United of Omaha Life Insurance Company and Puritan Life (i.e. the majority) ARE NOT life insurance companies or even insurance companies for that matter**.
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What is a Qualified Assignment? Why Most Insurers Won;t Schedule Without One
Last updated October 13, 2025
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