Prudential announced that effective December 21, 2010 it will triple the fee it charges for accepting qualified assignments through its subsidiary Prudential Assigned Settlement Services Corporation (“Passcorp”). A qualified assignment is an important step in the typical structured settlement transaction for both plaintiffs and defendants and is governed by Internal Revenue Code Section 130.
The role of a Qualified Assignment in a Typical Structured Settlement
The following flow chart shows where a qualified assignment fits into a typical structured settlement transaction. See Steps 2 and 3..
With annuity funded structured settlements, a qualified assignment company is typically a subsidiary of the life insurance company that issues the structured settlement annuity. All of the major active qualified assignment companies charge modest assignment fees. As you can see from the following survey, Prudential’s qualified assignment fee now slots in at the top of the scale along with MetLife and New York LIfe which have charged a $750 fee for as long as I can recall.
Survey of Qualified Assignment Fees charged (as of December 21, 2010)
$750
The Prudential Insurance Company of America
New York Life Insurance Company
Metropolitan Life Insurance Company
$500
John Hancock Life Insurance Company (USA)
John Hancock Life Insurance Company of New York
American Internaional Life Assurance Company of New York
American General Life Insurance Company
Symetra Life Insurance Company
Allstate Life non qualified, via Allstate International Assignments, Ltd.
Liberty Life non qualified, via Barco Assignments, Ltd.
$300
Liberty Life Assurance Company of Boston
$250
Allstate Life Insurance Company/ Allstate LIfe Insurance company of NY
Pacific Life and Annuity Company
The amount of the assignment fee should not be a major factor in choosing between companies to fund structured settlements. Sometimes companies with the highest assignment fees more than offset the cost with the most competitive rates.
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