by John Darer CLU ChFC MSSC CeFT RSP CLTC
This post presents critical information
For
- Companies marketing Structured Settlement Receivables Directly to Potential Investors
- Intemediaries of the above companies who market Structured Settlement Receivables to potential investors, includuing retirees, injury victims and personal injury lawyers
- Professional Liability insurers of intermediaries. Are you asking about such activity on your applications or is such activity expessly excluded from coverage? Are you paying defense costs on claims under such products?
- Settlement Planners who dabble (or have dabbled in the secondary or tertiary market) in the past or are currently doing so.
- Judges and Guardians-Ad-Litem who could be petitioned or asked to evaluate an investment for a minor in a proceeding that requires court approval.
If you are a plaintiff, guardian of a plaintiff in a personal injury or worngful death case and you are not being pitched to buy someone else’s structured settlement payments there is no need to read this post unless you are curious about the subject.
Acquired Structured Settlement Payment Rights Are Not Annuities or Insurance Products
Investors ARE NOT buying annuities. Despite what might be (or have been) falsely depicted by salespeople, acquired structured settlement payment 
rights are not annuities or insurance products.
Ginned up by a misleading sales pitch, acquired structured settlement payment rights (structured settlement receivables) may have been sold to Mom and Pop investors, personal injury attorneys and their clients, lampooned as annuities when other interest rates were declining in the decade plus following the Great Recession of 2007-2009. But the fact that there is evidence of the marketing of such investments as ‘a structured structured annuity solution’ to injury victims and their lawyers beginning in at least September 2011, by a settlement planner no less, despite subsequently admitting in writing that such investments are “not a regulated insurance product”, should be troubling to financial professional liability insurers as well as investors.
- 80% of US states have already adopted the 2017 Revisions to the Life & Health Guaranty Association Model Act (#520), which expressly excludes acquired structured settlement payment rights under state insolvency schemes. Potential investors and financial advisors should make serious note of this.
- Check the definion of ” Annuity” under state law. Hotbeds like Florida and California do not include structured settlement receivables in their definitions. It is important to review your state’s or your insured’s state definition before making recommendations, offering advice, or, as an insurer, making informed decisions about whether to include or explicitly exclude them from coverage. It is reasonable to question why any competent individual with an insurance license would use the term in 2025—such usage could stem from ignorance or something more nefarious, both valid reasons to reconsider business relationships. In a SuttonPark era, with embers still smoldering, it’s a new ball game.
- The National Association of Insurance Commissioners (NAIC) has opined in its Statutory Issue Paper No. 160 (finalized April 6, 2019) that acquired structured settlement payment rights are not annuities or insurance products.
Advice concerning the acquistion of structured settlement receivables may be EXCLUDED from financial professional liability insurance
Think about it. Why should Professional Liability Insurers cover non insurance products in a sub-industry where there is little to no regulation of sales practices in the United States? There is no test of even basic competency in structured settlement receivables. Someone with a lifetime ban from FINRA is selling these investments to investors.using insurer logos!
Why would a professional liability insurance company cover a known fraud?
- What properly informed professional liabllity insurance underwriter wants to undertake a risk when consumers are being pitched structured settlement receivables by potential insureds under the fraud that some individual has sold a structured settlement annuity and what the investor is buying is a structured settlement annuity?
- Since virtually all structrued settlement annuities are owned by qualified assignment companies and that ownership in the annuity does not change in the event of a transfer of structured settelment payment rights. It remains owned by the qualified assignment company..
- No investor can truly purchase a structured settlement annuity unless they are a self-insured defendant willing to back an annuity issuer, and the plaintiff agrees to that arrangement, accepting the role of a general creditor of the defendant instead of potentially being a secured creditor of a qualified assignment company..
- The unpacking of the SuttonPark Nightmare, gutted open the underbelly of the then largest structured settlement paymenht servicer and which while is still not over, demonstrates that investors are not 100% safe. where payment servicing is involved.
The reckless lack of regulation of sales practices in the segment continues to amaze.
Last updated April 9, 2026