by Structured Settlement Watchdog
New Jersey Law Firm Special of the Day is Braised “Leg of Lame”
“Personal injury settlements are typically structured in one of two ways: lump-sum awards, where the beneficiary receives all the funds at once, and structured settlements. Structured settlements are essentially contracts with insurance companies, where the insurer agrees to make regular, ongoing payments, otherwise known as annuities“
Structured Settlement Watchdog comments
- The term “award” derives from Middle English (1250-1300), from the word “awarden.”
- An award is not a settlement.
- A settlement is not an award.
- Settlements are reached through negotiation and require mutual consent, whereas awards are determined and enforced by the court.
- If the “beneficiary” receives all the funds at once in “lump-sum awards”, what is the plaintiff? Chopped liver? Pickled haggis?
- A structured settlement is a form of negotiated settlement which damages are paid in one or more customized streams of future periodic payments Structured Settlements | What are Structured Settlements?
- Typically, a settlement is divided into a portion paid in cash and another portion that is structured.
- In New York, Structured Judgments are established in accordance with New York CPLR 50-A and CPLR 50-B.
- The structured settlement flow chart below illustrates the steps involved in establishing a structured settlement.
10. An annuity is one of the permissible types of “qualified funding asset” under Section 130(d) of the Internal Revenue Code of 1986, as amended.
11. According to NJ Rev Stat § 17B:17-5 (2024)
- “Structured settlement” means an arrangement for periodic payment of damages for personal injuries or sickness established by settlement or judgment in resolution of a tort claim or for periodic payments in settlement of a workers’ compensation claim…
- “Annuity issuer” means an insurer that has issued a contract to fund periodic payments under a structured settlement.
- “Periodic payments” includes both recurring payments and scheduled future lump sum
payments.
13. Individuals cannot purchase structured settlement annuities. While they can enter into agreements with insurance companies for products like life insurance, retirement annuities, health insurance, long-term care insurance, Medicaid annuities, and other insurance options, structured settlement annuities are not available for individual sale. In a rare scenario, a self-insured individual who is a defendant in a lawsuit might have the resources and willingness to assume a contingent liability for the remainder of an annuity contract. However, this is an extreme example. Moreover it is highly probable that a plaintiff would prefer other arrangements, like having New York Life, USAA, MetLife, Pacific Life, or well capitalized and regulated companies stand behind the periodic payment obligation.
As Structured Settlement Watchdog I provide “Bull-oney Detection”, Education and Commentary. I help root out and correct inaccuracy in social media and other online media related to structured settlements, wherever it exists.
Thank you for reading.