Structured Annuities: Shelter from the Financial Storm

STRUCTURED ANNUITIES: SHELTER FROM THE FINANCIAL STORM – Critical that plaintiffs get advice from experts working solely for plaintiffs

Given the current state of our economy, and specifically the recent troubles of large institutions, FORGE Consulting is releasing the following guidelines to address how these events impact settlement-planning issues. Most importantly, we want to answer one specific question – is a structure still a “safe” settlement option?

As we sit here today, the answer is “yes.” Not only is it safe, it’s probably more crucial than ever before for a plaintiff to consider. The body of law that establishes structured settlements, and creates the public policy to incentivize the use of them, expressly limits the type of assets that can be utilized in a structured settlement to only annuities and U.S. Federal Treasuries. There is a reason why our congressional leaders so narrowly restricted what your injured citizens could rely upon and why it’s been law since 1983. In light of today’s financial uncertainty, it’s even more important to consider an allocation to a structured settlement annuity.

Why are structured settlements so inherently safe? Because they are insurance policies regulated by each state. Most states have secure consumer protection laws that regulate life insurance companies, providing an exceptionally strong safety net. Plus, the marketplace is flocking to bonds and treasuries, which comprise a majority of life insurers’ investments. The National Structured Settlement Trade Association (NSSTA) reports, “Life insurers in the United States hold almost 75 percent of their assets in long-term bonds and less than 4 percent in equity securities.”

According to Brett Arends of the Wall Street Journal, when a company has troubles on Wall Street, that doesn’t necessarily mean it will affect individual policyholders (and people with structured settlements): “There are … legal firewalls between the crisis you hear about on the news, and your … policy,” Arends explains. “The assets of those subsidiaries are regulated, and are walled off from the troubles of the parent company.”

The considerable strength of these regulations was echoed by Sandy Praeger, National Association of Insurance Commissioners (NAIC) President, in a September 16 press release. “It is a state insurance regulator’s responsibility to protect policyholders and ensure a healthy, competitive market for insurance products,” Praeger states. “Strict solvency standards and keen financial oversight – based on conservative investment and accounting rules – continues to be the bedrock of state-based insurance regulation.” The power of state insurance regulation isn’t hypothetical. It’s been tested and proven throughout history, such as the reorganization of Executive Life of California in the mid-1980s. We think this is proof positive that structured settlement recipients have protections.

In the face of what’s happening in the news, it’s essential that plaintiffs receive advice from an expert who can allocate towards a structure and the inherent protections it provides. Regardless of whether FORGE was involved in your case or not, don’t hesitate to contact us with your structured settlement questions and concerns. In this financial climate, being responsive to plaintiff lawyers, their organizations and their clients is what we are all about. “Getting this kind of expertise from a structured settlement firm that works exclusively for plaintiffs is vital,” said John Bair, Forge President.

Forge Consulting LLC is a national settlement consulting firm specializing in settlement advice to any trial lawyer or plaintiff in the country. Learn more at or contact Forge at [email protected]

John Bair
[email protected]
Direct line – 716.864.8917

Charles Schell
[email protected]
Direct line – 706.244.0420

Spooner Phillips
[email protected]
Direct line – 706.244.3089

Howard Saperston
[email protected]
Direct line – 716.481.6658

Michael Gunn
[email protected]
Direct line – 803.233.3666

Cory Phillips
[email protected]
Direct line – 706.244.0762