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1Feb/13Off

Liberty Mutual will split settlement payments

sell settlement payments The calendar has turned the page onto a new month.  Along with colder weather, February is bringing Great News from Liberty Life Assurance Company of Boston, "Liberty Life".  Effective today any structured settlement annuity transfer will not be subject to servicing agreements.

That is Liberty mutual will begin splitting the payment stream.   All structured settlement factoring transactions that are subject to IRC 5891 and approved by a state court, will not only receive a lump sum, but will keep their unsold portions coming to them by the annuity issuer.

The process of “servicing” a structured settlement payments arises  when a structured settlement seller enters into a transaction assigning/selling some of their future payments and decides to only sell a portion of his/her annuity.   Often that is selling a portion of a monthly payment stream or a portion of a lump sum.  For example, before February 1st, 2013 if a structured settlement payee decided to sell $500 a month from a $1,000 a month payment stream to a structured settlement purchaser for the next 15 years, the purchaser would receive the full monthly check ($1,000) from the annuity issuer and then be responsible for processing the check and sending to the payee the unsold amount or $500.

Often issues arise when a servicing agreement is in place.  Some of these issues are a lack of transparency from the annuity purchaser to the seller about the process of servicing payments, a delay in receiving their monthly check, and in some instances the inability to receive a truly competitive offer.

To those annuitants who have policies with Liberty Mutual and Liberty Life Assurance Company of Boston and are considering selling some of their structured settlement annuity, you are in the clear.

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Posted by maureen