What does a Structured Settlement Broker do?
A structured settlement broker, also known as an annuity broker, is a professional specifically trained in negotiating and facilitating a payout schedule for a monetary settlement awarded to an individual or family as the result of a lawsuit. The settlement typically stems from an injury due to negligence, and a compensation amount is agreed upon by both parties to settle the case without resorting to a jury trial. Structured settlement payments are treated differently from regular income pursuant to U.S. Congressional legislation passed in 1982, which declared these payments free of Federal and State tax liability.
Structured settlement brokers are responsible for setting up the payout schedule of the settlement, arranging for periodic increases or advances against the settlement in the event an unexpected expense incurs, and determining the medical costs that the injured party will be burdened with on an ongoing basis, such as expenses associated with physical therapy, home nursing, medications, and cost‑of‑living increases expected over the lifetime of the recipient.
To qualify as a structured settlement broker, one must be licensed or authorized to perform duties on behalf of at least one insurance company, be insured by an Errors and Omissions policy or its equivalent, and meet the minimum qualifications set by Regulation 28 CFR 50.24 of the Department of Justice. An individual with a felony conviction or whose insurance license has been revoked is not eligible for consideration.
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