Editing Structured settlement (section)

====Assigned cases====
The defendant, or the property/casualty insurance company, generally assigns its periodic payment obligation to a third party by way of a qualified assignment ("assigned case").<ref>{{cite journal|last1=Wagner|first1=Wayne|title=Negotiating a Structured Settlement|journal=GPSolo|date=July 1999|volume=15|issue=3|url=https://www.americanbar.org/newsletter/publications/gp_solo_magazine_home/gp_solo_magazine_index/wagner.html|accessdate=5 September 2017}}</ref> An assignment is said to be "qualified" if it satisfies the criteria set forth in Internal Revenue Code Section 130.<ref>{{cite web | url=https://www.law.cornell.edu/uscode/text/26/130 | title=26 U.S. Code § 130 - Certain personal injury liability assignments | publisher=Legal Information Institute | accessdate=20 May 2015}}</ref> Qualification of the assignment is important to assignment companies because without it the amount they receive to induce them to accept periodic payment obligations would be considered income for federal income tax purposes. If an assignment qualifies under Section 130, however, the amount received is excluded from the income of the assignment company. This provision of the tax code was enacted to encourage assigned cases; without it, assignment companies would owe federal income taxes but would typically have no source from which to make the payments.

The qualified assignment company receives money from the defendant or property/casualty insurer, and in turn purchases a "qualified funding asset" to finance the assigned periodic payment obligation.<ref>{{cite journal|last1=Nowotny|first1=Gerald R.|title=Tax Law: Contingency Fees and Structured Settlement Annuities|journal=GPSolo|date=January 2013|volume=30|issue=1|url=https://www.americanbar.org/publications/gp_solo/2013/january_february/tax_law_contingency_fees_structured_settlement_annuities.html|accessdate=5 September 2017}}</ref> Pursuant to IRC 130(d) a "qualified funding asset" may be an annuity or an obligation of the United States government.

In an assigned case, the defendant or property/casualty company does not wish to retain the long-term periodic payment obligation on its books. Accordingly, the defendant or property/casualty insurer transfers the obligation, through a legal device called a qualified assignment, to a third party. The third party, called an assignment company, will require the defendant or property/casualty company to pay it an amount sufficient to enable it to buy an annuity that will fund its newly accepted periodic payment obligation. If the claimant consents to the transfer of the periodic payment obligation (either in the settlement agreement or, failing that, in a special form of qualified assignment known as a qualified assignment and release), the defendant and/or its property/casualty company has no further liability to make the periodic payments. This method of substituting the obligor is desirable for defendants or property/casualty companies that do not want to retain the periodic payment obligation on their books. A qualified assignment is also advantageous for the claimant as it will not have to rely on the continued credit of the defendant or property/casualty company as a general creditor. Typically, an assignment company is an affiliate of the life insurance company from which the annuity is purchased.