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Christopher R. Nicholls' NC Trial Lawyer Blog posted a Millennium Settlements sales piece by Bryan Milner on or about September 16, 2008. It still appears today. This author acknowledges that the spirit of the piece was pure, the inaccuracies however, bring its continued posting by both the NC Trial Lawyer Blog and Millennium Settlements (linked at Bryan Milner bio) into question.

Here's an excerpt:

"Q:  If the life insurance company holding my annuity fails, what happens to my structured settlement?   

A:  The insurance companies are subject to regulations that require them to have assets set aside and earmarked solely for the purpose of meeting their obligations to policyholders .  Even in bankruptcy, these funds are not touchable, and would still be there for the purpose of honoring their commitments.   In addition, each life company that offers structured settlement annuities provides a guarantee from their holding assignment company that the scheduled payments will be made to the claimant.  A document with the details of the guarantee are included in each structured settlement annuity policy. "

Comments

If there is a structured settlement the life insurance company is not "holding" the annuity, nor is the assignment company its holding company. If your structured settlement involved a "qualified assignment"  and is funded with an annuity, THEN the annuity is "held" or "owned" by the qualified assignment company. If your structured settlement did not involve a "qualified assignment" THEN it is owned by the defendant or the defendant's insurer. Click for details of the structured settlement process, including a structured settlement flow chart/diagram

When there is a qualified assignment the defendant or its insurer's obligation to make periodic payments to you or your client is transferred to the qualified assignment company. This is done with your consent and knowledge and should be reflected in the settlement documents It's important to note that with a few exceptions the qualified assignment company is a special purpose entity that only holds annuities funding the periodic payment obligations it has assumed. Thus the putative value of a putative "guarantee" from the "holding assignment company" is worthless.

In the case of New York Life Insurance Company structured settlements the qualified assignment company is an actual insurance company. It is the only one. Its assumed obligations under qualified assignments are further guaranteed by the annuity issuer, New York Life Insurance Company.

All but four of the currently writing annuity issuers of stuctured settlements have a guarantee of the qualified assignment company by the annuity issuer.

1. The assumed obligations of American General Life's qualified assignment company are guaranteed by AGC Life Insurance Company, an upstream holding company
2. The assumed obligations of Pacific life and Annuity Company's qualified assignment company are guaranteed by Pacific Lifecorp, an upstream holding company
3. The assumed obligations of Allstate Life Insurance Company of New York's qualified assignment company are guaranteed by Allstate Life Insurance Company
4. The assumed obligations of American International Life Assurance Company of New York's qualified assignment company have no guarantee.

The same postings include a discussion about state guaranty funds. There is a strict prohibition against insurance agents using the existence of state guaranty funds in any solicitation for insurance, including structured settlements which, when funded with an annuity, are a form of insurance.