The typical structured scheme is as follows: an aggrieved person (the plaintiff) arrives at a negotiated solution of an unlawful act with the defendant (or his insurer) on the basis of a transaction contract which provides, in exchange for the plaintiff`s rejection of the action, an agreement from the defendant (or, more generally, his insurer), to make a number of regular payments.  An applicant who has agreed to a negotiated structured plan chooses to obtain in the future a portion of his reference money at the time of settlement and part of his settlement money through a negotiated and tailored schedule of regular payments that are “fixed and measurable in terms of payment amount and time.”  Life insurance companies that meet these periodic obligations and related qualified transfer companies must comply with the internal income code 130 which, in some cases, does not expedite or modify payments. There are options for structured sellers to sell or transfer the rights to future periodic payments to purchasers of structured settlement rights, most often referred to as settlement-structured entities. Some life insurers, such as the Berkshire Hathaway Life Insurance Company of Nebraska and former structured issuers Allstate Life Insurance Company and Symetra, propose to purchase all or part of the structured settlement rights for a lump sum payment, provided such a transaction complies with CRI 5891.  During the transfer proceedings, the defendant must pay the compensation applicable to the transfer company, after which both parties must sign a qualified single transfer agreement. In the more rarely unassigned case, the defendant or claims/accident insurer retains the obligation to pay periodically and finances it by acquiring an annuity from a life insurance company, which means that its liability is linked to a corresponding asset. The payment flow acquired under the pension corresponds exactly to the time and amounts of periodic payments agreed in the billing agreement. The defendant or the Insurance Corporation in kind and in the event of an accident holds the pension and designates the applicant as the beneficiary of the pension, which orders the issuer to make payments directly to the applicant. One of the reasons why an unassigned case is less popular is that the obligation is not really taken from the books and that the defendant or accident insurer retains potential liability. While a default is rare, potential liability has come into play with the liquidation of the Executive Life Insurance Company of New York.  Some annuitants have suffered deficits and a number of debtors at the wrong end of unatcalated cases have made the difference.
The defendant or the claim/accident insurance normally cedes its obligation to pay periodically to a third party through a qualified assignment (“ceded case”).  A classification is considered “qualified” if it meets the criteria of Section 130 of the internal income code.  The characterization of the assignment is important to outgoing firms, because without them, the amount they collect to induce them to accept regular payment obligations would be considered income for federal tax purposes. However, if an assignment is qualified under Section 130, the amount received is excluded from the proceeds of the divestment company.