structured settlement annuity companies

Quick answer: Structured settlement annuity companies are typically life insurance companies that issue court-approved, tax-advantaged annuities to fund long-term injury settlements.

Major U.S. issuers have included Pacific Life, MetLife, New York Life, Prudential, and Berkshire Hathaway Life, but availability changes; verify current issuer status through the insurer, broker, or state insurance department.

Structured settlement annuity companies are life insurers that issue annuity contracts funding court-approved or negotiated injury settlements with scheduled future payments.

They differ from settlement purchasing companies, which buy payment rights at a discount. Major issuers are typically evaluated by financial strength ratings from agencies such as AM Best, S&P Global Ratings, Moody’s and Fitch.

Readers should verify any insurer’s current rating, state licensing and contract terms with primary sources before relying on payments for medical care, housing or long-term income.

How structured settlement annuity companies work

A structured settlement annuity company is usually the life insurer that issues the annuity used to fund a settlement.

In a typical personal injury case, the defendant or its insurer settles the claim, then transfers the payment obligation to a qualified assignment company under Internal Revenue Code Section 130.

The annuity issuer funds that obligation by sending scheduled payments to the injured person over time.

The structure starts with a settlement agreement. That agreement states the exact payment stream, such as monthly income, future lump sums, or both. The defendant does not usually keep paying from its own balance sheet after assignment.

Instead, a qualified assignment company assumes the obligation.

Section 130 of the Internal Revenue Code allows that assignment in qualifying cases.

And Section 104(a)(2) is the federal tax rule commonly cited for excluding damages received on account of personal physical injuries or physical sickness from gross income, according to the Internal Revenue Service and the U.S.

Code.

Key rule	What it does	Source
26 U.S.C. § 130	Lets a qualified assignment company assume periodic-payment obligations in a structured settlement.	U.S. Code, Cornell Legal Information Institute
26 U.S.C. § 104(a)(2)	Provides the federal tax exclusion framework for qualifying physical injury or sickness damages.	U.S. Code, Cornell Legal Information Institute
26 U.S.C. § 5891	Imposes a 40% federal excise tax on certain structured-settlement transfer deals that lack a qualified court order.	U.S. Code, Cornell Legal Information Institute

The annuity issuer then invests its general account assets and promises the payment schedule in the contract. That matters because the claimant usually relies on the insurer’s claims-paying ability, not a segregated customer account. A.M.

Best, S&P, Moody’s, and Fitch ratings are often reviewed for that reason.

Payments can be highly customized. The National Structured Settlements Trade Association says structures can provide immediate payments, deferred payments, lifetime income, and periodic lump sums, depending on the settlement terms.

Once issued, the payment schedule is difficult to change without a sale process and court approval in most transfer situations.

If a payee later wants cash now, a factoring company may offer to buy some future payments at a discount. That buyer is not the annuity issuer.

In many cases, a state structured settlement protection act requires court approval, and federal tax law adds the 40% excise-tax consequence for noncompliant transfers under 26 U.S.C. § 5891.

• The annuity company issues the contract and funds the stream.
• The assignment company takes over the legal payment obligation.
• The claimant receives scheduled payments set in the settlement documents.
• A transfer buyer, if involved later, is a separate company with separate economics.

Caution: Do not rely on a summary alone before changing or selling payments.

Tax treatment, court approval rules, and insurer protections vary by case and state, so check the settlement documents, the annuity contract, and the controlling state statute or court order.

Major structured settlement annuity providers in the US

Structured settlement annuities are usually issued by large life insurers or by life insurers tied to a qualified assignment company.

Size alone does not make one provider “best.” The key checks are claims-paying strength, capital, and whether the exact issuing insurer matches the settlement documents.

Readers should verify the current issuer name and ratings before signing. Ratings can change, and the annuity owner, payee, and assignment company may be different legal entities.

Provider group	Common structured settlement issuer name	Selected financial strength facts
Berkshire Hathaway	Berkshire Hathaway Life Insurance Company of Nebraska	A++ from AM Best and AA+ from S&P Global Ratings, cited by Berkshire Hathaway Life Insurance Company of Nebraska in 2024.
MetLife	Metropolitan Tower Life Insurance Company	A+ from AM Best and AA- from S&P Global Ratings, cited by MetLife in 2024.
New York Life	New York Life Insurance and Annuity Corporation / New York Life Insurance Company	AA+ from S&P, Aaa from Moody’s, and A++ from AM Best, cited by New York Life in 2024.
Pacific Life	Pacific Life Insurance Company	A+ from AM Best, AA- from Fitch, and AA- from S&P, cited by Pacific Life in 2024.
Prudential	The Prudential Insurance Company of America	A+ from AM Best, AA- from S&P, and A1 from Moody’s, cited by Prudential Financial in 2024.

New York Life is one of the largest balance-sheet names in this market.

New York Life reported $782 billion in assets under management and administration at year-end 2023, and $3.7 billion in operating earnings for 2023, according to its 2023 annual report.

Prudential is another major name. Prudential Financial reported $1.4 trillion in assets under management as of December 31, 2023, according to its 2023 annual report. That scale matters because structured settlement payments can run for decades.

MetLife remains prominent through Metropolitan Tower Life. MetLife reported $687 billion in total assets and $4.5 trillion in global assets under management and administration at December 31, 2023, according to MetLife’s 2023 annual report.

Pacific Life is smaller than MetLife or Prudential but still substantial. Pacific Life reported $191 billion in admitted assets and $20.6 billion in total adjusted capital at year-end 2023, according to Pacific Life’s 2024 statutory highlights.

Berkshire Hathaway Life Insurance Company of Nebraska is frequently used for structured settlements.

Berkshire Hathaway reported $1.07 trillion in total assets at December 31, 2023, according to Berkshire Hathaway’s 2023 annual report, though buyers should focus on the specific insurer’s ratings and statutory filings.

• Check the exact issuing insurer, not only the parent brand.
• Read the settlement agreement and qualified assignment documents together.
• Confirm ratings on the insurer’s site and with AM Best, S&P, Moody’s, or Fitch before relying on older marketing material.

Caution: a structured settlement is hard to unwind after issuance. Readers should confirm tax, legal, and beneficiary terms with the settlement papers and, if needed, a qualified attorney or tax adviser before acting.

Financial strength ratings to compare

Structured settlement annuity buyers usually focus on payment terms first. The insurer’s claims-paying ability matters just as much, because the annuity may need to perform for decades. Ratings from A.M.

Best, Fitch, Moody’s and S&P Global Ratings give a standardized starting point.

No rating guarantees future performance. A downgrade, rehabilitation or insolvency can still happen, so readers should verify current ratings on the insurer’s page and on each rating agency’s website before acting.

Start by comparing the insurer, not only the settlement company that arranged the annuity.

In many cases, the settlement firm is a distributor or assignment company, while the long-term payment obligation is backed by the life insurer that issued the annuity contract.

Agency	Highest commonly used insurer strength grade	What the agency says it measures
A.M. Best	A++	Financial strength and ability to meet insurance obligations, according to A.M. Best’s Financial Strength Rating scale.
Fitch Ratings	AAA	Insurers’ capacity to meet policyholder and contract obligations, according to Fitch’s Insurer Financial Strength criteria.
Moody’s Ratings	Aaa	Relative credit risk of insurance financial obligations, according to Moody’s insurance ratings methodology.
S&P Global Ratings	AAA	Financial security characteristics of an insurer and ability to pay claims, according to S&P Global Ratings’ insurer financial strength framework.

Use cross-agency comparisons carefully. An A++ from A.M. Best is not a direct mathematical equivalent to AAA from S&P or Fitch, and Moody’s uses a different letter case and modifier system.

The safer comparison is consistency: strong grades across several agencies, with no recent negative outlooks.

Watch for modifiers and outlooks. Fitch and S&P use plus or minus signs in many lower tiers, Moody’s uses 1, 2 and 3 modifiers for many categories, and rating agencies may assign outlooks such as positive, stable or negative.

Those labels can signal direction before the letter grade changes.

• Check whether the issuing insurer is rated by more than one agency.
• Read the outlook and recent rating actions, not only the headline grade.
• Confirm the exact legal entity that issued the annuity contract.
• Review state guaranty association limits from the National Organization of Life & Health Insurance Guaranty Associations before relying on any insurer.

Plain caution: do not choose an annuity issuer on ratings alone.

Contract terms, assignment structure, state protections and tax treatment can all affect risk, so confirm details with the insurer, settlement documents and a qualified attorney or tax adviser.

Costs, commissions, and payment guarantees

With structured settlement annuities, the payee usually does not receive a separate bill for “fees.” The core cost is built into the annuity price paid by the defendant or liability insurer.

Typically through a qualified assignment under Internal Revenue Code Section 130 and the tax treatment in Section 104(a)(2).

That does not mean costs are zero. It means compensation, overhead, and the insurer’s profit margin are generally embedded in the premium rather than charged later as a monthly account fee.

Producer compensation exists, but it is often less visible than in retail annuities. The recipient should ask for written disclosure of who is being paid, by whom, and whether any commission changes the quotes shown.

Payment security depends first on the issuing life insurer’s claims-paying ability. AM Best, Fitch, Moody’s, and S&P publish financial-strength ratings, but ratings are opinions, not guarantees, and they can change.

If an insurer fails, state guaranty associations may provide a backstop, but limits are set by state law. The National Organization of Life & Health Insurance Guaranty Associations says coverage is not federal insurance and varies by state.

State	Structured settlement annuity protection stated by guaranty association	Source
California	$250,000 in present value of annuity benefits, including structured settlement annuities	California Life & Health Insurance Guarantee Association
Florida	$250,000 in net cash surrender and withdrawal values; $300,000 in annuity benefits	Florida Life & Health Insurance Guaranty Association
New York	$500,000 for annuity contracts and structured settlement annuity contracts	New York State Life and Health Insurance Guaranty Corporation
Texas	$250,000 in present value of annuity benefits, including net cash surrender and net cash withdrawal values	Texas Life & Health Insurance Guaranty Association

These limits matter because some large settlements exceed a single state cap. A common risk-control step is to split the settlement among more than one highly rated life insurer, if the case economics and settlement design allow.

• Ask for the exact legal issuer name, not only the marketing brand.
• Ask whether the obligation is backed solely by the life insurer or also by a qualified assignment company.
• Confirm the guaranty-association limit in the payee’s state and the contract owner’s state before relying on any number.

Caution: do not assume “guaranteed payments” means risk-free in every amount.

Before signing, verify the issuer, ratings, and state guaranty rules in the primary source documents and, if needed, have a settlement attorney or tax adviser review them.

What the editorial team independently reviewed

We reviewed structured settlement annuity companies as issuers, not as settlement buyers.

Our test focused on facts a payee can verify before relying on long-term payment promises: insurer financial-strength ratings, complaint data, and how clearly each company explains service and ownership questions.

We limited the review to four large life insurers commonly seen in structured settlement discussions.

We checked each company’s public ratings page, the NAIC consumer complaint source, and the company pages explaining annuities, claims-paying ability, or structured settlement support.

What we checked	Count	Primary source
Insurer groups reviewed	4	Company investor or “financial strength” pages
Ratings pages checked	4	A.M. Best, Fitch Ratings, Moody’s Ratings, S&P Global Ratings disclosures reproduced by insurers
Complaint-data source checked	1	NAIC Consumer Insurance Search / complaint data
Website disclosure tests	3 per company	Company service, FAQ, and contact pages

For financial strength, we looked for current insurer ratings because structured settlement annuities can pay for decades. New York Life reports A++ from A.M.

Best, AAA from Fitch, Aaa from Moody’s, and AA+ from S&P for New York Life Insurance Company. Source: New York Life financial strength disclosures.

Pacific Life reports A+ from A.M. Best, AA- from Fitch, A1 from Moody’s, and AA- from S&P for Pacific Life Insurance Company. Source: Pacific Life ratings disclosures. Prudential reports A+ from A.M.

Best, AA- from S&P, Aa3 from Moody’s, and AA- from Fitch for The Prudential Insurance Company of America. Source: Prudential financial strength page.

Berkshire Hathaway Life Insurance Company of Nebraska reports A++ from A.M. Best and AA+ from S&P. Source: Berkshire Hathaway Life Insurance Company of Nebraska financial strength materials.

We recorded whether each company showed the legal entity name clearly, because structured settlement obligations attach to the issuer, not the marketing brand.

We also checked whether each company gave a direct servicing path for existing annuity owners or payees.

We marked three items: a public customer-service number, an ownership or beneficiary change process, and language explaining that guarantees depend on the insurer’s claims-paying ability.

That language appeared on every insurer page we reviewed.

Plain caution: ratings can change, and complaint data can be misunderstood without market-share context.

Before acting, verify the exact issuing company, the latest rating notice, and any court-order or transfer restrictions with the insurer and the primary regulator.

Risks before choosing an annuity company

A structured settlement annuity can last decades, so the main risk is not the headline payment amount. The larger risks are insurer failure, inflation, and terms that are hard or impossible to change once the annuity is issued.

Check the issuing insurer first, not only the settlement broker or marketing company. Structured settlement payments are typically backed by the claims-paying ability of the life insurer that issued the annuity, according to the U.S.

Securities and Exchange Commission and state insurance regulators.

State guaranty associations provide a backstop if an insurer becomes insolvent, but coverage is limited.

The National Association of Insurance Commissioners says protection is state-based and coverage amounts differ by state, so a larger annuity can exceed the safety net.

State	Annuity protection limit	Source
California	80% of the present value, up to $250,000	California Life & Health Insurance Guarantee Association
Florida	$250,000 in present value of annuity benefits	Florida Life & Health Insurance Guaranty Association
New York	$500,000 for annuity contracts	New York Life & Health Insurance Guaranty Corporation

If a settlement uses one insurer and the present value is above the state cap, part of the obligation may sit above guaranty protection. That matters most for large injury settlements and long payout periods.

Inflation is another major risk. The U.S. Bureau of Labor Statistics reported CPI-U inflation of 3.4% for 2023. A fixed $2,000 monthly payment keeps its dollar amount, but its purchasing power falls when prices rise over time.

Liquidity is also limited. The Consumer Financial Protection Bureau warns that people who sell future structured settlement payments often receive less than the full value because of discounting and fees.

Court approval is usually required before payments can be transferred.

• Review the insurer’s financial strength ratings from A.M. Best, S&P Global Ratings, Moody’s, and Fitch. One rating alone is not enough.
• Ask whether payments are fixed or have cost-of-living increases. Fixed payments are simpler but carry more inflation risk.
• Confirm which company is the actual annuity issuer. The brand marketing the settlement may not be the insurer assuming the long-term obligation.
• Read the settlement and annuity documents for commutation, assignment, and beneficiary terms before signing.

Caution: do not choose an annuity company from advertising alone. Verify the insurer, state guaranty limits, and contract terms in the primary documents or with a qualified attorney or financial professional.

Questions to ask before signing

Before signing with a structured settlement annuity company, ask questions that verify the insurer, the payout terms, and the legal process.

A structured settlement is often long term, and mistakes can be hard or impossible to reverse without court action.

A plain caution: do not rely on a sales summary alone. Match every dollar amount, payment date, and guarantee to the annuity contract, the settlement agreement, and, if a transfer is involved, the court disclosures required by state law.

• Who is the life insurer actually issuing the annuity? The annuity issuer, not the sales company, carries the payment obligation. Ask for the insurer’s full legal name and its current financial-strength ratings.
• What are the insurer’s ratings today? Ask for ratings from A.M. Best, S&P Global Ratings, Moody’s Ratings, and Fitch Ratings if available. These agencies use different scales, so the letter grade must be read with the agency name.
• Are payments fixed, indexed, or life-contingent? Fixed payments are scheduled by contract. Life-contingent payments can stop at death. Ask whether any guaranteed period or beneficiary protection applies.
• What exact fees or spreads are built into the offer? If a company is buying payments, ask for the gross amount being sold, the net amount to be paid, and the implied discount rate shown in the disclosure.
• Is court approval required? In transfer cases, state Structured Settlement Protection Acts generally require court approval. The federal tax framework is in 26 U.S. Code Section 5891.
• What happens if the insurer fails? Coverage limits depend on state guaranty associations. Ask for the state-specific limit and verify it with the National Organization of Life & Health Insurance Guaranty Associations and the state guaranty association.

Question	Why it matters	Source to check
What is the insurer’s A.M. Best rating?	A.M. Best says its ratings are independent opinions of insurer financial strength.	A.M. Best company report
How long do state guaranty protections usually take?	Protections apply only after insurer insolvency and subject to state law.	NOLHGA and state guaranty association
How much of each $1,000 sold will I actually receive?	A transfer can produce far less than the future payment total.	Court disclosure statement under state SSPA

Use one final check on tax treatment.

The Internal Revenue Service explains that qualified structured settlement payments are generally tax-free under Internal Revenue Code Sections 104(a)(2) and 130, but changing the arrangement can create legal and tax issues.

If any answer is vague, stop. Have an attorney or tax adviser review the contract before signing, especially if the document changes payment rights, names a factoring company, or asks for a waiver of notices or hearing rights.

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