STRUCTURED SETTLEMENTS. USE AND CHARACTERISTICS OF STRUCTURED SETTLEMENTS IN THE PROPERTY-CASUALTY INSURANCE INDUSTRY
In recent years, the property-casualty insurance industry has begun to use a new technique for settlement of large and serious claims that is quite different from the traditional lump sum payment. Called structured settlement, this technique has been found to offer advantages to all of the key actors involved in a major liability claim--casualty insurers, claimants, plaintiff attorneys, judges, and society at large. Basically, a structured settlement involves the periodic payout of a settlement amount for life or for a fixed number of years. The settlement may include a lump sum and other types of benefits, depending on the injured claimant's circumstances. A structured settlement typically involves the settlement of a casualty insurer's liability on behalf of its insured, to an injured or disabled claimant through the purchasing for claimant's benefit of an annuity issued by a life insurer. This report contains findings of a detailed survey of property-casualty insurers concerning use of structured settlements, policies and criteria used in their administration, types of claims involved, problems encountered, and what are perceived as the major advantages and disadvantages of structured settlements. The survey was conducted during the Spring of 1983 by the All-Industry Research Advisory Council (AIRAC) Subcommittee on Structured Settlements to describe current practices with regard to structured settlements in the property-casualty industry as well as to explore in more depth the advantages of this claim settlement technique. One hundred and one property and casualty insurers each having .15% or more of the market were invited to complete the 32-question structured settlement questionnaire (see Appendix) and from this number 54 or 53% replied. The 54 firms that answered the survey account for $57.1 billion of property-casualty direct written premiums, or a total of 58% of industry premium volume according to 1981 data compiled by the A. M. Best Company. Fifty-two of the 54 respondents do utilize structured settlements and were able to provide information on their company's experiences and practices.
All-Industry Research Advisory Council1200 Harger Road, Suite 222
Oak Brook, IL United States 60521
- Publication Date: 1983-10
- Features: Appendices; Tables;
- Pagination: 46 p.
- TRT Terms: Flood damage; Insurance claims; Insurance industry; Loss and damage claims; Settlement (Structures)
- Old TRIS Terms: Structured settlements
- Subject Areas: Freight Transportation; Safety and Human Factors;
- Accession Number: 00390432
- Record Type: Publication
- Source Agency: National Highway Traffic Safety Administration
- Report/Paper Numbers: HS-036 945
- Files: HSL, USDOT
- Created Date: Nov 30 1984 12:00AM