How does a plaintiff’s attorney exercise due diligence in approving an annuity company?
The financial strength of the annuity issuer is extremely important, since the releasor ultimately will look mainly or even solely to that life insurance company for future payments. Usually the assignee is a shell company that is affiliated with the annuity issuer, often having no assets except ownership of the annuities that fund its future payment obligations. A shell company is not rated by the independent analysts. Sometimes the assignee is a bona fide separate insurance company with assets and reserves of its own, and ratings by the independent analysts. In other arrangements, a secondary guarantee of the assignee’s obligations is provided by a certificate or surety bond from another insurance company, or the parent holding company guarantees payments of the assignee. The closest thing to a minimum standard for an annuity issuer or guarantor is contained in the Uniform Periodic Payment of Judgments Act of 1990, a model law adopted by the National Conference of Commissioners on Un
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