Benefits of the Secondary Market
Structured settlements have served an important role in the U.S. legal system since the 1980s. Most often used to settle personal injury, lawsuits and claims, structured settlements promote the very sound public policy of encouraging settlements of such cases and claims.
But once the stream of future payments is agreed, the payment stream can’t be changed. This limitation led to the development of a Secondary Market in structured settlements. In the Secondary Market, individuals can liquidate all or a portion of their future settlement payments and receive a discounted lump sum.
Without a Secondary Market, people who receive payments from structured settlements are denied the flexibility to:
- Achieve personal or family financial objectives
- Adapt to changing circumstances in their lives
- Gain access to assets they already own
In the U.S., the Secondary Market is regulated by state and federal law. Every Secondary Market transaction involving NASP members is approved by a court order in accordance with an applicable state statute. This protects payees and promotes transparency and fairness in the transactions.