| Copyright: | Business Wire | | Source: | Business Wire | | Wordcount: | 255 |
Business Editors/Financial Editors
OLDWICK, N.J.--(BUSINESS WIRE)--August 4, 2008--A.M. Best Co. has released a new methodology, “Securitization of Period-Certain and Life-Contingent Structured Settlements,” which describes how A.M. Best rates securitizations collateralized by structured settlements.
A structured settlement is an agreement between a claimant and a defendant, whereby the claimant agrees to settle a lawsuit in exchange for periodic payments to be made by the defendant to the claimant over time. Structured settlements are a popular method for settling personal injury, product liability, medical malpractice and wrongful death cases. The defendant discharges its obligation by purchasing an annuity from a highly rated life insurance company.
The methodology discusses the basics of structured settlements; the role of factoring companies in the transactions; the application of insurer impairments and recoveries to the transactions; the protocol for determining the mortality risk of the annuitants; the stochastic process for simulating the cash flows for period-certain and life-contingent structured settlements; general transaction requirements, recommendations and expectations; and other issues surrounding the securitization of structured settlements.
To access this methodology and other special reports, analytical methodologies and transactions relating to structured finance, please visit http://www3.ambest.com/sfc/.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.
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