Structured Settlements

Structured settlement valuation is fundamentally a present value calculation—discounting future payment streams to today's dollars. The complexity lies in selecting appropriate discount rates and navigating the legal requirements for settlement transfers.

Obligor credit quality is paramount. Payments guaranteed by highly-rated insurance companies warrant lower discount rates than those from lesser-rated insurers. The payment schedule structure—including any life-contingent elements—affects both value and marketability. State laws govern transfers and require court approval, adding friction to transactions.

Our methodology calculates present values using market-appropriate discount rates, referencing comparable settlement purchase prices and treasury yields plus risk spreads. We assess obligor strength, payment certainty, and regulatory requirements that affect transaction feasibility.