Workmans Compensation

[ccassetty]

I have a friend whose father was given a workman's compensation settlement in 1997 via an annuity. The ownership of the contract remains with the employer's workman's compensation carrier. His father did a partial buy out of the annuity for a lump sum through one of the companies that buys structures settlements. His father died about 2 years ago, and now my friend is receiving the payments which were guaranteed for 15 years. He wants to buy out the remaining payments for a lump sum, but is being told that there has since been a new law at the federal level that prevents this. The same company that did the original buy out is saying that they can't do it again because of this law but they are unable to provide a cite . Can anyone confirm or dispute this and provide a cite or cites for this? Thanks!

Carolyn Cassetty

[Guest jreddi]

Workers' Compensation is governed by state law, not federal law. You can either check with the state Bureau of Workers' Compensation or the State Insurance Commissioner. Quite a few states have an ombudsman in the Insurance Commissioner's office who can work with you. All states have a website you should be able to find.

If you need a little more info or if I can help further, let me know

[ccassetty]

FYI - I found it, and it is a federal law. It was part of the Victims of Terrorism Tax Relief Act of 2001. This act imposes a 40% penalty tax on the buy out company on the transaction. So buyouts aren't forbidden, but who in their right mind would want to do it now?

Thanks for responding.

Carolyn

[Guest jreddi]

That law is a new one on me. Will have to read that. Who would've thunk it?

[ccassetty]

Since I started this thread I have also spoken with someone at AIG who claims that each state has the option of going by this law or not. When I read it, it seemed to me that this would only be allowed during a transition period which has already ended. Do you read it the same way?