Like most of the insurance industry, the structured settlement business felt the shock waves of the Executive Life of California insolvency. In fact, the structured settlement industry might have felt a disproportionate impact as Executive Life was a large issuer of structured settlement annuities. The 1987 article pointed out that many structure brokers and advocates were oblivious of the safety issues. Unsafe and careless practices manifested themselves as a result. The Executive Life collapse sent a wake up call that has resulted in some dramatic changes in how safety is approached.
Some simple changes reflect the emphasis on safety.
One is that most participants are demanding that the annuity be placed with large insurance companies with high ratings. Therefore, smaller companies with poorer ratings are dropping out of the marketplace. A number of large, high rated companies are using their security advantages to come into the business. This allows for a large case to be split amongst two or more companies to offer protection in case of one company's insolvency. The rise of structured settlements funded by treasury bonds is a direct result of safety concerns.