If your cheque says Transamerica but the letters mention Wilton Re, nothing has gone wrong.
In 2017 Aegon divested the run-off business that includes its legacy payout annuities. Roughly USD 14 billion of liabilities were reinsured to affiliates of Wilton Re, which took over administration.
Here is the part that matters and that almost nobody explains: it was reinsurance plus a transfer of administration — not a novation. The Transamerica entities remain the obligors of record on your contract. Your legal relationship did not move. Your paperwork did.
What actually happened to Aegon’s structured settlement block
On 22 May 2017, Aegon N.V. announced it would divest its two largest US run-off businesses: the payout annuity business and the bank-owned/corporate-owned life insurance (BOLI/COLI) business.
Under the transaction, Aegon’s Transamerica life subsidiaries reinsured approximately USD 14 billion of liabilities to affiliates of Wilton Re US Holding Inc. Aegon expected the deal to release around USD 700 million of capital and to improve its Group Solvency II ratio by roughly six percentage points. The transaction completed in late June 2017.
Two points of precision, because this is where most published information on the subject goes wrong.
First, the transaction documents do not say “structured settlement.” Aegon’s release and its Form 6-K filed with the SEC describe a payout annuity business. Structured settlement annuities sit inside that category, which is why the deal is correctly described as covering them — but if you go looking for the phrase in the primary sources, you will not find it. Anyone quoting a document that does use it is quoting something other than the deal papers.
Second, and far more important: reinsurance is not novation.
A novation substitutes a new party as the obligor and releases the old one. That did not happen here. Wilton Re affiliates assumed the economics through reinsurance and took over administration, but the Transamerica entities remain the contractual obligors of record to payees. Your contract was not rewritten and your rights under it were not transferred away. Practically: you may receive correspondence branded either way, and your recourse still runs to the entity named on your original settlement documents.
Who services the payments now
Wilton Re assumed administration of the acquired block. Its head office is in Norwalk, Connecticut, and its servicing operations for the acquired New York business run through a claims centre in Clinton, Iowa. Current details are published on Wilton Re’s contact page — verify them there rather than relying on any figure printed elsewhere, including here, since servicing arrangements and phone numbers change.
Does Aegon still write new structured settlement annuities?
No. The block sold in 2017 was described throughout the transaction as run-off business — meaning it was closed to new sales and simply being administered to maturity. Aegon and Transamerica entities are not participants in the new-issue structured settlement market today.
If you are a claimant being offered a structure now, the issuer will be somebody else. That is a different question, and it is covered further down.
How structured settlement annuities actually work
If you are trying to understand what you hold, three federal provisions explain almost everything.
1. IRC § 104(a)(2) — why the money is tax-free
26 U.S.C. § 104(a)(2) excludes from gross income:
the amount of any damages (other than punitive damages) received (whether by suit or agreement and whether as lump sums or as periodic payments) on account of personal physical injuries or physical sickness.
26 U.S.C. § 104(a)(2)Two words in that sentence do enormous work.
“Periodic payments.” Because periodic payments are excluded on the same footing as lump sums, the entire stream is tax-free — including the investment growth built into it. This is the structural advantage over taking cash and investing it yourself, where the earnings would be taxable. A $500,000 settlement paid as a structure that eventually pays out $900,000 delivers all $900,000 free of federal income tax on the damages.
“Physical.” Damages for emotional distress without an underlying physical injury or sickness are not excluded. That qualifier was added by the Small Business Job Protection Act of 1996 and it is one of the most commonly misunderstood points in the whole area.
Note also § 104(a)(1), which separately excludes amounts received under workers’ compensation acts — the basis for workers’ compensation structured settlements.
2. The Periodic Payment Settlement Act of 1982
The 1982 Act (Pub. L. 97-473) settled the tax treatment described above and added IRC § 130, which lets a defendant or its insurer hand the payment obligation to a third party — a “qualified assignment” — without the assignee being taxed on the money it receives to fund the payments.
This is why the company paying you is usually not the company you sued.
3. IRC § 130 — the four conditions that make your annuity rigid
A qualified assignment under § 130 requires that:
- The payments are fixed as to amount and time;
- The payments cannot be accelerated, deferred, increased or decreased by the recipient;
- The assignee’s obligation is no greater than that of the party who assigned it;
- The payments are excludable by the recipient under § 104(a)(1) or § 104(a)(2).
Condition 2 is the one people run into. You cannot simply ask for your money early. The inflexibility is not an insurer being difficult — it is the statutory price of the tax exemption, and it is what created an entire secondary industry designed to work around it.
Selling your payments: the part that requires real caution
If you want cash now, you are in the factoring market — companies that buy future payment streams at a discount.
Congress built a serious speed bump into this in 2002.
The 40% excise tax
26 U.S.C. § 5891 imposes a tax equal to 40% of the factoring discount on anyone who acquires structured settlement payment rights.
That tax disappears only if the transfer is approved in advance by a qualified order — a final order from a state court or responsible administrative authority finding that the transfer does not contravene federal or state statute and is in the best interest of the payee, taking into account the welfare and support of the payee’s dependents.
Read that standard again. It is not “the payee consents.” A judge must independently conclude the deal is good for you and your dependants. The implementing regulations sit at 26 CFR Part 157, and the tax is reported on IRS Form 8876.
This protection is recent in historical terms. As Congress recorded at the time, as of 1998 only three states — Illinois, Connecticut and Kentucky — required court approval of these transactions. States subsequently adopted Structured Settlement Protection Acts, largely following the NCOIL model act.
Why the courts were given that job: the Access Funding case
The reason for judicial scrutiny is not theoretical.
Between 2013 and 2015, Access Funding LLC of Chevy Chase, Maryland purchased structured settlement payment rights from roughly 200 people, many of them Baltimore residents who had received settlements for childhood lead-paint poisoning — that is, people whose settlements existed precisely because they had suffered cognitive injury.
The Consumer Financial Protection Bureau alleged that Access Funding steered nearly all of its Maryland customers to a single attorney, Charles Smith, who was presented as the statutorily required independent professional advisor but who, on the Bureau’s account, provided virtually no advice and was paid directly by Access Funding. The Bureau also alleged consumers were misled into believing that taking a cash advance obliged them to complete the sale.
The case resolved by consent between 2021 and 2022. The monetary relief was small — $40,000 in disgorgement plus a $10,000 civil penalty against Smith, the same against the Access Funding entities and two principals, and a $5,000 penalty against a third individual — alongside a permanent ban on referring consumers to certain advisors. Full details are on the CFPB enforcement docket.
Those penalties are trivially small against roughly 200 affected people. That gap reflects what the defendants could pay, not the scale of the alleged harm — and it is precisely why the judge’s independent best-interest review is the protection that actually matters. Do not treat a court approval hearing as a formality to be got through. It is the only stage at which someone whose incentives are not aligned with the buyer’s looks at your deal.
What we will not tell you
You will find many pages quoting a “typical discount rate” for selling structured settlement payments. We are not going to give you one, because we could not find a single government, regulator, court-aggregated or academic source that establishes it, and inventing a number here would be worse than useless — it would anchor you.
What you can do is arithmetic. Work out the present value of what you would be giving up, then compare it to the offer:
Lump sum vs payment stream: present-value check
What a buyer offers, against what the remaining payments are actually worth.
Educational model only, ignoring taxes, fees and inflation assumptions. Real factoring transactions require court approval and often apply far higher effective discount rates. Not financial advice.
Then take the transfer petition itself — it must state the discounted present value and the aggregate payments — and read those two numbers before the hearing.
Is the company behind your annuity safe?
Structured settlement annuities are long-dated promises, so counterparty strength genuinely matters.
If a life insurer fails, state guaranty associations provide a backstop. Per NOLHGA, the most common annuity limit is $250,000 in present value of annuity benefits, though a number of states — Connecticut, New York, Washington and Utah among them — provide $500,000, and California uses a percentage-based approach.
Three features of that protection are widely misunderstood:
- It is assessed on present value, not on total payments. If the present value of your remaining stream exceeds the limit, coverage is partial and pro-rated.
- Coverage follows your state of residence when the insurer is ordered into liquidation — not the state where the annuity was bought.
- A large lifetime stream can therefore sit substantially outside protection. For a catastrophically injured claimant with decades of payments, this is a real consideration, not a footnote.
Who writes structured settlements today
The market is considerably healthier than the run-off framing above might suggest.
The National Structured Settlements Trade Association reported record annuity premium of USD 8.623 billion in 2023, and approximately USD 9.48 billion across roughly 40,000 cases in 2024. Athene entered the market in 2025.
For scale: LIMRA put total US retail annuity sales at USD 464.1 billion in 2025. Structured settlements are therefore a small, specialised corner — roughly 2% — of the annuity world.
“Structured annuity” in industry sales data usually means a registered index-linked annuity (RILA) — a retail investment product with nothing to do with injury settlements. NSSTA figures are trade-association reported rather than audited regulatory statistics, and LIMRA’s survey explicitly excludes structured settlements. Two different products, two different datasets, one confusing word.
Frequently asked questions
Who is legally responsible for paying my Aegon or Transamerica structured settlement?
The 2017 transaction was reinsurance plus a transfer of administration, not a novation. The Transamerica entities remain the obligors of record on the contract, while Wilton Re affiliates assumed the economics and took over servicing. You may see either name on correspondence.
Is my structured settlement income taxable?
Damages received on account of personal physical injuries or physical sickness are excluded from gross income under IRC § 104(a)(2), and the exclusion covers periodic payments including the growth built into them. Punitive damages are excluded from the exclusion, and emotional distress without physical injury does not qualify. Confirm your own position with a qualified tax professional.
Can I cash out my structured settlement early?
Not unilaterally. A qualified assignment under IRC § 130 requires that payments cannot be accelerated, deferred, increased or decreased by the recipient. Selling payments to a factoring company is possible, but requires a court order finding the transfer is in your best interest, taking into account the welfare and support of your dependants.
What is the 40% tax on selling structured settlement payments?
IRC § 5891 imposes a tax equal to 40% of the factoring discount on a person acquiring structured settlement payment rights, unless the transfer is approved in advance by a qualified order from a court or responsible administrative authority. The tax falls on the buyer, and the court approval requirement is the protection it creates for you.
What happens if the insurance company behind my annuity fails?
State guaranty associations provide a backstop. The most common limit is $250,000 in present value of annuity benefits, with some states providing $500,000 and California using a percentage-based approach. Coverage is assessed on present value, not total payments, and follows your state of residence at the time of liquidation.
Does Aegon still sell structured settlement annuities?
No. The payout annuity block divested in 2017 was run-off business, closed to new sales. Claimants being offered a structure today will be dealing with a different issuer.
How do I find out who services my annuity?
Start with your original settlement agreement and annuity contract, which name the issuer and any assignee. Then contact the servicer named on your most recent payment correspondence. Where a block has been sold, the servicer may differ from the obligor named in your documents, which is normal and does not affect your rights.
The bottom line
What to hold on to
- The 2017 Aegon–Wilton Re deal moved $14bn of economics and the administration, not your contract
- Transamerica entities remain the obligors of record — reinsurance is not novation
- Your payments are tax-free because of IRC § 104(a)(2), and rigid because of IRC § 130
- You cannot accelerate payments; selling them requires a court best-interest finding
- The 40% excise tax under IRC § 5891 exists to force that judicial review
- Guaranty association cover is typically $250,000 of present value — often less than a lifetime stream
- Anyone quoting you a “typical” discount rate is quoting something they cannot source
If you take one action from this article, make it this: find your original settlement agreement and annuity contract, and read the names on them. The obligor, the assignee and the servicer are three different roles, and knowing which is which is the difference between calling the right company and spending a month calling the wrong one.
Ethical Founder Law is not affiliated with, endorsed by, or acting as an agent of Aegon N.V., Transamerica, Wilton Re, or any company named above. Those names are used descriptively, to report accurately on a transaction of public record. This article is general information, not legal, tax or financial advice. Consult a qualified professional about your own situation. See our Disclaimer and Editorial Policy.