Relying on Federal Court precedent, a Pennsylvania intermediate appellate court resolved whether the plain language of Section 916 of the Longshore and Harbor Workers’ Compensation Act (“LHWCA”) prohibits the assignment of benefits where the employer/insured entered into a reinsurance agreement with another insurer to pay the structured settlement payments. “In other words, a determination must be made as to whether [the employee’s] claim under the LHWCA was resolved when the Reinsurance Agreement was entered, and whether the settlement payouts are being made to him pursuant to a contract where he is a third party beneficiary.”

The Court ultimately reversed the lower court’s decision which had permitted the transfer, holding “it would be absurd to allow a party, who expressly settled a LHWCA claim, to avoid the anti-assignment clause of the LHWCA merely by engaging in the common practice of purchasing an annuity or having a separate insurance company pay the structured settlement payments …. [and] to utilize the [petitioner’s] interpretation of Section 916 would effectively render the LHWCA inapplicable, as any form of reinsurance agreement or annuity would be considered a payment of the outstanding claim.”

In re: C. Dwyer, No. 149 WDA 2016 (Sup. Ct. Pa. January 27. 2017)