Security authorized or required for payment of a judgment for periodic installments entered in accordance with this article must be in the form of an annuity contract, executed by a qualified insurer and approved by the superintendent of financial services pursuant to section five thousand forty-nine of this article, and approved by the court.
§ 5042.Form of security.
Article 50-B. Periodic Payment of Judgments in Personal Injury, Injury to Property and Wrongful Death Actions · Last amended 2011 · Last verified July 21, 2026
In one sentenceCPLR 5042 requires that any security posted to guarantee periodic payments under Article 50-B take the form of an annuity contract from an insurer the state has approved as qualified, with the court's sign-off as well.
Full Text of CPLR 5042
Plain-English Summary
Article 50-B doesn't let a defendant promise to make future payments — it requires real security behind that promise. This section says what form that security has to take: an annuity contract. Not a bond, not a letter of credit, not a self-funded reserve. An annuity.
Two layers of approval stand behind that annuity. The insurer issuing it has to be a “qualified insurer” under the rules the superintendent of financial services sets out in CPLR 5049. And the court that entered the judgment has to approve the contract itself before it satisfies the security requirement. Both checks aim at the same risk: a judgment creditor who is owed money for years or decades needs an insurer that will still be solvent when the payments come due.
Frequently Asked Questions
What kind of security guarantees periodic payments in a New York personal injury judgment?
An annuity contract. The court can't accept any other form of security for a judgment payable in periodic installments under Article 50-B.
Who approves the insurance company that issues the annuity?
The superintendent of financial services designates which insurers, self-insurers, plans, or arrangements qualify to provide this security, under the rules set out in CPLR 5049.
Does the court also have to approve the annuity contract?
Yes. Beyond the insurer being qualified, the specific contract needs the court's approval before it satisfies the judgment's security requirement.
Can a defendant self-insure instead of buying a commercial annuity?
Only if the defendant qualifies as an approved self-insurer, plan, or arrangement under the superintendent's rules — the security still has to take the form of an annuity contract.
What happens if the insurer that issued the annuity becomes unqualified later?
Article 50-B's security and adjustment provisions exist precisely to guard against that risk, which is why the initial approval by both the superintendent and the court matters.
Amendment History
Add, L 1986, ch 682, § 9, eff July 30, 1986; amd, L 2011, ch 62, § 104 (Part A), eff Oct 3, 2011.
Source & verification. Provision text, History, and Advisory
Committee Notes are reproduced verbatim from the Consolidated Laws of New York.
Last verified July 21, 2026.
· Official source
Also known as: annuity contract judgment security New Yorkqualified insurer periodic paymentstructured settlement annuity approvalsuperintendent of financial services annuityform of security 50-B