State Statutes

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Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: Wyoming Statutes 1-16-601 Enacted 3/15/2006 Effective 7/1/2006 Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

Be It Enacted by the Legislature of the State of Wyoming:

Section 1. W.S. 1-16-601 through 1-16-607 are created to read:
 
                                   ARTICLE 6
 
                 WYOMING STRUCTURED SETTLEMENT PROTECTION ACT

1-16-601. Short title. This act shall be known and may be cited as the Wyoming Structured Settlement Protection Act.

1-16-602. Definitions.

(a) As used in this act:

(i) "Annuity issuer" means an insurer that has issued a contract to fund periodic payments under a structured settlement;

(ii) "Dependents" include a payee's spouse and minor children and all other persons for whom the payee is legally obligated to provide support, including alimony;

(iii) "Discounted present value" means the present value of future payments determined by discounting the payments to the present value using the most recently published applicable federal rate for determining the present value of an annuity, as issued by the United States Internal Revenue Service;

(iv) "Gross advance amount" means the sum payable to the payee or for the payee's account as consideration for a transfer of structured settlement payment rights before any reductions for transfer expenses or other deductions to be made from such consideration;

(v) "Independent professional advice" means advice of an attorney, certified public accountant, actuary or other licensed professional adviser;

(vi) "Interested parties" means, with respect to any structured settlement, the payee, any beneficiary irrevocably designated under the annuity contract to receive payments following the payee's death, the annuity issuer, the structured settlement obligor and any other party that has continuing rights or obligations under the structured settlement;

(vii) "Net advance amount" means the gross advance amount less the aggregate amount of the actual and estimated transfer expenses required to be disclosed under W.S. 1-16-603(e);

(viii) "Payee" means an individual who is receiving tax free payments under a structured settlement and proposes to make a transfer of payment rights thereunder;

(ix) "Periodic payments" includes both recurring payments and scheduled future lump sum payments;

(x) "Qualified assignment agreement" means an agreement providing for a qualified assignment within the meaning of 26 U.S.C. 130;

(xi) "Settled claim" means the original tort claim resolved by a structured settlement;

(xii) "Structured settlement" means an arrangement for periodic payment of damages for personal injuries or sickness established by settlement agreement or judgment in resolution of a tort claim;

(xiii) "Structured settlement agreement" means the agreement, judgment, stipulation or release embodying the terms of the structured settlement;

(xiv) "Structured settlement obligor" means, with respect to a structured settlement, the party that has a continuing obligation to make periodic payments to the payee under a structured settlement agreement or a qualified assignment agreement;

(xv) "Structured settlement rights" means rights to receive periodic payments under a structured settlement, whether from the structured settlement obligor or the annuity issuer, where:

(A) The payee is domiciled in, or the domicile or principal place of business of the structured settlement obligor or the annuity issuer is located in, this state;

(B) The structured settlement agreement was approved by a court in this state; or

(C) The structured settlement agreement is expressly governed by the laws of this state.

(xvi) "Terms of the structured settlement" include, with respect to a structured settlement agreement, the terms of the structured settlement agreement, the annuity contract, a qualified assignment agreement and any order or other approval of any court that authorized or approved the structured settlement;

(xvii) "Transfer" means any sale, assignment, pledge, hypothecation or other alienation or encumbrance of structured settlement payment rights made by a payee for consideration, provided that the term "transfer" does not include the creation or perfection of a security agreement in structured settlement payment rights under a blanket security agreement entered into with an insured depository institution, in the absence of any action to redirect the structured settlement payments to the insured depository institution, or an agent or successor in interest thereof, or otherwise to enforce the blanket security interest against the structured settlement payment rights;

(xviii) "Transfer agreement" means the agreement providing for a transfer of structured settlement payment rights;

(xix) "Transfer expenses" means all expenses of a transfer that are required under the transfer agreement to be paid by the payee or deducted from the gross advance amount, including without limitation, court filing fees, attorneys' fees, escrow fees, lien recordation fees, judgment and lien search fees, finders' fees, commissions and other payments to a broker or other intermediary. "Transfer expenses" do not include preexisting obligations of the payee payable for the payee's account from the proceeds of a transfer;

(xx) "Transferee" means a party acquiring or proposing to acquire structured settlement payment rights through a transfer;

(xxi) "This act" means W.S. 1-16-601 through 1-16-607.

1-16-603. Required disclosures to payee.

(a) Not less than three (3) days prior to the date on which a payee signs a transfer agreement, the transferee shall provide to the payee a separate disclosure statement, in bold type no smaller than fourteen (14) points, setting forth:

(i) The amounts and due dates of the structured settlement payments to be transferred;

(ii) The aggregate amount of the payments;

(iii) The discounted present value of the payments to be transferred and the amount of the applicable federal rate used in calculating the discounted present value;

(iv) The gross advance amount;

(v) An itemized listing of all applicable transfer fees, other than attorneys' fees and related disbursements payable in connection with the transferee's application for approval of the transfer and the transferee's best estimate of the amount of any such fees and disbursements;

(vi) The net advance amount;

(vii) The amount of any penalties or liquidated damages payable by the payee in the event of any breach of the transfer agreement by the payee;

(viii) A statement that the payee has the right to cancel the transfer agreement without penalty or further obligation not later than the third business day after the date the agreement is signed by the payee.

1-16-604. Approval of transfers of structured settlement payment rights.

(a) No direct or indirect transfer of structured settlement payment rights shall be effective and no structured settlement obligor or annuity issuer shall be required to make any payment directly or indirectly to any transferee of structured settlement payment rights unless the transfer has been approved in advance in a final court order based on express findings by the court that:

(i) The transfer is in the best interest of the payee, taking into account the welfare and support of the payee's dependents;

(ii) The payee has been advised in writing by the transferee to seek independent professional advice regarding the transfer and has either received such advice or knowingly waived such advice in writing; and

(iii) The transfer does not contravene any applicable statute or the order of any court or other government authority.

1-16-605. Effects of transfer of structured settlement payment rights.

(a) Following a transfer of structured settlement payment rights under this act:

(i) The structured settlement obligor and the annuity issuer shall, as to all parties except the transferee, be discharged and released from any and all liability for the transferred payments;

(ii) The transferee shall be liable to the structured settlement obligor and the annuity issuer:

(A) If the transfer contravenes the terms of the structured settlement, for any taxes incurred by such parties as a consequence of the transfer; and

(B) For any other liabilities or costs, including reasonable costs and attorneys' fees arising from compliance by such parties with the order of the court or arising as a consequence of the transferee's failure to comply with this act.

(iii) Neither the annuity issuer nor the structured settlement obligor may be required to divide any periodic payment between the payee and any transferee or assignee or between two (2) or more transferees or assignees; and

(iv) Any further transfer of structured settlement payment rights by the payee may be made only after compliance with all requirements of this act.

1-16-606. Procedure for approval of transfers.

(a) An application under this act for approval of a transfer of structured settlement payment rights shall be made by the transferee and may be brought in the Wyoming district court that approved the structured settlement payment rights, or the Wyoming district court in the county where the payee resides without regard to where the structured settlement payment rights may have accrued.

(b) Not less than twenty (20) days prior to the scheduled hearing on an application for approval of a transfer of structured settlement payment rights under W.S. 1-16-604, the transferee shall file with the court and serve all interested parties a notice of the proposed transfer and application for its authorization, including with the notice:

(i) A copy of the transferee's application for transfer;

(ii) A copy of the transfer agreement;

(iii) A copy of the disclosure statement required under W.S. 1-16-603;

(iv) A listing of each of the payee's dependents, together with each dependent's age and date of birth;

(v) Notification that any interested party may support, oppose or otherwise respond to the transferee's application, either in person or by counsel, by submitting written comments to the court or by participating in the hearing; and

(vi) Notification of the time and place of the hearing and notification of the manner in which and the time by which written responses to the application shall be filed, which time shall be not less than fifteen (15) days after service of the transferee's notice, in order to be considered by the court.

1-16-607. General provisions; construction.

(a) The provisions of this act may not be waived by any payee.

(b) Any transfer agreement entered into on or after July 1, 2006 by a payee who resides in this state shall provide that disputes under the transfer agreement, including any claim that the payee has breached the agreement, shall be determined in and under the laws of this state. No transfer agreement shall authorize the transferee or any other party to confess judgment or consent to entry of judgment against the payee.

(c) No transfer of structured settlement payment rights shall extend to any payments that are life- contingent unless, prior to the date on which the payee signs the transfer agreement, the transferee has established and has agreed to maintain procedures reasonably satisfactory to the annuity issuer and the structured settlement obligor for:

(i) Periodically confirming the payee's survival; and

(ii) Giving the annuity issuer and the structured settlement obligor prompt written notice in the event of the payee's death.

(d) No payee who proposes to make a transfer of structured settlement payment rights shall incur any penalty, forfeit any application fee or other payment, or otherwise incur any liability to the proposed transferee or any assignee based on any failure of the transfer to satisfy the requirements of this act.

(e) Nothing contained in this act shall be construed to authorize any transfer of structured settlement payment rights in contravention of any law or to imply that any transfer under a transfer agreement entered into prior to July 1, 2006 is valid or invalid.

(f) Compliance with the requirements of W.S. 1-16-603 and fulfillment of the conditions set forth in W.S. 1-16-604 shall be solely the responsibility of the transferee in any transfer of structured settlement payment rights, and neither the structured settlement obligor nor the annuity issuer shall bear any responsibility for, or any liability arising from, noncompliance with the requirements of W.S. 1-16-603 or failure to fulfill the conditions set forth in W.S. 1-16-604.

Section 2. This act is effective July 1, 2006.

 

In 2000, the National Structured Settlements Trade Association and National Association of Settlement Purchasers agreed on language that was designed to protect the consumer when selling their structured settlement payments for cash. This language is referred to as the “Model State Structured Settlement Protection Act” and 46 states now have adopted laws that are closely aligned with the model act.

MODEL STATE STRUCTURED SETTLEMENT PROTECTION ACT

SECTION 1. TITLE. This Act shall be known and referred to as the “Structured Settlement Protection Act."

SECTION 2. DEFINITIONS. For purposes of this Act—

(a) "annuity issuer" means an insurer that has issued a contract to fund periodic payments under a structured settlement;

(b) "dependents” include a payee\’s spouse and minor children and all other persons for whom the payee is legally obligated to provide support, including alimony;

(c) "discounted present value" means the present value of future payments determined by discounting such payments to the present using the most recently published Applicable Federal Rate for determining the present value of an annuity, as issued by the United States Internal Revenue Service;

(d) "gross advance amount" means the sum payable to the payee or for the payee's account as consideration for a transfer of structured settlement payment rights before any reductions for transfer expenses or other deductions to be made from such consideration;

(e) "independent professional advice” means advice of an attorney, certified public accountant, actuary or other licensed professional adviser;

(f) "interested parties" means, with respect to any structured settlement, the payee, any beneficiary irrevocably designated under the annuity contract to receive payments following the payee’s death, the annuity issuer, the structured settlement obligor, and any other party that has continuing rights or obligations under such structured settlement;

(g) "net advance amount" means the gross advance amount less the aggregate amount of the actual and estimated transfer expenses required to be disclosed under Section 3(e) of this Act;

(h) "payee" means an individual who is receiving tax free payments under a structured settlement and proposes to make a transfer of payment rights thereunder;

(i) "periodic payments" includes both recurring payments and scheduled future lump sum payments;

(j) qualified assignment agreement" means an agreement providing for a qualified assignment within the meaning of section 130 of the United States Internal Revenue Code, United States Code Title 26, as amended from time to time;

(k) "responsible administrative authority" means, with respect to a structured settlement, any government authority vested by law with exclusive jurisdiction over the settled claim resolved by such structured settlement;

(l) "settled claim" means the original tort claim or workers\’ compensation claim resolved by a structured settlement;

(m) "structured settlement" means an arrangement for periodic payment of damages for personal injuries or sickness established by settlement or judgment in resolution of a tort claim or for periodic payments in settlement of a workers’ compensation claim;

(n) "structured settlement agreement" means the agreement, judgment, stipulation, or release embodying the terms of a structured settlement;

(o) "structured settlement obligor" means, with respect to any structured settlement, the party that has the continuing obligation to make periodic payments to the payee under a structured settlement agreement or a qualified assignment agreement;

(p) "structured settlement payment rights" means rights to receive periodic payments under a structured settlement, whether from the structured settlement obligor or the annuity issuer, where –

(i) the payee is domiciled in, or the domicile or principal place of business of the structured settlement obligor or the annuity issuer is located in, this State; or(ii) the structured settlement agreement was approved by a court or responsible administrative authority in this State; or

(iii) the structured settlement agreement is expressly governed by the laws of this State;

(q) "terms of the structured settlement" include, with respect to any structured settlement, the terms of the structured settlement agreement, the annuity contract, any qualified assignment agreement and any order or other approval of any court or responsible administrative authority or other government authority that authorized or approved such structured settlement;

(r) "transfer" means any sale, assignment, pledge, hypothecation or other alienation or encumbrance of structured settlement payment rights made by a payee for consideration; provided that the term “transfer” does not include thecreation or perfection of a security interest in structured settlement payment rights under a blanket security agreement entered into with an insured depository institution, in the absence of any action to redirect the structured settlement payments to such insured depository institution, or an agent or successor in interest thereof, or otherwise to enforce such blanket security interest against the structured settlement payment rights;

(s) "transfer agreement" means the agreement providing for a transfer of structured settlement payment rights.

(t) "transfer expenses" means all expenses of a transfer that are required under the transfer agreement to be paid by the payee or deducted from the gross advance amount, including, without limitation, court filing fees, attorneys fees, escrow fees, lien recordation fees, judgment and lien search fees, finders’ fees, commissions, and other payments to a broker or other intermediary; “transfer expenses” do not include preexisting obligations of the payee payable for the payee’s account from the proceeds of a transfer;

(u) "transferee" means a party acquiring or proposing to acquire structured settlement payment rights through a transfer;

SECTION 3. REQUIRED DISCLOSURES TO PAYEE. Not less than three (3) days prior to the date on which a payee signs a transfer agreement, the transferee shall provide to the payee a separate disclosure statement, in bold type no smaller than 14 points, setting forth —

(a) the amounts and due dates of the structured settlement payments to be transferred;

(b) the aggregate amount of such payments;

(c) the discounted present value of the payments to be transferred, which shall be identified as the "calculation of current value of the transferred structured settlement payments under federal standards for valuing annuities", and the amount of the Applicable Federal Rate used in calculating such discounted present value;

(d) the gross advance amount;

(e) an itemized listing of all applicable transfer expenses, other than attorneys’ fees and related disbursements payable in connection with the transferee’s application for approval of the transfer, and the transferee’s best estimate of the amount of any such fees and disbursements;

(f) the net advance amount;

(g) the amount of any penalties or liquidated damages payable by the payee in the event of any breach of the transfer agreement by the payee; and

(h) a statement that the payee has the right to cancel the transfer agreement, without penalty or further obligation, not later than the third business day after the date the agreement is signed by the payee.

SECTION 4. APPROVAL OF TRANSFERS OF STRUCTURED SETTLEMENT PAYMENT RIGHTS.

(a) No direct or indirect transfer of structured settlement payment rights shall be effective and no structured settlement obligor or annuity issuer shall be required to make any payment directly or indirectly to any transferee of structured settlement payment rights unless the transfer has been approved in advance in a final court order or order of a responsible administrative authority based on express findings by such court or responsible administrative authority that —

(i) the transfer is in the best interest of the payee, taking into account the welfare and support of the payee's dependents;(ii) the payee has been advised in writing by the transferee to seek independent professional advice regarding the transfer and has either received such advice or knowingly waived such advice in writing; and

(iii) the transfer does not contravene any applicable statute or the order of any court or other government authority;

SECTION 5. EFFECTS OF TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS. Following a transfer of structured settlementpayment rights under this Act:

(a) The structured settlement obligor and the annuity issuer shall, as to all parties except the transferee, be discharged and released from any and all liability for the transferred payments;

(b) The transferee shall be liable to the structured settlement obligor and the annuity issuer:

(i) if the transfer contravenes the terms of the structured settlement, for any taxes incurred by such parties as a consequence of the transfer; and(ii) for any other liabilities or costs, including reasonable costs and attorneys\’ fees, arising from compliance by such parties with the order of the court or responsible administrative authority or arising as a consequence of the transferee's failure to comply with this Act;

(c) Neither the annuity issuer nor the structured settlement obligor may be required to divide any periodic payment between the payee and any transferee or assignee or between two (or more) transferees or assignees; and

(d) Any further transfer of structured settlement payment rights by the payee may be made only after compliance with all of the requirements of this Act.

SECTION 6. PROCEDURE FOR APPROVAL OF TRANSFERS.

(a) An application under this Act for approval of a transfer of structured settlement payment rights shall be made by the transferee and may be

brought in the [county] in which the payee resides, in the [county] in which the structured settlement obligor or the annuity issuer maintains its principal place of business, or in any court or before any responsible administrative authority which approved the structured settlement agreement.

(b) Not less than twenty (20) days prior to the scheduled hearing on any application for approval of a transfer of structured settlement payment rights under Section 4 of this Act, the transferee shall file with the court or responsible administrative authority and serve on all interested parties a notice of the proposed transfer and the application for its authorization, including with such notice:

(i) a copy of the transferee’s application;(ii) a copy of the transfer agreement;

(iii) a copy of the disclosure statement required under Section 3 of this Act;

(iv) a listing of each of the payee's dependents, together with each dependent's age;

(v) notification that any interested party is entitled to support, oppose or otherwise respond to the transferee’s application, either in person or by counsel, by submitting written comments to the court or responsible administrative authority or by participating in the hearing; and

(vi) notification of the time and place of the hearing and notification of the manner in which and the time by which written responses to the application must be filed (which shall be not less than [fifteen (15)] days after service of the transferee’s notice) in order to be considered by the court or responsible administrative authority.

SECTION 7. GENERAL PROVISIONS; CONSTRUCTION.

(a) The provisions of this Act may not be waived by any payee.

(b) Any transfer agreement entered into on or after the effective date of this Act by a payee who resides in this state shall provide that disputes under such transfer agreement, including any claim that the payee has breached the agreement, shall be determined in and under the laws of this State. No such transfer agreement shall authorize the transferee or any other party to confess judgment or consent to entry of judgment against the payee.

(c) No transfer of structured settlement payment rights shall extend to any payments that are life-contingent unless, prior to the date on which the payee signs the transfer agreement, the transferee has established and has agreed to maintain procedures reasonably satisfactory to the annuity issuer and the structured settlement obligor for (i) periodically confirming the payee’s survival, and (ii) giving the annuity issuer and the structured settlement obligor prompt written notice in the event of the payee’s death.

(d) No payee who proposes to make a transfer of structured settlement payment rights shall incur any penalty, forfeit any application fee or other payment, or otherwise incur any liability to the proposed transferee or any assignee based on any failure of such transfer to satisfy the conditions of this Act.

(e) Nothing contained in this Act shall be construed to authorize any transfer of structured settlement payment rights in contravention of any law or to imply that any transfer under a transfer agreement entered into prior to the effective date of this Act is valid or invalid.

(f) Compliance with the requirements set forth in Section 3 of this Act and fulfillment of the conditions set forth in Section 4 of this Act shall be solely the responsibility of the transferee in any transfer of structured settlement payment rights, and neither the structured settlement obligor nor the annuity issuer shall bear any responsibility for, or any liability arising from, noncompliance with such requirements or failure to fulfill such conditions.

EFFECTIVE DATE. This Act shall apply to any transfer of structured settlement payment rights under a transfer agreement entered into on or after the [thirtieth (30th)] day after the date of enactment of this Act; provided, however, that nothing contained herein shall imply that any transfer under a transfer agreement reached prior to such date is either effective or ineffective.

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: 46A-6H-1 et seq. (SB 18)

Enacted 4/17/1999

Effective 7/1/1999

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

§ 46A-6H-1. Definitions
For the purposes of this article:
(1) "Closing date" means the date the transfer agreement is executed by the consumer and the transferee, and shall be at least fourteen days after the requisite disclosures have been provided to the consumer and interested parties.
(2) "Consumer" means any person entitled to receive periodic future payments from an annuity issuer, settlement obligor or any other party as the result of an annuity, settlement, lottery winnings, sweepstakes payoff or other future payment arrangement.
(3) "Discounted present value" means the fair present value of future payments, as determined by discounting such payments to the present using the most recently published applicable federal rate for determining the present value of an annuity, as issued by the United States Internal Revenue Service.
(4) "Favorable tax determination" means, with respect to a proposed transfer of structured settlement payment rights, any of the following authorities that are applicable to the parties to such transfer and on the parties to the structured settlement agreement and any qualified assignment agreement and establish that the federal income tax treatment of the structured settlement for the parties to the structured settlement agreement and any qualified assignment agreement, other than the consumer, will not be adversely affected by such transfer:
(i) A United States Treasury regulation;
(ii) A published ruling by the United States Internal Revenue Service;
(iii) A private letter ruling by the United States Internal Revenue Service with respect to such transfer; or
(iv) Other applicable legal authority that is binding on the United States Internal Revenue Service.
(5) "Interested party" means an insurance company, an annuity issuer, a structured settlement obligor, a lottery, a beneficiary irrevocably designated in an agreement to receive future payments following the consumer's death or other entity obligated to pay to a consumer any future payments or any other party that has continuing rights or obligations under the structured settlement agreement.
(6) "Qualified assignment agreement" means an agreement providing for a qualified assignment within the meaning of section 130 [26 U.S.C. § 130] of the United States Internal Revenue Code, United States Code Title 26, as amended from time to time.
(7) "Structured settlement" means an arrangement whereby a settlement obligor, an annuity issuer or other person agrees to make future payments to a consumer in resolution of a personal injury or other claim.
(8) "Structured settlement payment rights" means the right to receive periodic payments, including lump sum payments, under a structured settlement from a settlement obligor, annuity issuer, or other person.
(9) "Transfer" means any sale, assignment or other conveyance of future payment rights by a consumer to a transferee for consideration.
(10) "Transfer agreement" means an agreement providing for the transfer of future payment rights from a consumer to a transferee.
(11) "Transferee" means any person or entity that becomes entitled to receive a consumer's future payments as a result of a transfer agreement and includes companies in the business of purchasing future payments.

§ 46A-6H-2. Disclosure requirements prior to transfer
(a) In order for any transfer by a consumer to a transferee to be effective, the transferee shall provide the following disclosures in writing, in bold, twelve point type, to the consumer at least fourteen days prior to the earlier of the closing date or the hearing on the transfer when court approval is required by the provisions of this article:
(1) The amount of each future payment to be transferred by the consumer and the date such payments were due to the consumer;
(2) The aggregate amount of the future payments to be transferred by the consumer;
(3) The discounted present value of the future payments to be transferred by the consumer and the discount rate used in the calculation, as determined by discounting the payments to the present using the most recently published applicable federal rate for determining the present value of an annuity as issued by the United States Internal Revenue Service;
(4) The discount rate used in subdivision (3) of this section stated in terms of an annual percentage rate;
(5) The lump sum payable to the consumer in exchange for transferring the future payments;
(6) A good faith estimate of all commissions, fees, rebates, service charges, application fees, processing fees, closing costs, filing fees, administrative charges and other commissions, fees, costs, expenses and charges to be paid by the consumer or deducted from the lump sum in connection with the transfer;
(7) The net amount payable to the consumer after the deduction of all commissions, fees, costs, expenses and charges described in subdivision (6) of this section; and
(8) A statement that there may be adverse tax consequences affecting the consumer as a result of the transfer and that the consumer is advised to seek the advice of an attorney or accountant.
(b) The transferee shall also provide written notice to all interested parties at least fourteen days prior to the earlier of the closing date of the transfer or the hearing when court approval is required including:
(1) The closing date of the transfer, or the date, time and place of the hearing;
(2) A copy of the disclosure statement required by subsection (a) of this section; and
(3) The name, address and taxpayer identification number of the transferee.
(c) If the transfer requires court approval pursuant to section three [§ 46A-6H-3] of this article, then the transferee shall also provide the disclosure statement required by subsection (a) of this section to the court and the guardian ad litem, if one is named by the court.

§ 46A-6H-3. Requirement of court approval for certain structured settlement transfers
(a) In addition to the requirements of this article, the transfer agreement shall be approved by the circuit court of the county wherein the consumer resides or where the structured settlement agreement was executed when:
(1) The structured settlement payment rights belong to an infant or an incompetent person; or
(2) The structured settlement payment rights arise from a personal injury or other claim and:
(i) The aggregate of the structured settlement payment rights exceeds forty thousand dollars; or
(ii) The structured settlement agreement contains a provision restricting the right of the consumer to assign or transfer the consumer's future payment rights.
(b) The transferee shall commence the action by filing a petition with the court seeking approval of the transfer, and providing to the court the disclosure statement required by subsection (a), section two [§ 46A-6H-2(a)] of this article.
(c) The circuit court shall set a time and date for a hearing on the matter within twenty-one days of the date of the filing of the petition. The transferee shall notify the consumer and all interested parties of the date and time of the hearing and provide them with a copy of the petition.
(d) The court shall appoint a guardian ad litem in cases where the structured settlement payment rights belong to an infant, an incompetent person or a ward of the court. The guardian ad litem shall review the requisite disclosures and make an independent inquiry to determine whether the proposed transfer is fair, reasonable and in the best interests of the consumer. Such information shall be reported to the court during the hearing on the matter.
(e) An interested party has the right to appear and contest the proposed transfer at the time of the hearing. If, after proper notice, the interested party does not make an appearance, then the interested party shall be bound by the court's ruling.
(f) After a hearing or upon its own motion, the court may approve the transfer if the court finds that:
(1) The consumer has demonstrated that: (A) He or she, or his or her family, is facing a financial hardship and that the transfer would not subject the consumer or the consumer's family to undue financial hardship in the future; or (B) the transfer is in the best interest of the consumer: Provided, That the judge shall disclose the possible adverse tax consequence to the consumer;
(2) The transferee is in compliance with the provisions of section two [§ 46A-6H-2] of this article; and
(3) The transfer agreement does not contravene the terms of the structured settlement agreement, including any restrictions on the right of the consumer to transfer his or her structured settlement payment rights, unless the annuity issuer and structured settlement obligor have consented to the transfer. However, the approval of the annuity issuer and the structured settlement obligor shall not be required if, at the time the consumer and the transferee entered into the transfer agreement, a favorable tax determination was in effect.
(g) The court shall award the guardian ad litem reasonable fees for representing the consumer. Such fees shall be paid by the transferee.
(h) A consumer may request court approval for a transfer that does not mandate court approval under this section. Such voluntary petition by the consumer shall then become subject to the provisions of this section. The transferee shall be responsible for filing the action pursuant to subsection (b) of this section, and the consumer shall be responsible for attorney's fees or guardian ad litem fees.

§ 46A-6H-4. Prohibiting transfer agreements of worker's compensation claims and other transfer agreements that contravene law
Any agreement to transfer future payments arising under a worker's compensation claim is prohibited as is any other agreement to transfer future payments that would contravene existing law.

§ 46A-6H-5. Right of recision
(a) Any consumer who enters into a transfer agreement shall have an absolute, nonwaiveable right of recision for five business days following the closing date of the transfer. During the five-day recision period, the consumer may rescind the transfer agreement by phone, mail or facsimile, effective upon receipt, without penalty or further obligation to the transferee, except that any amounts advanced by the transferee to the consumer in contemplation of the transfer shall be immediately refunded to the transferee.
(b) When a transfer requires court approval, the consumer may rescind without penalty until the court order is entered appointing a guardian ad litem. When the consumer dismisses the action after the appointment of a guardian ad litem or rescinds the transfer agreement within five business days of court approval of the transfer, the consumer shall be responsible for the filing fee and any guardian ad litem fees.
(c) Notice of the right of recision shall be provided to the consumer in writing by the transferee prior to the time of closing.

§ 46A-6H-6. Remedies; effective date; nonwaiver
(a) This article shall apply to transfer agreements of future payment rights executed after the effective date of this article. Nothing in this article shall be construed to impair, limit, affect or otherwise apply to any transfer agreement executed prior to the effective date of this article.
(b) A violation of a provision of this article by the transferee is an unfair or deceptive act or practice in the conduct of commerce pursuant to the provisions of article six, section one hundred four [§ 46A-6-104] of this chapter. The remedy provided for in this section is in addition to other remedies provided for by law.
(c) The provisions of this article may not be waived.

§ 46A-6H-7. Protection from liability to consumer
When an interested party makes payments to the transferee pursuant to a court order of approval or a transfer agreement executed in accordance with the provisions of this article, the interested party and the transferee are not liable to the consumer or other interested party for the transfer of the consumer's future payments.

§ 46A-6H-8. Registration with the secretary of state
(a) A transferee or other person in the business of soliciting or purchasing future payments shall file a registration statement with the secretary of state before advertising or arranging transfers of consumer's future payment rights in this state. The registration statement shall contain:
(1) The name and address of the transferee;
(2) The name and address of the transferee's agent for service of process within the state, or if the company does not have one within the state, a statement that the secretary of state will serve as the agent for service of process; and
(3) A full and complete disclosure of any prior or pending litigation involving alleged violations of this article's provisions or consumer complaints filed with the attorney general's office of this state that allege violations of this article's provisions, or a notarized statement that there has been no such litigation or unresolved complaint relating to the operations of the transferee.
(b) The transferee shall update the statement within thirty days after a change of information occurs.
(c) Each transferee registering pursuant to the provisions of this section shall maintain a copy of the registration statement. The transferee shall allow a consumer, interested party or court to inspect the registration statement on request.
(d) The secretary of state may charge each transferee that files a registration statement with the secretary of state a reasonable fee not to exceed one hundred dollars to cover the cost of filing.

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: (WA H.B. 1347)

Enacted 5/7/2001

Effective 7/22/2001

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

NEW SECTION. Sec. 1. This chapter may be known and cited as the structured

settlement protection act.

NEW SECTION. Sec. 2. The definitions in this section apply throughout this

chapter unless the context clearly requires otherwise.

(1) "Annuity issuer" means an insurer that has issued a contract to fund

periodic payments under a structured settlement.

(2) "Dependents" means a payee's spouse and minor children and all other

persons for whom the payee is legally obligated to provide support, including

alimony.

(3) "Discounted present value" means the present value of future payments

determined by discounting such payments to the present using the most recently

published applicable federal rate for determining the present value of an

annuity, as issued by the United States internal revenue service.

(4) "Gross advance amount" means the sum payable to the payee or for the

payee's account as consideration for a transfer of structured settlement

payment rights before any reductions for transfer expenses or other deductions

to be made from such consideration.

(5) "Independent professional advice" means advice of an attorney, certified

public accountant, actuary, or other licensed professional adviser.

(6) "Interested parties" means, with respect to any structured settlement, the

payee, any beneficiary irrevocably designated under the annuity contract to

receive payments following the payee's death, the annuity issuer, the

structured settlement obligor, and any other party that has continuing rights

or obligations under such structured settlement.

(7) "Net advance amount" means the gross advance amount less the aggregate

amount of the actual and estimated transfer expenses required to be disclosed

under section 3(5) of this act.

(8) "Payee" means an individual who is receiving tax-free payments under a

structured settlement and proposes to make a transfer of payment rights

thereunder.

 

(9) "Periodic payments" means (a) recurring payments and (b) scheduled future

lump sum payments.

(10) "Qualified assignment agreement" means an agreement providing for a

qualified assignment within the meaning of section 130 of the United States

Internal Revenue Code (26 U.S.C. Sec. 130), as amended.

(11) "Responsible administrative authority" means, with respect to a structured

settlement, any government authority vested by law with exclusive jurisdiction

over the settled claim resolved by such structured settlement.

(12) "Settled claim" means the original tort claim or workers' compensation

claim resolved by a structured settlement.

(13) "Structured settlement" means an arrangement for periodic payment of

compensation for injuries or sickness as described in 26 U.S.C. Sec. 104(a)(1)

or (2), as amended, or an arrangement for periodic payment of benefits under a

special needs trust as described in 42 U.S.C. Sec. 1396p(d)(4), as amended.

(14) "Structured settlement agreement" means the agreement, judgment,

stipulation, or release embodying the terms of a structured settlement.

(15) "Structured settlement obligor" means, with respect to any structured

settlement, the party that has the continuing obligation to make periodic

payments to the payee under a structured settlement agreement or a qualified

assignment agreement.

(16) "Structured settlement payment rights" means rights to receive periodic

payments under a structured settlement, whether from the structured settlement

obligor or the annuity issuer, if:

(a) The payee is domiciled in, or the domicile or principal place of business

of the structured settlement obligor or the annuity issuer is located in, this

state;

(b) The structured settlement agreement was approved by a court or responsible

administrative authority in this state; or

(c) The structured settlement agreement is expressly governed by the laws of

this state.

(17) "Terms of the structured settlement" means, with respect to any structured

settlement, the terms of the structured settlement agreement, the annuity

contract, any qualified assignment agreement and any order or other approval of

any court or responsible administrative authority or other government authority

that authorized or approved such structured settlement.

(18) " Transfer " means any sale, assignment, pledge, hypothecation or other

alienation or encumbrance of structured settlement payment rights made by a

payee for consideration. However, " transfer " does not mean the creation or

perfection of a security interest in structured settlement payment rights under

a blanket security agreement entered into with an insured depository

institution, in the absence of any action to redirect the structured settlement

payments to such insured depository institution, or an agent or successor in

interest thereof, or otherwise to enforce such blanket security interest

against the structured settlement payment rights.

(19) " Transfer agreement" means the agreement providing for a transfer of

structured settlement payment rights.

(20) " Transfer expenses" means all expenses of a transfer that are required

under the transfer agreement to be paid by the payee or deducted from the gross

advance amount, including, without limitation, court filing fees, attorneys'

fees, escrow fees, lien recordation fees, judgment and lien search fees,

finders' fees, commissions, and other payments to a broker or other

intermediary. "Transfer expenses" does not mean preexisting obligations of the

payee payable for the payee's account from the proceeds of a transfer.

(21) "Transferee" means a party acquiring or proposing to acquire structured

settlement payment rights through a transfer.

NEW SECTION. Sec. 3. Not less than three days prior to the date on which a

payee signs a transfer agreement, the transferee shall provide to the payee a

separate disclosure statement, in bold type no smaller than 14 points, setting

forth:

(1) The amounts and due dates of the structured settlement payments to be

transferred;

(2) The aggregate amount of such payments;

(3) The discounted present value of the payments to be transferred, which

shall be identified as the "calculation of current value of the transferred

structured settlement payments under federal standards for valuing annuities",

and the amount of the applicable federal rate used in calculating such

discounted present value;

(4) The gross advance amount;

(5) An itemized listing of all applicable transfer expenses, other than

attorneys' fees and related disbursements payable in connection with the

transferee's application for approval of the transfer, and the transferee's

best estimate of the amount of any such fees and disbursements;

(6) The net advance amount;

(7) The amount of any penalties or liquidated damages payable by the payee in

the event of any breach of the transfer agreement by the payee; and

 

(8) A statement that the payee has the right to cancel the transfer agreement,

without penalty or further obligation, not later than the third business day

after the date the agreement is signed by the payee.

NEW SECTION. Sec. 4. A direct or indirect transfer of structured settlement

payment rights is not effective and a structured settlement obligor or annuity

issuer is not required to make any payment directly or indirectly to any

transferee of structured settlement payment rights unless the transfer has been

approved in advance in a final court order or order of a responsible

administrative authority based on express findings by such court or responsible

administrative authority that:

(1) The transfer is in the best interest of the payee, taking into account the

welfare and support of the payee's dependents;

(2) The payee has been advised in writing by the transferee to seek independent

professional advice regarding the transfer and has either received such advice

or knowingly waived such advice in writing; and

(3) The transfer does not contravene any applicable statute or the order of any

court or other government authority.

NEW SECTION. Sec. 5. Following a transfer of structured settlement payment

rights under this chapter:

(1) The structured settlement obligor and the annuity issuer shall, as to all

parties except the transferee, be discharged and released from any and all

liability for the transferred payments;

(2) The transferee shall be liable to the structured settlement obligor and the

annuity issuer:

(a) If the transfer contravenes the terms of the structured settlement, for

any taxes incurred by such parties as a consequence of the transfer; and

(b) For any other liabilities or costs, including reasonable costs and

attorneys' fees, arising from compliance by such parties with the order of the

court or responsible administrative authority or arising as a consequence of

the transferee's failure to comply with this chapter;

(3) Neither the annuity issuer nor the structured settlement obligor may be

required to divide any periodic payment between the payee and any transferee or

assignee or between two, or more, transferees or assignees; and

(4) Any further transfer of structured settlement payment rights by the payee

may be made only after compliance with all of the requirements of this chapter.

NEW SECTION. Sec. 6. (1) An application under this chapter for approval of a

transfer of structured settlement payment rights shall be made by the

transferee and may be brought in the county in which the payee resides, in the

county in which the structured settlement obligor or the annuity issuer

maintains its principal place of business, or in any court or before any

responsible administrative authority which approved the structured settlement

agreement.

(2) Not less than twenty days prior to the scheduled hearing on any application

for approval of a transfer of structured settlement payment rights under

section 4 of this act, the transferee shall file with the court or responsible

administrative authority and serve on all interested parties a notice of the

proposed transfer and the application for its authorization, including with

such notice:

(a) A copy of the transferee's application;

(b) A copy of the transfer agreement;

(c) A copy of the disclosure statement required under section 3 of this act;

(d) A listing of each of the payee's dependents, together with each dependent's

age;

(e) Notification that any interested party is entitled to support, oppose, or

otherwise respond to the transferee's application, either in person or by

counsel, by submitting written comments to the court or responsible

administrative authority or by participating in the hearing; and

(f) Notification of the time and place of the hearing and notification of the

manner in which and the time by which written responses to the application must

be filed, which may not be less than fifteen days after service of the

transferee's notice, in order to be considered by the court or responsible

administrative authority.

NEW SECTION. Sec. 7. (1) The provisions of this chapter may not be waived by

any payee.

(2) Any transfer agreement entered into on or after the effective date of this

act by a payee who resides in this state shall provide that disputes under such

transfer agreement, including any claim that the payee has breached the

agreement, shall be determined in and under the laws of this state. Such a

transfer agreement may not authorize the transferee or any other party to

confess judgment or consent to entry of judgment against the payee.

(3) Transfer of structured settlement payment rights do not extend to any

payments that are life contingent unless, prior to the date on which the payee

signs the transfer agreement, the transferee has established and has agreed to

maintain procedures reasonably satisfactory to the annuity issuer and the

structured settlement obligor for (a) periodically confirming the payee's

survival, and (b) giving the annuity issuer and the structured settlement

obligor prompt written notice in the event of the payee's death.

 

(4) No payee who proposes to make a transfer of structured settlement payment

rights may incur any penalty, forfeit any application fee or other payment, or

otherwise incur any liability to the proposed transferee or any assignee based

on any failure of such a transfer to satisfy the conditions of this chapter.

(5) This chapter does not authorize any transfer of structured settlement

payment rights in contravention of any law, nor does it imply that any

transfer under a transfer agreement entered into prior to the effective date of

this act is valid or invalid.

(6) Compliance with the requirements set forth in section 3 of this act and

fulfillment of the conditions set forth in section 4 of this act is the sole

responsibility of the transferee in any transfer of structured settlement

payment rights, and neither the structured settlement obligor nor the annuity

issuer bear any responsibility for, or any liability arising from,

noncompliance with the requirements or failure to fulfill the conditions.

NEW SECTION. Sec. 8. Sections 1 through 7 of this act constitute a new chapter

in Title 19 RCW.

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: §59.1-475 et. seq., (House Bill 1810)

Enacted 3/23/2001

Effective 7/1/2001

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

An Act to amend and reenact §§ 59.1-475 and 59.1-477.1 of the Code of Virginia, relating to the Structured Settlement Protection Act; application to workers' compensation benefit payments.

Be it enacted by the General Assembly of Virginia:

1.  That §§ 59.1-475 and 59.1-477.1 of the Code of Virginia are amended and reenacted as follows:

§ 59.1-475. Definitions.
For purposes of this chapter:
"Annuity issuer" means an insurer that has issued a contract to fund periodic payments under a structured settlement.
"Dependents" include a payee's spouse and minor children and all other persons for whom the payee is legally obligated to provide support, including alimony.
"Discounted present value" means the present value of future payments determined by discounting such payments to the present using the most recently published Applicable Federal Rate for determining the present value of an annuity, as issued by the United States Internal Revenue Service.
"Gross advance amount" means the sum payable to the payee or for the payee's account as consideration for a transfer of structured settlement payment rights before any reductions for transfer expenses or other deductions to be made from such consideration.
"Independent professional advice" means advice of an attorney, certified public accountant, actuary or other licensed professional adviser.
"Interested parties" means, with respect to any structured settlement, the payee, any beneficiary irrevocably designated under the annuity contract to receive payments following the payee's death, the annuity issuer, the structured settlement obligor, and any other party that has continuing rights or obligations under such structured settlement.
"Net advance amount" means the gross advance amount less the aggregate amount of the actual and estimated transfer expenses required to be disclosed under subdivision 5 of § 59.1-477.1.
"Payee" means an individual who is receiving tax free payments under a structured settlement and proposes to make a transfer of payment rights thereunder.
"Periodic payments" includes both recurring payments and scheduled future lump sum payments.
"Qualified assignment agreement" means an agreement providing for a qualified assignment within the meaning of § 130 of the United States Internal Revenue Code, United States Code Title 26, as amended from time to time.
"Responsible administrative authority" means, with respect to a structured settlement, any governmental authority vested by law with exclusive jurisdiction over the settled claim resolved by such structured settlement.
"Settled claim" means the original tort claim resolved by a structured settlement.
"Structured settlement" means an arrangement for periodic payment of damages for personal injuries or sickness established by settlement or judgment in resolution of a tort claim.
"Structured settlement agreement" means the agreement, judgment, stipulation, or release embodying the terms of a structured settlement.
"Structured settlement obligor" means, with respect to any structured settlement, the party that has the continuing obligation to make periodic payments to the payee under a structured settlement agreement or a qualified assignment agreement.
"Structured settlement payment rights" means rights to receive periodic payments under a structured settlement, whether from the structured settlement obligor or the annuity issuer, where the payee is domiciled in, or the domicile or principal place of business of the structured settlement obligor or the annuity issuer is located in, this Commonwealth; or the structured settlement agreement was approved by a court or responsible administrative authority in this Commonwealth; or the structured settlement agreement is expressly governed by the laws of this Commonwealth.
"Terms of the structured settlement" include, with respect to any structured settlement, the terms of the structured settlement agreement, the annuity contract, any qualified assignment agreement, and any order or other approval of any court or responsible administrative authority or other government authority that authorized or approved such structured settlement.
"Transfer" means any sale, assignment, pledge, hypothecation, or other alienation or encumbrance of structured settlement payment rights made by a payee for consideration; however, the term "transfer" shall not include the creation or perfection of a security interest in structured settlement payment rights under a blanket security agreement entered into with an insured depository institution, in the absence of any action to redirect the structured settlement payments to such insured depository institution, or an agent or successor in interest thereof, or otherwise to enforce such blanket security interest against the structured settlement payment rights.
"Transfer agreement" means the agreement providing for transfer of structured settlement payment rights.
"Transfer expenses" means all expenses of a transfer that are required under the transfer agreement to be paid by the payee or deducted from the gross advance amount, including, without limitation, court filing fees, attorneys' fees, escrow fees, lien recordation fees, judgment and lien search fees, finders' fees, commissions, and other payments to a broker or other intermediary; however, "transfer expenses" shall not include preexisting obligations of the payee payable for the payee's account from the proceeds of a transfer.
"Transferee" means a party acquiring or proposing to acquire structured settlement payment rights through a transfer.

§59.1-477.1. Required disclosures to payee
Not less than three days prior to the date on which a payee signs a transfer agreement, the transferee shall provide to the payee a separate disclosure statement, in bold type no smaller than fourteen points, setting forth:
1. The amounts and due dates of the structured settlement payments to be transferred;
2. The aggregate amount of such payments;
3. The discounted present value of the payments to be transferred, which shall be identified as the "calculation of current value of the transferred structured settlement payments under federal standards for valuing annuities," and the amount of the Applicable Federal Rate used in calculating such discounted present value;
4. The gross advance amount;
5. An itemized listing of all applicable transfer expenses, other than attorneys' fees and related disbursements payable in connection with the transferee's application for approval of the transfer, and the transferee's best estimate of the amount of any such fees and disbursements;
6. The net advance amount;
7. The amount of any penalties or liquidated damages payable by the payee in the event of any breach of the transfer agreement by the payee; and
8. A statement that the payee has the right to cancel the transfer agreement, without penalty or further obligation, not later than the third business day after the date the agreement is signed by the payee.

§ 59.1-476. Approval of transfers of structured settlement payment rights
No direct or indirect transfer of structured settlement payment rights shall be effective and no structured settlement obligor or annuity issuer shall be required to make any payment directly or indirectly to any transferee of structured settlement payment rights unless the transfer has been authorized in advance in a final court order or order of a responsible administrative authority based on express findings by such court or responsible administrative authority that:
1. The transfer is in the best interest of the payee, taking into account the welfare and support of the payee's dependents;
2. The payee has been advised in writing by the transferee to seek independent professional advice regarding the transfer and has either received such advice or knowingly waived such advice in writing; and
3. The transfer does not contravene any applicable statute or the order of any court or other government authority.

§ 59.1-476.1. Effects of transfer of structured settlement payment rights
Following a transfer of structured settlement payment rights under this chapter:
1. The structured settlement obligor and the annuity issuer shall, as to all parties except the transferee, be discharged and released from any and all liability for the transferred payments;
2. The transferee shall be liable to the structured settlement obligor and the annuity issuer:
a. If the transfer contravenes the terms of the structured settlement, for any taxes incurred by such parties as a consequence of the transfer; and
b. For any other liabilities or costs, including reasonable costs and attorneys' fees, arising from compliance by such parties with the order of the court or responsible administrative authority or arising as a consequence of the transferee's failure to comply with this chapter;
3. Neither the annuity issuer nor the structured settlement obligor may be required to divide any periodic payment between the payee and any transferee or assignee or between two or more transferees or assignees; and
4. Any further transfer of structured settlement payment rights by the payee may be made only after compliance with all of the requirements of this chapter.

§ 59.1-477. Procedure for approval of transfers
A. An application under this chapter for approval of a transfer of structured settlement payment rights shall be made by the transferee and may be brought in the state in which the payee resides, in the state in which the structured settlement obligor or the annuity issuer maintains its principal place of business, or in any court or before any responsible administrative authority that approved the structured settlement agreement. Applications brought in Virginia shall be brought in circuit court, and such court may refer the matter to a commissioner of accounts for a report to such court and a recommendation on the findings required by § 59.1-476. Such report and recommendation shall be filed with the court and mailed to all interested parties served under subsection B of this section, and such report and recommendation and any exceptions thereto shall be examined by the court and confirmed or corrected as provided in § 26-33.
B. Not less than twenty days prior to the scheduled hearing on any application for approval of a transfer of structured settlement payment rights under § 59.1-476, the transferee shall file with the court or responsible administrative authority and serve on all interested parties a notice of the proposed transfer and the application for its approval, including with such notice:
1. A copy of the transferee's application;
2. A copy of the transfer agreement;
3. A copy of the disclosure statement required under § 59.1-475.1;
4. A listing of each of the payee's dependents, together with each dependent's age;
5. Notification that any interested party is entitled to support, oppose or otherwise respond to the transferee's application, either in person or by counsel, by submitting written comments to the court or responsible administrative authority or by participating in the hearing; and
6. Notification of the time and place of the hearing and notification of the manner in which and the time by which written responses to the application must be filed (which shall be not less than fifteen days after service of the transferee's notice) in order to be considered by the court or the responsible administrative authority.

§ 59.1-477.1. General provisions, construction
A. The provisions of this chapter may not be waived by any payee.
B. Any transfer agreement entered into on or after the effective date of the act of the General Assembly enacting this section by a payee who resides in this Commonwealth shall provide that disputes under such transfer agreement, including any claim that the payee has breached the agreement, shall be determined in and under the laws of this Commonwealth. No such transfer agreement shall authorize the transferee or any other party to confess judgment or consent to entry of judgment against the payee.
C. No transfer of structured settlement payment rights shall extend to any payments that are life-contingent unless, prior to the date on which the payee signs the transfer agreement, the transferee has established and has agreed to maintain procedures reasonably satisfactory to the annuity issuer and the structured settlement obligor for periodically confirming the payee's survival, and giving the annuity issuer and the structured settlement obligor prompt written notice in the event of the payee's death.
D. No payee who proposes to make a transfer of structured settlement payment rights shall incur any penalty, forfeit any application fee or other payment, or otherwise incur any liability to the proposed transferee or any assignee based on any failure of such transfer to satisfy the conditions of this chapter.
E. Nothing contained in this chapter shall be construed to authorize any transfer of structured settlement payment rights in contravention of any law or to imply that any transfer under a transfer agreement entered into prior to July 1, 2001, is valid or invalid. The provisions of this chapter shall not be applicable to transfers of workers' compensation claims, awards, benefits, settlements or payments made or payable pursuant to Title 65.2.
F. Compliance with the requirements set forth in § 59.1-475.1 and fulfillment of the conditions set forth in § 59.1-476 shall be solely the responsibility of the transferee in any transfer of structured settlement payment rights, and neither the structured settlement obligor nor the annuity issuer shall bear any responsibility for, or any other liability arising from, non-compliance with such requirements or failure to fulfill such conditions.

It is hereby enacted by the General Assembly of the State of Vermont:
Sec. 1. 9 V.S.A. chapter 63, subchapter 5 is added to read:
Subchapter 5. Transfers of Structured Settlements
§ 2480aa. LEGISLATIVE INTENT; PUBLIC POLICY
Structured settlement agreements, which provide for payments to a person over a period of time, are often used in the settlement of actions such as personal injury or medical claims and serve a number of valid purposes, including protection of persons from economic victimization and assuring a person’s ability to provide for his or her future needs and obligations. It is the policy of this state that such agreements, which have often been approved by a court, should not be set aside lightly or without good reason.

§ 2480bb. DEFINITIONS
In this subchapter:
(1) “Annuity issuer” means an insurer that has issued a contract to fund periodic payments under a structured settlement.

(2) “Dependents” includes a payee’s spouse and minor children and all other persons for whom the payee is legally obligated to provide support, including alimony.

No. 168 Page 2 of 16
VT LEG 281044.1
(3) “Discounted present value” means the present value of future payments determined by discounting such payments to the present using the most recently published Applicable Federal Rate for determining the present value of an annuity, as issued by the United States Internal Revenue Service.
(4) “Gross advance amount” means the sum payable to the payee or for the payee’s account as consideration for a transfer of structured settlement payment rights before any reductions for transfer expenses or other deductions to be made from such consideration.
(5) “Independent professional advice” means advice of an attorney, certified public accountant, actuary, or other licensed professional adviser meeting all of the following requirements:
(A) The advisor is engaged by the payee to render advice concerning the legal, tax, or financial implications of a structured settlement or a transfer of structured settlement payment rights;
(B) The adviser’s compensation for rendering independent professional advice is not affected by occurrence or lack of occurrence of a settlement transfer; and
(C) A particular adviser is not referred to the payee by the transferee or its agent, except that the transferee may refer the payee to a lawyer referral service or agency operated by a state or local bar association. No. 168 Page 3 of 16

VT LEG 281044.1

(6) “Interested parties” means, with respect to any structured settlement, the payee, any beneficiary irrevocably designated under the annuity contract to receive payments following the payee’s death, the annuity issuer, the structured settlement obligor, and any other party that has continuing rights or obligations relating to the structured settlement payment rights which are the subject of the proposed transfer.
(7) “Net advance amount” means the gross advance amount less the aggregate amount of the actual and estimated transfer expenses required to be disclosed under subdivision 2480cc(5) of this title.
(8) “Payee” means an individual who is receiving tax-free payments under a structured settlement and proposes to make a transfer of payment rights thereunder.
(9) “Periodic payments” includes both recurring payments and scheduled future lump sum payments.
(10) “Qualified assignment agreement” means an agreement providing for a qualified assignment within the meaning of section 130 of the United States Internal Revenue Code, United States Code Title 26, as amended from time to time.
(11) “Settled claim” means the original tort claim resolved by a structured settlement.

No. 168 Page 4 of 16
VT LEG 281044.1
(12) “Structured settlement” means an arrangement for periodic payment of damages for personal injuries or sickness established by settlement or judgment in resolution of a tort claim but does not refer to periodic payments in settlement of a workers’ compensation claim.
(13) “Structured settlement agreement” means the agreement, judgment, stipulation, or release embodying the terms of a structured settlement.
(14) “Structured settlement obligor” means, with respect to any structured settlement, the party that has the continuing obligation to make periodic payments to the payee under a structured settlement agreement or a qualified assignment agreement.
(15) “Structured settlement payment rights” means rights to receive periodic payments under a structured settlement, whether from the structured settlement obligor or the annuity issuer, where:
(A) the payee is domiciled in this state; or
(B) the structured settlement agreement was approved by a court in this state.
(16) “Terms of the structured settlement” include, with respect to any structured settlement, the terms of the structured settlement agreement, the annuity contract, any qualified assignment agreement, and any order or other approval of any court or other government authority that authorized or approved such structured settlement.

No. 168 Page 5 of 16
VT LEG 281044.1
(17) “Transfer” means any sale, assignment, pledge, hypothecation, or other alienation or encumbrance of structured settlement payment rights made by a payee for consideration.
(18) “Transfer agreement” means the agreement providing for a transfer of structured settlement payment rights.
(19) “Transfer expenses” means all expenses of a transfer that are required under the transfer agreement to be paid by the payee or deducted from the gross advance amount, including, without limitation, court filing fees, attorney’s fees, escrow fees, lien recordation fees, judgment and lien search fees, finders’ fees, commissions, and other payments to a broker or other intermediary.
(20) “Transferee” means a party acquiring or proposing to acquire structured settlement payment rights through a transfer. § 2480cc. REQUIRED DISCLOSURES TO PAYEE
Not less than ten days prior to the date on which a payee signs a transfer agreement, the transferee shall provide to the payee a separate disclosure statement in bold type in a size no smaller than 14 points setting forth: (1) the amounts and due dates of the structured settlement payments to be transferred;
(2) the aggregate amount of such payments;

No. 168 Page 6 of 16
VT LEG 281044.1
(3) the discounted present value of the payments to be transferred, which shall be identified as the “calculation of current value of the transferred structured settlement payments under federal standards for valuing annuities,” and the amount of the applicable federal rate used in calculating such discounted present value;
(4) the gross advance amount and the annual discount rate, compounded monthly, used to determine such figure;
(5) an itemized listing of all applicable transfer expenses, other than attorneys’ fees and related disbursements payable by the payee in connection with the transferee’s application for approval of the transfer, and the transferee’s best estimate of the amount of any such fees and disbursements; (6) the net advance amount;
(7) the amount of any penalties or liquidated damages payable by the payee in the event of any breach of the transfer agreement by the payee, as well as a description of any other financial penalties the payee might incur with the transferee as a result of such a breach; and
(8) a statement that the payee has the right to cancel the transfer agreement, without penalty or further obligation, at any time before the date on which a court enters a final order approving the transfer agreement.

No. 168 Page 7 of 16
VT LEG 281044.1
§ 2480dd. APPROVAL OF TRANSFERS OF STRUCTURED

SETTLEMENT PAYMENT RIGHTS

(a) No direct or indirect transfer of structured settlement payment rights shall be effective and no structured settlement obligor or annuity issuer shall be required to make any payment directly or indirectly to any transferee of structured settlement payment rights unless the transfer has been approved in advance in a final court order based on express findings by such court that:
(1) the transfer is in the best interest of the payee taking into account the welfare and support of the payee’s dependents, considering all relevant factors, including:
(A) the payee’s ability to understand the financial terms and consequences of the transfer;
(B) the payee’s capacity to meet his or her financial obligations, including the potential need for future medical treatment;
(C) the need, purpose, or reason for the transfer; and
(D) whether the transfer is fair and reasonable, considering the discount rate used to calculate the gross advance amount, the fees and expenses imposed on the payee, and whether the payee obtained more than one quote for the same or a substantially similar transfer.

No. 168 Page 8 of 16
VT LEG 281044.1
(2)(A) the payee has been advised in writing by the transferee to seek independent professional advice regarding the financial advisability of the transfer and the other financial options available to the payee, if any, and:
(B)(i) that the payee has in fact received such advice; or
(ii) that such advice is unnecessary for good cause shown.
(3) the transfer does not contravene any applicable statute or the order of any court or other government authority.
(b) Any agreement to transfer future payments arising under a workers’ compensation claim is prohibited.
(c) At the hearing on the transfer the court may, in its sole discretion, continue the hearing and require the payee to seek independent professional advice if the court determines that obtaining such advice should be required based on the circumstances of the payee or the terms of the transaction. If the court determines that independent professional advice should be required, the court may order that the costs incurred by a payee for independent professional advice be paid by the transferee, the payee, or another party, provided that the amount to be paid by the transferee shall not exceed one thousand five hundred dollars ($1,500.00).

No. 168 Page 9 of 16
VT LEG 281044.1
§ 2480ee. EFFECTS OF TRANSFER OF STRUCTURED SETTLEMENT
PAYMENT RIGHTS Following a transfer of structured settlement payment rights under this subchapter:
(1) The structured settlement obligor and the annuity issuer shall, as to all parties except the transferee, be discharged and released from any and all liability for the transferred payments;
(2) The transferee shall be liable to the structured settlement obligor and the annuity issuer:
(A) if the transfer contravenes the terms of the structured settlement for any taxes incurred by such parties as a consequence of the transfer; and
(B) for any other liabilities or costs, including reasonable costs and attorney’s fees, arising from compliance by such parties with the order of the court or arising as a consequence of the transferee’s failure to comply with this subchapter;
(3) Neither the annuity issuer nor the structured settlement obligor may be required to divide any periodic payment between the payee and any transferee or assignee or between two or more transferees or assignees; and (4) Any further transfer of structured settlement payment rights by the payee may be made only after compliance with all of the requirements of this subchapter.

No. 168 Page 10 of 16
VT LEG 281044.1
§ 2480ff. PROCEDURE FOR APPROVAL OF TRANSFERS
(a) An application under this subchapter for approval of a transfer of structured settlement payment rights shall be made by the transferee and may be brought in the superior court, civil division, of the county in which the payee resides or in which the structured settlement obligor or the annuity issuer maintains its principal place of business or in any court that approved the structured settlement agreement.
(b) Not less than 20 days prior to the scheduled hearing on any application for approval of a transfer of structured settlement payment rights under section 2480dd of this title, the transferee shall file with the court and serve on all interested parties a notice of the proposed transfer and the application for its authorization, including with such notice:
(1) a copy of any court order approving the settlement;
(2) a written description of the underlying basis for the settlement;
(3) a copy of the transferee’s application;
(4) a copy of the transfer agreement;
(5) a copy of the disclosure statement required under section 2481n of this title;
(6) a listing of each of the payee’s dependents, together with each dependent’s age;

No. 168 Page 11 of 16
VT LEG 281044.1
(7) a statement setting forth whether, to the best of the transferee’s knowledge after making a reasonable inquiry to the payee, the structured settlement obligor, and the annuity issuer, there have been any previous transfers or applications for transfer of any structured settlement payment rights of the payee and giving details of all such transfers or applications for transfer;
(8) if available to the transferee after making a good faith request of the payee, the structured settlement obligor and the annuity issuer, the following documents, which shall be filed under seal:
(A) a copy of the annuity contract;
(B) a copy of any qualified assignment agreement;
(C) a copy of the underlying structured settlement agreement;
(9) either a certification from an independent professional advisor establishing that the advisor has given advice to the payee on the financial advisability of the transfer and the other financial options available to the payee or a written request that the court determine that such advice is unnecessary pursuant to subdivision 2480dd(a)(2) of this title; and (10) notification of the time and place of the hearing and notification of the manner in which and the time by which written responses to the application must be filed, which shall be not less than 15 days after service of the transferee’s notice, in order to be considered by the court.

No. 168 Page 12 of 16
VT LEG 281044.1
(c) The transferee shall file a copy of the application with the attorney general’s office and a copy of the application and the payee’s Social Security number with the office of child support, the department of taxes, and the department of financial regulation. The offices and departments receiving
copies pursuant to this section shall permit the copies to be filed electronically. (d) The payee shall attend the hearing unless attendance is excused for good cause.
§ 2480gg. GENERAL PROVISIONS; CONSTRUCTION
(a) The provisions of this subchapter may not be waived by any payee. (b) Any transfer agreement entered into on or after the effective date of this subchapter by a payee who resides in this state shall provide that disputes under such transfer agreement, including any claim that the payee has breached the agreement, shall be determined in and under the laws of this state. No such transfer agreement shall authorize the transferee or any other party to confess judgment or consent to entry of judgment against the payee.
(c) No transfer of structured settlement payment rights shall extend to any payments that are life-contingent unless, prior to the date on which the payee signs the transfer agreement, the transferee has established and has agreed to maintain procedures reasonably satisfactory to the annuity issuer and the structured settlement obligor for:
(1) periodically confirming the payee’s survival; and
No. 168 Page 13 of 16

VT LEG 281044.1
(2) giving the annuity issuer and the structured settlement obligor prompt written notice in the event of the payee’s death.
(d) No payee who proposes to make a transfer of structured settlement payment rights shall incur any penalty, forfeit any application fee or other payment, or otherwise incur any liability to the proposed transferee or any assignee based on any failure of such transfer to satisfy the conditions of this subchapter.
(e) Nothing contained in this subchapter shall be construed to authorize any transfer of structured settlement payment rights in contravention of any law or to imply that any transfer under a transfer agreement entered into prior to the effective date of this subchapter is valid or invalid.
(f) Compliance with the requirements set forth in section 2480cc of this title and fulfillment of the conditions set forth in section 2480dd of this title shall be solely the responsibility of the transferee in any transfer of structured settlement payment rights, and neither the structured settlement obligor nor the annuity issuer shall bear any responsibility for or any liability arising from noncompliance with such requirements or failure to fulfill such conditions.

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: Utah Code Ann. § 78-59-102 (UT S.B. 163)

Enacted 3/15/2002

Effective 5/6/2002

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

Section 1. Section 70A-9a-109 is amended to read:

70A-9a-109. Scope.

(1) Except as otherwise provided in Subsections (3) and (4), this chapter

applies to:

(a) a transaction, regardless of its form, that creates a security interest in

personal property or fixtures by contract;

(b) an agricultural lien;

(c) a sale of accounts, chattel paper, payment intangibles, or promissory notes;

(d) a consignment;

(e) a security interest arising under Section 70A-2-401 or 70A-2-505 or

Subsection 70A-2-711 (3) or 70A-2a-508 (5), as provided in Section 70A-9a-110;

and

(f) a security interest arising under Section 70A-4-210 or 70A-5-118.

(2) The application of this chapter to a security interest in a secured

obligation is not affected by the fact that the obligation is itself secured by

a transaction or interest to which this chapter does not apply.

(3) This chapter does not apply to the extent that:

(a) a statute, regulation, or treaty of the United States preempts this chapter;

(b) another statute of this state expressly governs the creation, perfection,

priority, or enforcement of a security interest created by this state or a

governmental unit of this state;

(c) a statute of another state, a foreign country, or a governmental unit of

another state or a foreign country, other than a statute generally applicable

to security interests, expressly governs creation, perfection, priority, or

enforcement of a security interest created by the state, country, or

governmental unit; or

(d) the rights of a transferee beneficiary or nominated person under a letter

of credit are independent and superior under Section 70A-5-114.

(4) This chapter does not apply to:

(a) a landlord's lien, other than an agricultural lien;

(b) a lien, other than an agricultural lien, given by statute or other rule of

law for services or materials, but Section 70A-9a-333 applies with respect to

priority of the lien;

(c) an assignment of a claim for wages, salary, or other compensation of an

employee;

(d) a sale of accounts, chattel paper, payment intangibles, or promissory notes

as part of a sale of the business out of which they arose;

(e) an assignment of accounts, chattel paper, payment intangibles, or

promissory notes which is for the purpose of collection only;

(f) an assignment of a right to payment under a contract to an assignee that is

also obligated to perform under the contract;

(g) an assignment of a single account, payment intangible, or promissory note

to an assignee in full or partial satisfaction of a preexisting indebtedness;

(h) a transfer of an interest in or an assignment of a claim under a policy of

insurance, other than an assignment by or to a health-care provider of a

health-care-insurance receivable and any subsequent assignment of the right to

payment, but Sections 70A-9a-315 and 70A-9a-322 apply with respect to proceeds

and priorities in proceeds;

(i) an assignment of a right represented by a judgment, other than a judgment

taken on a right to payment that was collateral;

(j) a right of recoupment or set-off, but:

(i) Section 70A-9a-340 applies with respect to the effectiveness of rights of

recoupment or set-off against deposit accounts; and

(ii) Section 70A-9a-404 applies with respect to defenses or claims of an

account debtor;

(k) the creation or transfer of an interest in or lien on real property,

including a lease or rents thereunder, except to the extent that provision is

made for:

(i) liens on real property in Sections 70A-9a-203 and 70A-9a-308;

(ii) fixtures in Section 70A-9a-334;

(iii) fixture filings in Sections 70A-9a-501, 70A-9a-502, 70A-9a-512,

70A-9a-516, and 70A-9a-519; and

(iv) security agreements covering personal and real property in Section

70A-9a-604;

(l) an assignment of a claim arising in tort, other than a commercial tort

claim, but Sections 70A-9a-315 and 70A-9a-322 apply with respect to proceeds

and priorities in proceeds; or

(m) an assignment of a deposit account in a consumer transaction, but Sections

70A-9a-315 and 70A-9a-322 apply with respect to proceeds and priorities in

proceeds . ;

(N) AN ASSIGNMENT OF A CLAIM OR RIGHT TO RECEIVE COMPENSATION FOR INJURIES OR

SICKNESS AS DESCRIBED IN 26 U. S. C. 104(A)(1) OR (2); OR

(O) AN ASSIGNMENT OF A CLAIM OR RIGHT TO RECEIVE BENEFITS UNDER A SPECIAL

NEEDS TRUST AS DESCRIBED IN 42 U. S. C. 1396P(D)(4).

(5) NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS SECTION, SUBSECTIONS

(4)(N) AND (O) SHALL ONLY BE EFFECTIVE TO SECURITY INTERESTS CREATED ON OR

AFTER MAY 6, 2002.

Section 2. Section 78-59-101 is enacted to read: CHAPTER 59. STRUCTURED

SETTLEMENT PROTECTION ACT

78-59-101. Title. THIS CHAPTER IS KNOWN AS THE "STRUCTURED SETTLEMENT

PROTECTION ACT."

Section 3. Section 78-59-102 is enacted to read:

78-59-102. Definitions. FOR PURPOSES OF THIS CHAPTER:

(1) "ANNUITY ISSUER" MEANS AN INSURER THAT HAS ISSUED A CONTRACT TO FUND

PERIODIC PAYMENTS UNDER A STRUCTURED SETTLEMENT.

(2) "DEPENDENTS" INCLUDE A PAYEE'S SPOUSE AND MINOR CHILDREN AND ALL OTHER

PERSONS FOR WHOM THE PAYEE IS LEGALLY OBLIGATED TO PROVIDE SUPPORT, INCLUDING

ALIMONY.

(3) "DISCOUNTED PRESENT VALUE" MEANS THE PRESENT VALUE OF FUTURE PAYMENTS

DETERMINED BY DISCOUNTING THE PAYMENTS TO THE PRESENT USING THE MOST RECENTLY

PUBLISHED APPLICABLE FEDERAL RATE FOR DETERMINING THE PRESENT VALUE OF AN

ANNUITY, AS ISSUED BY THE UNITED STATES INTERNAL REVENUE SERVICE.

(4) "GROSS ADVANCE AMOUNT" MEANS THE SUM PAYABLE TO THE PAYEE OR FOR THE

PAYEE'S ACCOUNT AS CONSIDERATION FOR A TRANSFER OF STRUCTURED SETTLEMENT

PAYMENT RIGHTS BEFORE ANY REDUCTIONS FOR TRANSFER EXPENSES OR OTHER DEDUCTIONS

TO BE MADE FROM THE CONSIDERATION.

(5) "INDEPENDENT PROFESSIONAL ADVICE" MEANS ADVICE OF AN ATTORNEY, CERTIFIED

PUBLIC ACCOUNTANT, ACTUARY, OR OTHER LICENSED PROFESSIONAL ADVISER.

(6) "INTERESTED PARTIES" MEANS, WITH RESPECT TO ANY STRUCTURED SETTLEMENT, THE

PAYEE, ANY BENEFICIARY IRREVOCABLY DESIGNATED UNDER THE ANNUITY CONTRACT TO

RECEIVE PAYMENTS FOLLOWING THE PAYEE'S DEATH, THE ANNUITY ISSUER, THE

STRUCTURED SETTLEMENT OBLIGOR, AND ANY OTHER PARTY THAT HAS CONTINUING RIGHTS

OR OBLIGATIONS UNDER THE STRUCTURED SETTLEMENT.

(7) "NET ADVANCE AMOUNT" MEANS THE GROSS ADVANCE AMOUNT LESS THE AGGREGATE

AMOUNT OF THE ACTUAL AND ESTIMATED TRANSFER EXPENSES REQUIRED TO BE DISCLOSED

UNDER SUBSECTION 78-59-103 (5).

(8) "PAYEE" MEANS AN INDIVIDUAL WHO IS RECEIVING TAX FREE PAYMENTS UNDER A

STRUCTURED SETTLEMENT AND PROPOSES TO MAKE A TRANSFER OF PAYMENT RIGHTS UNDER

THE SETTLEMENT.

(9) "PERIODIC PAYMENTS" INCLUDES BOTH RECURRING PAYMENTS AND SCHEDULED FUTURE

LUMP SUM PAYMENTS.

(10) "QUALIFIED ASSIGNMENT AGREEMENT" MEANS AN AGREEMENT PROVIDING FOR A

QUALIFIED ASSIGNMENT WITHIN THE MEANING OF SECTION 130 OF THE UNITED STATES

INTERNAL REVENUE CODE.

(11) "RESPONSIBLE ADMINISTRATIVE AUTHORITY" MEANS, WITH RESPECT TO A

STRUCTURED SETTLEMENT, ANY GOVERNMENT AUTHORITY VESTED BY LAW WITH EXCLUSIVE

JURISDICTION OVER THE SETTLED CLAIM RESOLVED BY THE STRUCTURED SETTLEMENT.

(12) "SETTLED CLAIM" MEANS THE ORIGINAL TORT CLAIM OR WORKERS' COMPENSATION

CLAIM RESOLVED BY A STRUCTURED SETTLEMENT.

(13) "STRUCTURED SETTLEMENT" MEANS AN ARRANGEMENT FOR PERIODIC PAYMENT OF

DAMAGES FOR PERSONAL INJURIES OR SICKNESS ESTABLISHED BY SETTLEMENT OR JUDGMENT

IN RESOLUTION OF A TORT CLAIM OR FOR PERIODIC PAYMENTS IN SETTLEMENT OF A

WORKERS' COMPENSATION CLAIM.

(14) "STRUCTURED SETTLEMENT AGREEMENT" MEANS THE AGREEMENT, JUDGMENT,

STIPULATION, OR RELEASE EMBODYING THE TERMS OF A STRUCTURED SETTLEMENT.

(15) "STRUCTURED SETTLEMENT OBLIGOR" MEANS, WITH RESPECT TO ANY STRUCTURED

SETTLEMENT, THE PARTY THAT HAS THE CONTINUING OBLIGATION TO MAKE PERIODIC

PAYMENTS TO THE PAYEE UNDER A STRUCTURED SETTLEMENT AGREEMENT OR A QUALIFIED

ASSIGNMENT AGREEMENT.

(16) "STRUCTURED SETTLEMENT PAYMENT RIGHTS" MEANS RIGHTS TO RECEIVE PERIODIC

PAYMENTS UNDER A STRUCTURED SETTLEMENT, WHETHER FROM THE STRUCTURED SETTLEMENT

OBLIGOR OR THE ANNUITY ISSUER, WHERE:

(A) THE PAYEE IS DOMICILED IN, OR THE DOMICILE OR PRINCIPAL PLACE OF BUSINESS

OF THE STRUCTURED SETTLEMENT OBLIGOR OR THE ANNUITY ISSUER IS LOCATED IN THIS

STATE;

(B) THE STRUCTURED SETTLEMENT AGREEMENT WAS APPROVED BY A COURT IN THIS STATE;

OR

(C) THE STRUCTURED SETTLEMENT AGREEMENT IS EXPRESSLY GOVERNED BY THE LAWS OF

THIS STATE.

(17) "TERMS OF THE STRUCTURED SETTLEMENT" INCLUDE, WITH RESPECT TO ANY

STRUCTURED SETTLEMENT, THE TERMS OF THE STRUCTURED SETTLEMENT AGREEMENT, THE

ANNUITY CONTRACT, ANY QUALIFIED ASSIGNMENT AGREEMENT AND ANY ORDER OR OTHER

APPROVAL OF ANY COURT OR OTHER GOVERNMENT AUTHORITY THAT AUTHORIZED OR APPROVED

THE STRUCTURED SETTLEMENT.

(18) " TRANSFER " MEANS ANY SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION, OR OTHER

ALIENATION OR ENCUMBRANCE OF STRUCTURED SETTLEMENT PAYMENT RIGHTS MADE BY A

PAYEE FOR CONSIDERATION; PROVIDED THAT THE TERM " TRANSFER " DOES NOT INCLUDE

THE CREATION OR PERFECTION OF A SECURITY INTEREST IN STRUCTURED SETTLEMENT

PAYMENT RIGHTS UNDER A BLANKET SECURITY AGREEMENT ENTERED INTO WITH AN INSURED

DEPOSITORY INSTITUTION, IN THE ABSENCE OF ANY ACTION TO REDIRECT THE STRUCTURED

SETTLEMENT PAYMENTS TO THE INSURED DEPOSITORY INSTITUTION, OR AN AGENT OR

SUCCESSOR IN INTEREST THEREOF, OR OTHERWISE TO ENFORCE A BLANKET SECURITY

INTEREST AGAINST THE STRUCTURED SETTLEMENT PAYMENT RIGHTS.

(19) " TRANSFER AGREEMENT" MEANS THE AGREEMENT PROVIDING FOR A TRANSFER OF

STRUCTURED SETTLEMENT PAYMENT RIGHTS.

(20) " TRANSFER EXPENSES" MEANS ALL EXPENSES OF A TRANSFER THAT ARE REQUIRED

UNDER THE TRANSFER AGREEMENT TO BE PAID BY THE PAYEE OR DEDUCTED FROM THE GROSS

ADVANCE AMOUNT, INCLUDING, WITHOUT LIMITATION, COURT FILING FEES, ATTORNEYS'

FEES, ESCROW FEES, LIEN RECORDATION FEES, JUDGMENT AND LIEN SEARCH FEES,

FINDERS' FEES, COMMISSIONS, AND OTHER PAYMENTS TO A BROKER OR OTHER

INTERMEDIARY. "TRANSFER EXPENSES" DO NOT INCLUDE PREEXISTING OBLIGATIONS OF THE

PAYEE PAYABLE FOR THE PAYEE'S ACCOUNT FROM THE PROCEEDS OF A TRANSFER.

(21) "TRANSFEREE" MEANS A PARTY ACQUIRING OR PROPOSING TO ACQUIRE STRUCTURED

SETTLEMENT PAYMENT RIGHTS THROUGH A TRANSFER.

Section 4. Section 78-59-103 is enacted to read:

78-59-103. Required disclosures to payee. NOT LESS THAN THREE DAYS PRIOR TO

THE DATE ON WHICH A PAYEE SIGNS A TRANSFER AGREEMENT, THE TRANSFEREE SHALL

PROVIDE TO THE PAYEE A SEPARATE DISCLOSURE STATEMENT, IN BOLD TYPE NO SMALLER

THAN 14 POINT, SETTING FORTH:

(1) THE AMOUNTS AND DUE DATES OF THE STRUCTURED SETTLEMENT PAYMENTS TO BE

TRANSFERRED;

(2) THE AGGREGATE AMOUNT OF THE PAYMENTS;

(3) THE DISCOUNTED PRESENT VALUE OF THE PAYMENTS TO BE TRANSFERRED, WHICH

SHALL BE IDENTIFIED AS THE "CALCULATION OF CURRENT VALUE OF THE TRANSFERRED

STRUCTURED SETTLEMENT PAYMENTS UNDER FEDERAL STANDARDS FOR VALUING ANNUITIES," AND THE AMOUNT OF THE APPLICABLE FEDERAL RATE USED IN CALCULATING THE

DISCOUNTED PRESENT VALUE;

(4) THE GROSS ADVANCE AMOUNT;

(5) AN ITEMIZED LISTING OF ALL APPLICABLE TRANSFER EXPENSES, OTHER THAN

ATTORNEYS' FEES AND RELATED DISBURSEMENTS PAYABLE IN CONNECTION WITH THE

TRANSFEREE'S APPLICATION FOR APPROVAL OF THE TRANSFER, AND THE TRANSFEREE'S

BEST ESTIMATE OF THE AMOUNT OF ANY OF THE FEES AND DISBURSEMENTS;

(6) THE NET ADVANCE AMOUNT;

(7) THE AMOUNT OF ANY PENALTIES OR LIQUIDATED DAMAGES PAYABLE BY THE PAYEE IN

THE EVENT OF ANY BREACH OF THE TRANSFER AGREEMENT BY THE PAYEE; AND

(8) A STATEMENT THAT THE PAYEE HAS THE RIGHT TO CANCEL THE TRANSFER AGREEMENT,

WITHOUT PENALTY OR FURTHER OBLIGATION, NOT LATER THAN THE THIRD BUSINESS DAY

AFTER THE DATE THE AGREEMENT IS SIGNED BY THE PAYEE.

Section 5. Section 78-59-104 is enacted to read:

78-59-104. Approval of transfers of structured settlement payment rights.

DIRECT OR INDIRECT TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS MAY NOT BE

EFFECTIVE AND A STRUCTURED SETTLEMENT OBLIGOR OR ANNUITY ISSUER MAY NOT BE

REQUIRED TO MAKE ANY PAYMENT DIRECTLY OR INDIRECTLY TO ANY TRANSFEREE OF

STRUCTURED SETTLEMENT PAYMENT RIGHTS UNLESS THE TRANSFER HAS BEEN APPROVED IN

ADVANCE IN A FINAL COURT ORDER BASED ON EXPRESS FINDINGS BY THE COURT THAT:

(1) THE TRANSFER IS IN THE BEST INTEREST OF THE PAYEE, TAKING INTO ACCOUNT THE

WELFARE AND SUPPORT OF THE PAYEE'S DEPENDENTS;

(2) THE PAYEE HAS BEEN ADVISED IN WRITING BY THE TRANSFEREE TO SEEK

INDEPENDENT PROFESSIONAL ADVICE REGARDING THE TRANSFER AND HAS EITHER RECEIVED

SUCH ADVICE OR KNOWINGLY WAIVED SUCH ADVICE IN WRITING; AND

(3) THE TRANSFER DOES NOT CONTRAVENE ANY APPLICABLE STATUTE OR THE ORDER OF

ANY COURT OR OTHER GOVERNMENT AUTHORITY.

Section 6. Section 78-59-105 is enacted to read:

78-59-105. Effects of transfer of structured settlement payment rights.

FOLLOWING A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS UNDER THIS

CHAPTER:

(1) THE STRUCTURED SETTLEMENT OBLIGOR AND THE ANNUITY ISSUER SHALL, AS TO ALL

PARTIES EXCEPT THE TRANSFEREE, BE DISCHARGED AND RELEASED FROM ANY AND ALL

LIABILITY FOR THE TRANSFERRED PAYMENTS.

(2) THE TRANSFEREE SHALL BE LIABLE TO THE STRUCTURED SETTLEMENT OBLIGOR AND

THE ANNUITY ISSUER:

(A) IF THE TRANSFER CONTRAVENES THE TERMS OF THE STRUCTURED SETTLEMENT, FOR

ANY TAXES INCURRED BY THE PARTIES AS A CONSEQUENCE OF THE TRANSFER; AND

 

 

(B) FOR ANY OTHER LIABILITIES OR COSTS, INCLUDING REASONABLE COSTS AND

ATTORNEYS' FEES, ARISING FROM COMPLIANCE BY THE PARTIES WITH THE ORDER OF THE

COURT OR ARISING AS A CONSEQUENCE OF THE TRANSFEREE'S FAILURE TO COMPLY WITH

THIS CHAPTER.

(3) NEITHER THE ANNUITY ISSUER NOR THE STRUCTURED SETTLEMENT OBLIGOR MAY BE

REQUIRED TO DIVIDE ANY PERIODIC PAYMENT BETWEEN THE PAYEE AND ANY TRANSFEREE OR

ASSIGNEE OR BETWEEN TWO OR MORE TRANSFEREES OR ASSIGNEES.

(4) ANY FURTHER TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS BY THE PAYEE

MAY BE MADE ONLY AFTER COMPLIANCE WITH ALL OF THE REQUIREMENTS OF THIS CHAPTER.

Section 7. Section 78-59-106 is enacted to read:

78-59-106. Procedure for approval of transfers.

(1) AN APPLICATION UNDER THIS CHAPTER FOR APPROVAL OF A TRANSFER OF

STRUCTURED SETTLEMENT PAYMENT RIGHTS SHALL BE MADE BY THE TRANSFEREE AND MAY BE BROUGHT IN THE COUNTY IN WHICH THE PAYEE RESIDES, IN THE COUNTY IN WHICH THE

STRUCTURED SETTLEMENT OBLIGOR OR THE ANNUITY ISSUER MAINTAINS ITS PRINCIPAL

PLACE OF BUSINESS, OR IN ANY COURT WHICH APPROVED THE STRUCTURED SETTLEMENT

AGREEMENT.

(2) NOT LESS THAN 20 DAYS PRIOR TO THE SCHEDULED HEARING ON ANY APPLICATION

FOR APPROVAL OF A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS UNDER

SECTION 78-59-104, THE TRANSFEREE SHALL FILE WITH THE COURT AND SERVE ON ALL

INTERESTED PARTIES A NOTICE OF THE PROPOSED TRANSFER AND THE APPLICATION FOR

ITS AUTHORIZATION, INCLUDING WITH THE NOTICE:

(A) A COPY OF THE TRANSFEREE'S APPLICATION;

(B) A COPY OF THE TRANSFER AGREEMENT;

(C) A COPY OF THE DISCLOSURE STATEMENT REQUIRED UNDER SECTION 78-59-103;

(D) A LISTING OF EACH OF THE PAYEE'S DEPENDENTS, TOGETHER WITH EACH

DEPENDENT'S AGE;

(E) NOTIFICATION THAT ANY INTERESTED PARTY IS ENTITLED TO SUPPORT, OPPOSE, OR

OTHERWISE RESPOND TO THE TRANSFEREE'S APPLICATION, EITHER IN PERSON OR BY

COUNSEL, BY SUBMITTING WRITTEN COMMENTS TO THE COURT OR RESPONSIBLE

ADMINISTRATIVE AUTHORITY OR BY PARTICIPATING IN THE HEARING; AND

(F) NOTIFICATION OF THE TIME AND PLACE OF THE HEARING AND NOTIFICATION OF THE

MANNER IN WHICH AND THE TIME BY WHICH WRITTEN RESPONSES TO THE APPLICATION MUST

BE FILED, WHICH SHALL BE NOT LESS THAN 15 DAYS AFTER SERVICE OF THE

TRANSFEREE'S NOTICE, IN ORDER TO BE CONSIDERED BY THE COURT OR RESPONSIBLE

ADMINISTRATIVE AUTHORITY.

 

 

 

 

 

Section 8. Section 78-59-107 is enacted to read: 78-59-107. General provisions

-- Construction.

(1) THE PROVISIONS OF THIS CHAPTER MAY NOT BE WAIVED BY ANY PAYEE.

(2) ANY TRANSFER AGREEMENT ENTERED INTO ON OR AFTER MAY 6, 2002 BY A PAYEE WHO

RESIDES IN THIS STATE SHALL PROVIDE THAT DISPUTES UNDER THE TRANSFER AGREEMENT,

INCLUDING ANY CLAIM THAT THE PAYEE HAS BREACHED THE AGREEMENT, SHALL BE

DETERMINED IN AND UNDER THE LAWS OF THIS STATE. A TRANSFER AGREEMENT MAY NOT

AUTHORIZE THE TRANSFEREE OR ANY OTHER PARTY TO CONFESS JUDGMENT OR CONSENT TO

ENTRY OF JUDGMENT AGAINST THE PAYEE.

(3) THE TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS MAY NOT EXTEND TO ANY

PAYMENTS THAT ARE LIFE-CONTINGENT UNLESS, PRIOR TO THE DATE ON WHICH THE PAYEE

SIGNS THE TRANSFER AGREEMENT, THE TRANSFEREE HAS ESTABLISHED AND HAS AGREED TO

MAINTAIN PROCEDURES REASONABLY SATISFACTORY TO THE ANNUITY ISSUER AND THE

STRUCTURED SETTLEMENT OBLIGOR FOR:

(A) PERIODICALLY CONFIRMING THE PAYEE'S SURVIVAL; AND

(B) GIVING THE ANNUITY ISSUER AND THE STRUCTURED SETTLEMENT OBLIGOR PROMPT

WRITTEN NOTICE IN THE EVENT OF THE PAYEE'S DEATH.

(4) A PAYEE WHO PROPOSES TO MAKE A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT

RIGHTS MAY NOT INCUR ANY PENALTY, FORFEIT ANY APPLICATION FEE OR OTHER PAYMENT,

OR OTHERWISE INCUR ANY LIABILITY TO THE PROPOSED TRANSFEREE OR ANY ASSIGNEE

BASED ON ANY FAILURE OF THE TRANSFER TO SATISFY THE REQUIREMENTS OF THIS

CHAPTER.

(5) NOTHING CONTAINED IN THIS CHAPTER SHALL BE CONSTRUED TO AUTHORIZE ANY

TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS IN CONTRAVENTION OF ANY LAW OR

TO IMPLY THAT ANY TRANSFER UNDER A TRANSFER AGREEMENT ENTERED INTO PRIOR TO MAY

6, 2002 IS VALID OR INVALID.

(6) COMPLIANCE WITH THE REQUIREMENTS SET FORTH IN SECTION 78-59-103 AND

FULFILLMENT OF THE CONDITIONS SET FORTH IN SECTION 78-59-104 SHALL BE SOLELY

THE RESPONSIBILITY OF THE TRANSFEREE IN ANY TRANSFER OF STRUCTURED SETTLEMENT

PAYMENT RIGHTS, AND NEITHER THE STRUCTURED SETTLEMENT OBLIGOR NOR THE ANNUITY

ISSUER SHALL BEAR ANY RESPONSIBILITY FOR, OR ANY LIABILITY ARISING FROM,

NONCOMPLIANCE WITH THE REQUIREMENTS OR FAILURE TO FULFILL THE CONDITIONS.

Section 9. Section 78-59-108 is enacted to read:

78-59-108. Effective date. THIS ACT SHALL APPLY TO ANY TRANSFER OF

STRUCTURED SETTLEMENT PAYMENT RIGHTS UNDER A TRANSFER AGREEMENT ENTERED INTO ON OR AFTER MAY 6, 2002; PROVIDED, HOWEVER, THAT NOTHING CONTAINED IN THIS CHAPTER

SHALL IMPLY THAT ANY TRANSFER UNDER A TRANSFER AGREEMENT REACHED PRIOR TO THAT

DATE IS EITHER EFFECTIVE OR INEFFECTIVE.

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: Tex. Civ. Prac. & Rem. Code § 141.002 (TX H.B. 1666)

Enacted 6/20/2003

Effective 9/1/2003

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

SECTION 1. Title 6, Civil Practice and Remedies Code, is 1-6 amended by adding Chapter 141 to read as follows: CHAPTER 141. STRUCTURED SETTLEMENT PROTECTION ACT Sec. 141.001. SHORT TITLE. This chapter may be cited as the 1-9 Structured Settlement Protection Act.

 

Sec. 141.002. DEFINITIONS. In this chapter:

  1. "Annuity issuer" means an insurer that has issued a contract to fund periodic payments under a structured settlement.
  2. "Court" means:

  1. the court of original jurisdiction that authorized or approved a structured settlement; or
  2. if the court that authorized or approved the structured settlement no longer has jurisdiction to approve a transfer of payment rights under the structured settlement under this chapter, a statutory county court or a district court located in the county in which the payee resides.

(3) "Dependents" includes a payee's spouse, minor children, and all other persons for whom the payee is legally obligated to provide support, including alimony.

(4) "Discounted present value" means the present value of future payments determined by discounting the payments to the present using the most recently published Applicable Federal Rate for determining the present value of an annuity, as issued by the United States Internal Revenue Service.

(5) "Gross advance amount" means the sum payable to the payee or for the payee's account as consideration for a transfer of structured settlement payment rights before any reductions for transfer expenses or other deductions to be made from the consideration.

(6) "Independent professional advice" means advice of an attorney, certified public accountant, actuary, or other licensed professional adviser.

(7) "Interested party" means, with respect to any structured settlement: (A) the payee; (B) any beneficiary irrevocably designated under the annuity contract to receive payments following the payee's death; (C) the annuity issuer; (D) the structured settlement obligor; and (E) any other party that has continuing rights or obligations under the structured settlement. 2-22

(8) "Net advance amount" means the gross advance 2-23 amount less the aggregate amount of the actual and estimated 2-24 transfer expenses required to be disclosed under Section 2-25 141.003(5). 2-26

(9) "Payee" means an individual who is receiving 3-1 tax-free payments under a structured settlement and proposes to 3-2 transfer payment rights under the structured settlement. 3-3

(10) "Periodic payments" includes both recurring 3-4 payments and scheduled future lump-sum payments. 3-5

(11) "Qualified assignment agreement" means an 3-6 agreement providing for a qualified assignment within the meaning 3-7 of Section 130, Internal Revenue Code of 1986 (26 U.S.C. Section 3-8 130), as amended. 3-9

(12) "Settled claim" means the original tort claim or 3-10 workers' compensation claim resolved by a structured settlement. 3-11

(13) "Structured settlement" means an arrangement for 3-12 periodic payment of damages for personal injuries or sickness 3-13 established by settlement or judgment in resolution of a tort claim 3-14 or for periodic payments in settlement of a workers' compensation 3-15 claim. 3-16

(14) "Structured settlement agreement" means the 3-17 agreement, judgment, stipulation, or release embodying the terms of 3-18 a structured settlement. 3-19

(15) "Structured settlement obligor" means, with 3-20 respect to any structured settlement, the party that has the 3-21 continuing obligation to make periodic payments to the payee under 3-22 a structured settlement agreement or a qualified assignment 3-23 agreement. 3-24

(16) "Structured settlement payment rights" means 3-25 rights to receive periodic payments under a structured settlement, 3-26 whether from the structured settlement obligor or the annuity 4-1 issuer, if: 4-2 (A) the payee is domiciled in or the domicile or 4-3 principal place of business of the structured settlement obligor or 4-4 the annuity issuer is located in this state; 4-5 (B) the structured settlement agreement was 4-6 authorized or approved by a court located in this state; or 4-7 (C) the structured settlement agreement is 4-8 expressly governed by the laws of this state. 4-9

(17) "Terms of the structured settlement" include, 4-10 with respect to any structured settlement, the terms of the 4-11 structured settlement agreement, the annuity contract, any 4-12 qualified assignment agreement, and any order or other approval of 4-13 the court. 4-14

(18) "Transfer" means any sale, assignment, pledge, 4-15 hypothecation, or other alienation or encumbrance of structured 4-16 settlement payment rights made by a payee for consideration, except 4-17 that the term does not include the creation or perfection of a 4-18 security interest in structured settlement payment rights under a 4-19 blanket security agreement entered into with an insured depository 4-20 institution, in the absence of any action to redirect the 4-21 structured settlement payments to the insured depository 4-22 institution, or its agent or successor in interest, or to enforce 4-23 the blanket security interest against the structured settlement 4-24 payment rights. 4-25 (19) "Transfer agreement" means the agreement 4-26 providing for a transfer of structured settlement payment rights. 5-1

(20) "Transfer expenses" means all the expenses of a 5-2 transfer that are required under the transfer agreement to be paid 5-3 by the payee or deducted from the gross advance amount, including 5-4 court filing fees, attorney's fees, escrow fees, lien recording 5-5 fees, judgment and lien search fees, finders' fees, commissions, 5-6 and other payments to a broker or other intermediary, except that 5-7 the term does not include preexisting obligations of the payee 5-8 payable for the payee's account from the proceeds of a transfer. 5-9

(21) "Transferee" means a party acquiring or proposing 5-10 to acquire structured settlement payment rights through a transfer. 5-11

Sec. 141.003. REQUIRED DISCLOSURES TO PAYEE. At least three 5-12 days before the date on which the payee signs a transfer agreement, 5-13 the transferee shall provide to the payee a separate disclosure 5-14 statement, in bold type at least 14 points in size, that states: 5-15

 

    1. the amounts and due dates of the structured 5-16 settlement payments to be transferred; 5-17

 

    1. the aggregate amount of the payments; 5-18

 

  1. the discounted present value of the payments to be 5-19 transferred, which shall be identified as the "calculation of 5-20 current value of the transferred structured settlement payments 5-21 under federal standards for valuing annuities," and the amount of 5-22 the Applicable Federal Rate used in calculating the discounted 5-23 present value; 5-24
  2. the gross advance amount; 5-25
  3. an itemized listing of all applicable transfer 5-26 expenses, other than attorney's fees and related disbursements 6-1 payable in connection with the transferee's application for 6-2 approval of the transfer, and the transferee's best estimate of the 6-3 amount of those expenses; 6-4
  4. the net advance amount; 6-5 (7) the amount of any penalties or liquidated damages 6-6 payable by the payee in the event of any breach of the transfer 6-7 agreement by the payee; and 6-8 (8) a statement that the payee has the right to cancel 6-9 the transfer agreement, without penalty or further obligation, not 6-10 later than the third business day after the date the agreement is 6-11 signed by the payee.

 

 

6-12 Sec. 141.004. APPROVAL OF TRANSFERS OF STRUCTURED SETTLEMENT 6-13 PAYMENT RIGHTS. No direct or indirect transfer of structured 6-14 settlement payment rights shall be effective and no structured 6-15 settlement obligor or annuity issuer shall be required to make any 6-16 payment directly or indirectly to any transferee of structured 6-17 settlement payment rights unless the transfer has been approved in 6-18 advance in a final court order based on express findings by the 6-19 court that: 6-20

  1. the transfer is in the best interest of the payee, 6-21 taking into account the welfare and support of the payee's 6-22 dependents; 6-23
  2. the payee has been advised in writing by the 6-24 transferee to seek independent professional advice regarding the 6-25 transfer and has either received the advice or knowingly waived the 6-26 advice in writing; and 7-1
  3. the transfer does not contravene any applicable 7-2 statute or an order of any court or other governmental authority.

7-3 Sec. 141.005. EFFECTS OF TRANSFER OF STRUCTURED SETTLEMENT 7-4 PAYMENT RIGHTS. Following a transfer of structured settlement 7-5 payment rights under this chapter: 7-6

    1. the structured settlement obligor and the annuity 7-7 issuer shall, as to all parties except the transferee, be 7-8 discharged and released from any and all liability for the 7-9 transferred payments; 7-10

 

    1. the transferee shall be liable to the structured 7-11 settlement obligor and the annuity issuer: 7-12

 

  1. if the transfer contravenes the terms of the 7-13 structured settlement, for any taxes incurred by the parties as a 7-14 consequence of the transfer; and 7-15
  2. for any other liabilities or costs, 7-16 including reasonable costs and attorney's fees, arising from 7-17 compliance by the parties with the order of the court or arising as 7-18 a consequence of the transferee's failure to comply with this 7-19 chapter; 7-20

 

 

    1. the transferee shall be liable to the payee: 7-21

 

  1. if the transfer contravenes the terms of the 7-22 structured settlement, for any taxes incurred by the payee as a 7-23 consequence of the transfer; and 7-24
  2. for any other liabilities or costs, 7-25 including reasonable costs and attorney's fees, arising as a 7-26 consequence of the transferee's failure to comply with this 8-1 chapter; 8-2 (4) neither the structured settlement obligor nor the 8-3 annuity issuer may be required to divide any periodic payment 8-4 between the payee and any transferee or assignee or between two or 8-5 more transferees or assignees; and 8-6 (5) any further transfer of structured settlement 8-7 payment rights by the payee may be made only after compliance with 8-8 all of the requirements of this chapter. 8-9

 

Sec. 141.006. PROCEDURE FOR APPROVAL OF TRANSFERS.

  1. An 8-10 application under this chapter for approval of a transfer of 8-11 structured settlement payment rights shall be made by the 8-12 transferee and shall be brought in the court. 8-13
  2. At least 20 days before the date of the scheduled 8-14 hearing on any application for approval of a transfer of structured 8-15 settlement payment rights under Section 141.004, the transferee 8-16 shall file with the court and serve on all interested parties a 8-17 notice of the proposed transfer and the application for 8-18 authorization, including with the notice: 8-19
  1. a copy of the transferee's application; 8-20
  2. a copy of the transfer agreement; 8-21
  3. a copy of the disclosure statement required under 8-22 Section 141.003; 8-23
  4. a listing of each of the payee's dependents, 8-24 together with each dependent's age; 8-25
  5. notice that any interested party is entitled to 8-26 support, oppose, or otherwise respond to the transferee's 9-1 application, either in person or by counsel, by submitting written 9-2 comments to the court or by participating in the hearing; and 9-3
  6. notice of the time and place of the hearing and 9-4 notification of the manner in which and the time by which written 9-5 responses to the application must be filed to be considered by the 9-6 court. 9-7
  1. Written responses to the application under Subsection 9-8 (b)(6) must be filed on or after the 15th day after the date the 9-9 transferee's notice is served. 9-10

Sec. 141.007. GENERAL PROVISIONS; CONSTRUCTION. (a) The 9-11 provisions of this chapter may not be waived by any payee. 9-12 (b) Any transfer agreement entered into by a payee who 9-13 resides in this state must provide that disputes under the transfer 9-14 agreement, including any claim that the payee has breached the 9-15 agreement, shall be determined in and under the laws of this state. 9-16 The transfer agreement may not authorize the transferee or any 9-17 other party to confess judgment or consent to entry of judgment 9-18 against the payee. 9-19 (c) Transfer of structured settlement payment rights may not 9-20 extend to any payments that are life-contingent unless, prior to 9-21 the date on which the payee signs the transfer agreement, the 9-22 transferee has established and agreed to maintain procedures 9-23 reasonably satisfactory to the structured settlement obligor and 9-24 the annuity issuer for: 9-25 (1) periodically confirming the payee's survival; and 9-26 (2) giving the structured settlement obligor and the 10-1 annuity issuer prompt written notice in the event of the payee's 10-2 death. 10-3 (d) A payee who proposes to make a transfer of structured 10-4 settlement payment rights may not incur any penalty, forfeit any 10-5 application fee or other payment, or otherwise incur any liability 10-6 to the proposed transferee or any assignee based on any failure of 10-7 the transfer to satisfy the conditions of this chapter. 10-8 (e) Nothing contained in this chapter may be construed to 10-9 authorize any transfer of structured settlement payment rights in 10-10 contravention of any law or to imply that any transfer under a 10-11 transfer agreement entered into before the effective date of this 10-12 chapter is valid or invalid. 10-13 (f) Compliance with the requirements in Section 141.003 and 10-14 fulfillment of the conditions in Section 141.004 are solely the 10-15 responsibility of the transferee in any transfer of structured 10-16 settlement payment rights, and neither the structured settlement 10-17 obligor nor the annuity issuer bear any responsibility for, or any 10-18 liability arising from, noncompliance with the requirements or 10-19 failure to fulfill the conditions. 10-20 SECTION 2. Section 142.009, Property Code, is amended to 10-21 read as follows: 10-22

Sec. 142.009. ANNUITY CONTRACT REQUIREMENTS FOR STRUCTURED 10-23 SETTLEMENT. (a) [An annuity contract that funds a structured 10-24 settlement as provided by Section 142.008 must be provided by an 10-25 insurance company that is not:] 10-26 [(1) an affiliate, as that term is defined by Article 11-1 21.49-1, Insurance Code, of a liability insurance carrier involved 11-2 in the suit for which the structured settlement is created; or] 11-3 [(2) connected in any way to a person obligated to 11-4 fund the structured settlement.] 11-5 [(b)] An insurance company providing an annuity contract for 11-6 a structured settlement as provided by Section 142.008 must: 11-7 (1) be licensed to write annuity contracts in this 11-8 state; 11-9 (2) have a minimum of $1 million of capital and 11-10 surplus; and 11-11 (3) be approved by the court and comply with any 11-12 requirements imposed by the court to ensure funding to satisfy 11-13 periodic settlement payments. 11-14 (b) [(c)] In approving an insurance company under Subsection 11-15 (a)(3) [(b)(3)], the court may consider whether the company: 11-16 (1) holds an industry rating equivalent to at least 11-17 two of the following rating organizations: 11-18 (A) [(1)] A. M. Best Company: A++ or A+; 11-19 (B) [(2)] Duff & Phelps Credit Rating Company 11-20 Insurance Company Claims Paying Ability Rating: AA-, AA, AA+, or 11-21 AAA; 11-22 (C) [(3)] Moody's Investors Service Claims 11-23 Paying Ability Rating: Aa3, Aa2, Aa1, or aaa; or 11-24 (D) [(4)] Standard & Poor's Corporation Insurer 11-25 Claims-Paying Ability Rating: AA-, AA, AA+, or AAA; 11-26 (2) is an affiliate, as that term is defined by 12-1 Article 21.49-1, Insurance Code, of a liability insurance carrier 12-2 involved in the suit for which the structured settlement is 12-3 created; or 12-4 (3) is connected in any way to a person obligated to 12-5 fund the structured settlement. 12-6 SECTION 3. This Act takes effect September 1, 2001, and 12-7 applies only to a transfer of structured settlement payment rights 12-8 under a transfer agreement entered into on or after that date.

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: Tennessee Code § 47-18-2603 (SB 484)

Enacted May 23, 2000

Effective January 1, 2001

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

SECTION 1. Tennessee Code Annotated, Title 47, Chapter 18, is amended by adding
Sections 2-8 of this act as an appropriately numbered new part.

SECTION 2. This part shall be known and may be cited as the " Structured
Settlement Protection Act".

SECTION 3. As used in this part, unless the context otherwise requires:

(1) "Annuity insurer" means an insurer that has issued an insurance policy or
annuity contract used to fund periodic payments under a structured
settlement;

(2) "Applicable law" means state or federal statutes of the United States;

(3) "Dependents" include a payee's spouse and minor children and all other
family members and other persons for whom the payee is legally obligated to
provide support, including alimony;

(4) "Discounted present value" means the present value of future payments, as
determined by discounting such payments to the present using the most recently
published applicable federal rate for determining the present value of an
annuity, as issued by the United States Internal Revenue Service, and the
present value of the payments to be transferred by the payee using the actual
discount rate applied to the transfer, stated as an annual percentage rate;

(5) "Independent professional advice" means advice of an attorney, certified
public accountant, actuary or other licensed professional adviser;

(6) "Interested parties" means, with respect to any structured settlement, the
payee, the annuity issuer, the structured settlement obligor, and any other
party that has continuing rights or obligations under such structured
settlement;

(7) "Payee" means an individual who is receiving tax-free damage payments under
a structured settlement and proposes to make a transfer of payment rights
thereunder;

(8) "Qualified assignment agreement" means an agreement providing for a
qualified assignment within the meaning of Section 130 of the United States
Internal Revenue Code, United States Code Title 26, as amended from time to
time;

(9) "Responsible administrative authority" means, with respect to a
structured settlement, any government authority vested by law with exclusive
jurisdiction over the settled claim resolved by such structured settlement;

(10) "Settled claim" means the original tort claim;

(11) " Structured settlement " means an arrangement for periodic payment of
damages for personal injuries established by settlement or judgment in
resolution of a tort claim;

(12) " Structured settlement agreement" means the agreement, judgment,
stipulation, or release embodying the terms of a structured settlement,
including the rights of the payee to receive periodic payments;

(13) " Structured settlement obligor" means, with respect to any structured
settlement, the party that has the continuing periodic payment obligation to
the payee under a structured settlement agreement or a qualified assignment
agreement;

(14) " Structured settlement payment rights" means rights to receive periodic
payments (including lump sum payments) under a structured settlement, whether
from the settlement obligor or the annuity issuer where:

(A) the payee is domiciled in this state;

(B) the structured settlement agreement was approved by a court or responsible
administrative authority in this state; or

(C) the structured settlement agreement is governed by the laws of this state;

(15) "Transfer" means any sale, assignment, pledge, hypothecation, commutation,
advance or other form of alienation or encumbrance made by a payee for
consideration;

(16) "Terms of the structured settlement " include, with respect to any
structured settlement, the terms of the structured settlement agreement, the
annuity contract, any qualified assignment agreement and any order or approval
of any court or responsible administrative authority or other government
authority authorizing or approving such structured settlement; and

(17) "Transfer agreement" means the agreement providing for transfer of
structured settlement payment rights from a payee to a transferee.

SECTION 4. No direct or indirect transfer of structured settlement payment
rights shall be effective and no structured settlement obligor or annuity
issuer shall be required to make any payment directly or indirectly to any
transferee of structured settlement payment rights unless the transfer has been
authorized in advance in a final order of a court of competent jurisdiction or
a responsible administrative authority, and complies with all of the following:

(1) The transfer complies with the requirement of this part and will not
contravene other applicable law;

(2) Not less than ten (10) days prior to the date on which the payee executes
the transfer agreement, the transferee has provided to the payee a disclosure
statement in bold type, no smaller than fourteen (14) points, setting forth:

(A) the amounts and due dates of the structured settlement payments to be
transferred;

(B) the aggregate amount of such payments;

(C) the discounted present value of such payments, together with the discount
rate used in determining such discounted present value;

(D) the gross amount payable to the payee in exchange for such payments;

(E) an itemized listing of all brokers' commissions, service charges,
application fees, processing fees, closing costs, filing fees, administrative
fees, notary fees and other commissions, fees, costs, expenses and charges, and
a good faith estimate of all legal fees and court costs payable by the payee or
deductible from the gross amount otherwise payable to the payee;

(F) the net amount payable to the payee after deduction of all commissions,
fees, costs, expenses and charges described in subdivision (5) of this
subsection;

(G) the amount of any penalty and the aggregate amount of any liquidated
damages (inclusive of penalties) payable by the payee in the event of any
breach of the transfer agreement by the payee.

(3) The payee has established that the transfer is fair and reasonable and in
the best interest of the payee.

(4) The payee has been advised by the transferee, in writing, to seek
independent professional advice regarding the financial, legal and tax
implications of the transfer.

(5) The transferee has given written notice of the transferee's name, address
and taxpayer identification number to the annuity issuer and the structured
settlement obligor and has filed a copy of such notice with the court or
responsible administrative authority.

SECTION 5. (a) The circuit court shall have non-exclusive jurisdiction over any
application for authorization under Section 4 of this act of a transfer of
structured settlement payment rights.

(b) Not less than twenty (20) days prior to the scheduled hearing on any
application for authorization of a transfer of structured settlement payment
rights under Section 4 of this act, the transferee shall file with the court or
responsible administrative authority and serve on any other government
authority which previously approved the structured settlement, and on all
interested parties, a notice of the proposed transfer and the application for
its authorization, including in such notice:

(1) a copy of the transferee's application;

(2) a copy of the transfer agreement;

(3) a copy of the disclosure statement required under Section 4(b) of this act;

(4) notification that any interested party is entitled to support, oppose or
otherwise respond to the transferee's application, either in person or by
counsel, by submitting written comments to the court or responsible
administrative authority or by participating in the hearing; and

(5) notification of the time and place of the hearing and notification of the
manner in which and the time by which written responses to the application must
be filed (which shall be not less than fifteen (15) days after service of the
transferee's notice) in order to be considered by the court or responsible
administrative authority.

(c) In determining whether the transfer is in the payee's best interest under
Section 4 (3), the court should consider:

(i) the terms of the transfer;

(ii) whether the payee has other sources of income, other than the structured
settlement payment rights to be transferred;

(iii) the effect of the transfer, if any, on the payee's dependents and
whether the transfer would be likely to result in financial hardship for such
dependents; and

(iv) if a payee is currently required by a court order, judgment, or decree to
pay child support or alimony, the effect of the transfer on the payee's ability
to continue to pay such support or alimony.

(d) The structured settlement obligor and annuity issuer shall, as to all
parties except the transferee, be discharged and released from any and all
liability for the transferred payments;

(e) The transferee and any assignee shall be liable to the structured
settlement obligor and the annuity issuer for any and all taxes and other costs
and liabilities, other than costs incurred in opposing the transfer, incurred
as a result of complying with the court order approving the transfer.

(f) Neither the annuity issuer nor the structured settlement obligor may be
required to divide any structured settlement payment between the payee and any
transferee or assignee or between two or more transferees or assignees.

(g) If any party acting in bad faith withholds consent to the transfer, the
court may, in its discretion, award the prevailing party reasonable attorney
fees and costs.

SECTION 6. (a) The provisions of this part may not be waived.

(b) No payee who proposes to make a transfer of structured settlement payment
rights shall incur any penalty, forfeit any application fee or other payment,
or otherwise incur any liability to the proposed transferee based on any
failure of such transfer to satisfy the conditions of Section 4 of this act.

SECTION 7. Nothing contained in this part shall be construed to authorize any
transfer of structured settlement payment rights in contravention of applicable
law or to give effect to any transfer of structured settlement payment rights
that is invalid under applicable law.

SECTION 8. This part shall apply to any transfer of structured settlement
payment rights under a transfer agreement entered into on or after the
thirty-first (31st) day after the effective date of this part; provided,
however, that nothing contained herein shall imply that any transfer under a
transfer agreement reached prior to such date is ineffective.

SECTION 9. This act shall take effect upon becoming a law, the public welfare
requiring it.

Sponsor:
Haynes

 

In 2000, the National Structured Settlements Trade Association and National Association of Settlement Purchasers agreed on language that was designed to protect the consumer when selling their structured settlement payments for cash. This language is referred to as the “Model State Structured Settlement Protection Act” and 46 states now have adopted laws that are closely aligned with the model act.

MODEL STATE STRUCTURED SETTLEMENT PROTECTION ACT

SECTION 1. TITLE. This Act shall be known and referred to as the “Structured Settlement Protection Act."

SECTION 2. DEFINITIONS. For purposes of this Act—

(a) "annuity issuer" means an insurer that has issued a contract to fund periodic payments under a structured settlement;

(b) "dependents” include a payee\’s spouse and minor children and all other persons for whom the payee is legally obligated to provide support, including alimony;

(c) "discounted present value" means the present value of future payments determined by discounting such payments to the present using the most recently published Applicable Federal Rate for determining the present value of an annuity, as issued by the United States Internal Revenue Service;

(d) "gross advance amount" means the sum payable to the payee or for the payee's account as consideration for a transfer of structured settlement payment rights before any reductions for transfer expenses or other deductions to be made from such consideration;

(e) "independent professional advice” means advice of an attorney, certified public accountant, actuary or other licensed professional adviser;

(f) "interested parties" means, with respect to any structured settlement, the payee, any beneficiary irrevocably designated under the annuity contract to receive payments following the payee’s death, the annuity issuer, the structured settlement obligor, and any other party that has continuing rights or obligations under such structured settlement;

(g) "net advance amount" means the gross advance amount less the aggregate amount of the actual and estimated transfer expenses required to be disclosed under Section 3(e) of this Act;

(h) "payee" means an individual who is receiving tax free payments under a structured settlement and proposes to make a transfer of payment rights thereunder;

(i) "periodic payments" includes both recurring payments and scheduled future lump sum payments;

(j) qualified assignment agreement" means an agreement providing for a qualified assignment within the meaning of section 130 of the United States Internal Revenue Code, United States Code Title 26, as amended from time to time;

(k) "responsible administrative authority" means, with respect to a structured settlement, any government authority vested by law with exclusive jurisdiction over the settled claim resolved by such structured settlement;

(l) "settled claim" means the original tort claim or workers\’ compensation claim resolved by a structured settlement;

(m) "structured settlement" means an arrangement for periodic payment of damages for personal injuries or sickness established by settlement or judgment in resolution of a tort claim or for periodic payments in settlement of a workers’ compensation claim;

(n) "structured settlement agreement" means the agreement, judgment, stipulation, or release embodying the terms of a structured settlement;

(o) "structured settlement obligor" means, with respect to any structured settlement, the party that has the continuing obligation to make periodic payments to the payee under a structured settlement agreement or a qualified assignment agreement;

(p) "structured settlement payment rights" means rights to receive periodic payments under a structured settlement, whether from the structured settlement obligor or the annuity issuer, where –

(i) the payee is domiciled in, or the domicile or principal place of business of the structured settlement obligor or the annuity issuer is located in, this State; or(ii) the structured settlement agreement was approved by a court or responsible administrative authority in this State; or

(iii) the structured settlement agreement is expressly governed by the laws of this State;

(q) "terms of the structured settlement" include, with respect to any structured settlement, the terms of the structured settlement agreement, the annuity contract, any qualified assignment agreement and any order or other approval of any court or responsible administrative authority or other government authority that authorized or approved such structured settlement;

(r) "transfer" means any sale, assignment, pledge, hypothecation or other alienation or encumbrance of structured settlement payment rights made by a payee for consideration; provided that the term “transfer” does not include thecreation or perfection of a security interest in structured settlement payment rights under a blanket security agreement entered into with an insured depository institution, in the absence of any action to redirect the structured settlement payments to such insured depository institution, or an agent or successor in interest thereof, or otherwise to enforce such blanket security interest against the structured settlement payment rights;

(s) "transfer agreement" means the agreement providing for a transfer of structured settlement payment rights.

(t) "transfer expenses" means all expenses of a transfer that are required under the transfer agreement to be paid by the payee or deducted from the gross advance amount, including, without limitation, court filing fees, attorneys fees, escrow fees, lien recordation fees, judgment and lien search fees, finders’ fees, commissions, and other payments to a broker or other intermediary; “transfer expenses” do not include preexisting obligations of the payee payable for the payee’s account from the proceeds of a transfer;

(u) "transferee" means a party acquiring or proposing to acquire structured settlement payment rights through a transfer;

SECTION 3. REQUIRED DISCLOSURES TO PAYEE. Not less than three (3) days prior to the date on which a payee signs a transfer agreement, the transferee shall provide to the payee a separate disclosure statement, in bold type no smaller than 14 points, setting forth —

(a) the amounts and due dates of the structured settlement payments to be transferred;

(b) the aggregate amount of such payments;

(c) the discounted present value of the payments to be transferred, which shall be identified as the "calculation of current value of the transferred structured settlement payments under federal standards for valuing annuities", and the amount of the Applicable Federal Rate used in calculating such discounted present value;

(d) the gross advance amount;

(e) an itemized listing of all applicable transfer expenses, other than attorneys’ fees and related disbursements payable in connection with the transferee’s application for approval of the transfer, and the transferee’s best estimate of the amount of any such fees and disbursements;

(f) the net advance amount;

(g) the amount of any penalties or liquidated damages payable by the payee in the event of any breach of the transfer agreement by the payee; and

(h) a statement that the payee has the right to cancel the transfer agreement, without penalty or further obligation, not later than the third business day after the date the agreement is signed by the payee.

SECTION 4. APPROVAL OF TRANSFERS OF STRUCTURED SETTLEMENT PAYMENT RIGHTS.

(a) No direct or indirect transfer of structured settlement payment rights shall be effective and no structured settlement obligor or annuity issuer shall be required to make any payment directly or indirectly to any transferee of structured settlement payment rights unless the transfer has been approved in advance in a final court order or order of a responsible administrative authority based on express findings by such court or responsible administrative authority that —

(i) the transfer is in the best interest of the payee, taking into account the welfare and support of the payee's dependents;(ii) the payee has been advised in writing by the transferee to seek independent professional advice regarding the transfer and has either received such advice or knowingly waived such advice in writing; and

(iii) the transfer does not contravene any applicable statute or the order of any court or other government authority;

SECTION 5. EFFECTS OF TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS. Following a transfer of structured settlementpayment rights under this Act:

(a) The structured settlement obligor and the annuity issuer shall, as to all parties except the transferee, be discharged and released from any and all liability for the transferred payments;

(b) The transferee shall be liable to the structured settlement obligor and the annuity issuer:

(i) if the transfer contravenes the terms of the structured settlement, for any taxes incurred by such parties as a consequence of the transfer; and(ii) for any other liabilities or costs, including reasonable costs and attorneys\’ fees, arising from compliance by such parties with the order of the court or responsible administrative authority or arising as a consequence of the transferee's failure to comply with this Act;

(c) Neither the annuity issuer nor the structured settlement obligor may be required to divide any periodic payment between the payee and any transferee or assignee or between two (or more) transferees or assignees; and

(d) Any further transfer of structured settlement payment rights by the payee may be made only after compliance with all of the requirements of this Act.

SECTION 6. PROCEDURE FOR APPROVAL OF TRANSFERS.

(a) An application under this Act for approval of a transfer of structured settlement payment rights shall be made by the transferee and may be

brought in the [county] in which the payee resides, in the [county] in which the structured settlement obligor or the annuity issuer maintains its principal place of business, or in any court or before any responsible administrative authority which approved the structured settlement agreement.

(b) Not less than twenty (20) days prior to the scheduled hearing on any application for approval of a transfer of structured settlement payment rights under Section 4 of this Act, the transferee shall file with the court or responsible administrative authority and serve on all interested parties a notice of the proposed transfer and the application for its authorization, including with such notice:

(i) a copy of the transferee’s application;(ii) a copy of the transfer agreement;

(iii) a copy of the disclosure statement required under Section 3 of this Act;

(iv) a listing of each of the payee's dependents, together with each dependent's age;

(v) notification that any interested party is entitled to support, oppose or otherwise respond to the transferee’s application, either in person or by counsel, by submitting written comments to the court or responsible administrative authority or by participating in the hearing; and

(vi) notification of the time and place of the hearing and notification of the manner in which and the time by which written responses to the application must be filed (which shall be not less than [fifteen (15)] days after service of the transferee’s notice) in order to be considered by the court or responsible administrative authority.

SECTION 7. GENERAL PROVISIONS; CONSTRUCTION.

(a) The provisions of this Act may not be waived by any payee.

(b) Any transfer agreement entered into on or after the effective date of this Act by a payee who resides in this state shall provide that disputes under such transfer agreement, including any claim that the payee has breached the agreement, shall be determined in and under the laws of this State. No such transfer agreement shall authorize the transferee or any other party to confess judgment or consent to entry of judgment against the payee.

(c) No transfer of structured settlement payment rights shall extend to any payments that are life-contingent unless, prior to the date on which the payee signs the transfer agreement, the transferee has established and has agreed to maintain procedures reasonably satisfactory to the annuity issuer and the structured settlement obligor for (i) periodically confirming the payee’s survival, and (ii) giving the annuity issuer and the structured settlement obligor prompt written notice in the event of the payee’s death.

(d) No payee who proposes to make a transfer of structured settlement payment rights shall incur any penalty, forfeit any application fee or other payment, or otherwise incur any liability to the proposed transferee or any assignee based on any failure of such transfer to satisfy the conditions of this Act.

(e) Nothing contained in this Act shall be construed to authorize any transfer of structured settlement payment rights in contravention of any law or to imply that any transfer under a transfer agreement entered into prior to the effective date of this Act is valid or invalid.

(f) Compliance with the requirements set forth in Section 3 of this Act and fulfillment of the conditions set forth in Section 4 of this Act shall be solely the responsibility of the transferee in any transfer of structured settlement payment rights, and neither the structured settlement obligor nor the annuity issuer shall bear any responsibility for, or any liability arising from, noncompliance with such requirements or failure to fulfill such conditions.

EFFECTIVE DATE. This Act shall apply to any transfer of structured settlement payment rights under a transfer agreement entered into on or after the [thirtieth (30th)] day after the date of enactment of this Act; provided, however, that nothing contained herein shall imply that any transfer under a transfer agreement reached prior to such date is either effective or ineffective.

Yes, you can trad structured settlement payments for upfront cash.

Statute and Bill #: S.C. Code Ann. § 15-50-10

Enacted 5/14/02

Effective 6/14/02

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

TITLE 15. CIVIL REMEDIES AND PROCEDURES

CHAPTER 50. STRUCTURED SETTLEMENT PROTECTION ACT

SECTION 15-50-10. Short title. [SC ST SEC 15-50-10]

This act may be cited as the "structured settlement Protection Act".

SECTION 15-50-20. Definitions. [SC ST SEC 15-50-20]

As used in this chapter:

(1) "Annuity issuer" means an insurer that has issued a contract to fund periodic payments under a structured settlement.

(2) "Dependents" include a payee's spouse and minor children and all other persons for whom the payee legally is obligated to provide support, including alimony.

(3) "Discounted present value" means the present value of future payments determined by discounting the payments to the present using the most recently published applicable federal rate for determining the present value of an annuity, as issued by the United States Internal Revenue Service.

(4) "Gross advance amount" means the sum payable to the payee or for the payee's account as consideration for a transfer of structured settlement payment rights before a reduction for transfer expenses or other deduction is made from the consideration.

(5) "Independent professional advice" means advice of an attorney, certified public accountant, actuary, or other licensed professional advisor.

(6) "Interested parties" means, with respect to a structured settlement, the payee, a beneficiary irrevocably designated under the annuity contract to receive payments following the payee's death, the annuity issuer, the structured settlement obligor, and another party that has continuing rights or obligations under the structured settlement.

(7) "Net advance amount" means the gross advance amount less the aggregate amount of the actual and estimated transfer expenses that must be disclosed pursuant to Section 15-50-30(5).

(8) "Payee" means an individual who is receiving tax-free payments under a structured settlement and who proposes to make a transfer of payment rights under the settlement.

(9) "Periodic payments" includes recurring payments and scheduled future lump-sum payments.

(10) "Qualified assignment agreement" means an agreement providing for a qualified assignment within the meaning of Section 130 of the United States Internal Revenue Code, United States Code Title 26.

(11) "Settled claim" means the original tort claim resolved by a structured settlement.

(12) "structured settlement" means an arrangement for periodic payment of damages for personal injuries or sickness established by settlement or judgment in resolution of a tort claim.

(13) "structured settlement agreement" means the agreement, judgment, stipulation, or release embodying the terms of a structured settlement.

(14) "structured settlement obligor" means, with respect to a structured settlement, the party that has the continuing obligation to make periodic payments to the payee under a structured settlement agreement or a qualified assignment agreement.

(15) "structured settlement payment rights" means rights to receive periodic payments under a structured settlement, whether from the structured settlement obligor or the annuity issuer, if the:

(a) payee is domiciled in, or the domicile or principal place of business of the structured settlement obligor or the annuity issuer is located in, this State; or

(b) structured settlement agreement was approved by a court in this State; or

(c) structured settlement agreement is governed expressly by the laws of this State.

(16) "Terms of the structured settlement" include the terms of the structured settlement agreement, the annuity contract, a qualified assignment agreement, and an order or other approval of a court.

(17) "Transfer" means the sale, assignment, pledge, hypothecation, or other alienation or encumbrance of structured settlement payment rights made by a payee for consideration; except that the term "transfer" does not include the creation or perfection of a security interest in structured settlement payment rights under a blanket security agreement entered into with an insured depository institution, in the absence of an action to redirect the structured settlement payments to the insured depository institution, or an agent or successor in interest of it, or otherwise to enforce the blanket security interest against the structured settlement payment rights.

(18) "Transfer agreement" means the agreement providing for a transfer of structured settlement payment rights.

(19) "Transfer expenses" means all expenses of a transfer that are required under the transfer agreement to be paid by the payee or deducted from the gross advance amount including, without limitation, court filing fees, attorneys' fees, escrow fees, lien recordation fees, judgment and lien search fees, finder's fees, commissions, and other payments to a broker or other intermediary. "Transfer expenses" do not include preexisting obligations of the payee payable for the payee's account from the proceeds of a transfer.

(20) "Transferee" means a party acquiring or proposing to acquire structured settlement payment rights through a transfer.

SECTION 15-50-30. Transfer agreements; disclosure statements. [SC ST SEC 15-50-30]

Not less than three days before the date on which a payee signs a transfer agreement, the transferee shall provide to the payee a separate disclosure statement, in bold type no smaller than fourteen points, including:

(1) amounts and due dates of the structured settlement payments being transferred;

(2) aggregate amount of the payments;

(3) discounted present value of the payments being transferred, which must be identified as the "calculation of current value of the transferred structured settlement payments under federal standards for valuing annuities", and the amount of the applicable federal rate used in calculating the discounted present value;

(4) gross advance amount;

(5) itemized listing of all applicable transfer expenses, other than attorney's fees and related disbursements payable in connection with the transferee's application for approval of the transfer, and the transferee's best estimate of the amount of the fees and disbursements;

(6) net advance amount;

(7) amount of penalties or liquidated damages payable by the payee if the payee breaches the transfer agreement; and

(8) a statement that the payee has the right to cancel the transfer agreement, without penalty or further obligation, not later than the third business day after the date the agreement is signed by the payee.

SECTION 15-50-40. Direct or indirect transfer of payment rights; approval by final court order. [SC ST SEC 15-50-40]

A direct or indirect transfer of structured settlement payment rights is not effective and a structured settlement obligor or annuity issuer is not required to make a payment directly or indirectly to a transferee of structured settlement payment rights unless the transfer has been approved in advance in a final court order based on express findings by the court that the:

(1) transfer is in the best interests of the payee, taking into account the welfare and support of the payee's dependents;

(2) payee has been advised in writing by the transferee to seek independent professional advice regarding the transfer or knowingly and in writing has waived receipt of that advice; and

(3) transfer does not contravene an applicable statute or the order of any court or other government authority.

SECTION 15-50-50. Rights and obligations of structured settlement obligor, annuity issuer and transferee. [SC ST SEC 15-50-50]

Following a transfer of structured settlement payment rights pursuant to this chapter:

(1) the structured settlement obligor and the annuity issuer, as to all parties except the transferee, are discharged and released from liability for the transferred payments; and

(2) the transferee is liable to the structured settlement obligor and the annuity issuer:

(a) for taxes incurred by the parties as a consequence of the transfer if the transfer contravenes the terms of the structured settlement; and

(b) for other liabilities or costs, including reasonable costs and attorney's fees, arising from compliance by the parties with the order of the court or arising as a consequence of the transferee's failure to comply with this chapter;

(3) neither the annuity issuer nor the structured settlement obligor is required to divide a periodic payment between the payee and any transferee or assignee or between two or more transferees or assignees; and

(4) any further transfer of structured settlement payment rights by the payee may be made only after compliance with all the requirements of this chapter.

SECTION 15-50-60. Application for approval of transfer; notice of hearing. [SC ST SEC 15-50-60]

(A) An application pursuant to this chapter for approval of a transfer of structured settlement payment rights may be made by the transferee and may be brought in a court of competent jurisdiction, including the probate court if the transferee is a minor or the original settlement was approved by the probate court, in the county in which the payee resides, in the county in which the structured settlement obligor or the annuity issuer maintains its principal place of business, or in any court which approved the structured settlement agreement.

(B) Not less than twenty days before the scheduled hearing on an application for approval of a transfer of structured settlement payment rights pursuant to Section 15-50-40, the transferee must file with the court and serve on all interested parties a notice of the proposed transfer and the application for its authorization. The notice must include:

(1) a copy of the transferee's application;

(2) a copy of the transfer agreement;

(3) a copy of the disclosure statement required pursuant to Section 15-50-30;

(4) a listing of each of the payee's dependents, and each dependent's age;

(5) notification that an interested party may support, oppose, or otherwise respond to the transferee's application, in person or by counsel, by submitting written comments to the court, or by participating in the hearing; and

(6) notification of the time and place of the hearing and notification of the manner and the time for filing written responses to the application, which must be not less than fifteen days after service of the transferee's notice, for consideration by the court.

SECTION 15-50-70. Scope of transfer agreement. [SC ST SEC 15-50-70]

(A) The provisions of this chapter may not be waived by a payee.

(B) A transfer agreement entered into on or after the effective date of this chapter by a payee who resides in this State must provide that disputes under the transfer agreement, including a claim that the payee has breached the agreement, must be determined pursuant to the laws of this State. A transfer agreement may not authorize the transferee or another party to confess judgment or consent to entry of judgment against the payee.

(C) Transfer of structured settlement payment rights do not extend to payments that are life-contingent unless, before the date on which the payee signs the transfer agreement, the transferee has established and has agreed to maintain procedures reasonably satisfactory to the annuity issuer and the structured settlement obligor for:

(1) periodically confirming the payee's survival; and

(2) giving the annuity issuer and the structured settlement obligor prompt written notice if the payee dies.

(D) A payee who proposes to make a transfer of structured settlement payment rights does not incur any penalty, forfeit any application fee or other payment, or otherwise incur a liability to the proposed transferee or an assignee based on a failure of the transfer to satisfy the conditions of this chapter.

(E) This chapter does not authorize a transfer of structured settlement payment rights in contravention of law nor imply that a transfer under a transfer agreement entered into before the effective date of this chapter is valid or invalid.

(F) Compliance with the requirements of Section 15-50-30 and fulfillment of the conditions in Section 15-50-40 are the sole responsibility of the transferee in a transfer of structured settlement payment rights, and neither the structured settlement obligor nor the annuity issuer bears responsibility for, or liability arising from, noncompliance with the requirements or failure to fulfill the conditions.

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: R.I. Gen. Laws § 27-9.3-2 (RI S.B. 727)

Enacted 7/13/2001

Effective 7/13/2001

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

SECTION 1. Title 27 of the General Laws entitled "Insurance" is hereby amended

by adding thereto the following chapter: CHAPTER 9.3

STATE STRUCTURED SETTLEMENT PROTECTION ACT

27-9.3-1. TITLE. - - THIS CHAPTER SHALL BE KNOWN AND REFERRED TO AS THE

"STRUCTURED SETTLEMENT PROTECTION ACT." 27-9.3-2. DEFINITIONS. -- FOR

PURPOSES OF THIS CHAPTER:

(1) "ANNUITY ISSUER" MEANS AN INSURER THAT HAS ISSUED A CONTRACT TO FUND

PERIODIC PAYMENTS UNDER A STRUCTURED SETTLEMENT;

(2) "DEPENDENTS" INCLUDE A PAYEE'S SPOUSE AND MINOR CHILDREN AND ALL OTHER

PERSONS FOR WHOM THE PAYEE IS LEGALLY OBLIGATED TO PROVIDE SUPPORT, INCLUDING

ALIMONY;

(3) "DISCOUNTED PRESENT VALUE" MEANS THE PRESENT VALUE OF FUTURE PAYMENTS

DETERMINED BY DISCOUNTING SUCH PAYMENTS TO THE PRESENT USING THE MOST RECENTLY

PUBLISHED APPLICABLE FEDERAL RATE FOR DETERMINING THE PRESENT VALUE OF AN

ANNUITY, AS ISSUED BY THE UNITED STATES INTERNAL REVENUE SERVICE;

(4) "GROSS ADVANCE AMOUNT" MEANS THE SUM PAYABLE TO THE PAYEE OR FOR THE

PAYEE'S ACCOUNT AS CONSIDERATION FOR A TRANSFER OF STRUCTURED SETTLEMENT

PAYMENT RIGHTS BEFORE ANY REDUCTIONS FOR TRANSFER EXPENSES OR OTHER DEDUCTIONS

TO BE MADE FROM SUCH CONSIDERATION;

(5) "INDEPENDENT PROFESSIONAL ADVICE" MEANS ADVICE OF AN ATTORNEY, CERTIFIED

PUBLIC ACCOUNTANT, ACTUARY OR OTHER LICENSED PROFESSIONAL ADVISER;

(6) "INDEPENDENT PARTIES" MEANS, WITH RESPECT TO ANY STRUCTURED SETTLEMENT,

THE PAYEE, ANY BENEFICIARY IRREVOCABLY DESIGNATED UNDER THE ANNUITY CONTRACT TO

RECEIVE PAYMENTS FOLLOWING THE PAYEE'S DEATH, THE ANNUITY ISSUER, THE

STRUCTURED SETTLEMENT OBLIGOR, AND ANY OTHER PARTY THAT HAS CONTINUING RIGHTS

OR OBLIGATIONS UNDER SUCH STRUCTURED SETTLEMENT;

(7) "NET ADVANCE AMOUNT" MEANS THE GROSS ADVANCE AMOUNT LESS THE AGGREGATE

AMOUNT OF THE ACTUAL AND ESTIMATED TRANSFER EXPENSES REQUIRED TO BE DISCLOSED

UNDER SECTION 27-9.3-3(5) OF THIS CHAPTER;

(8) "PAYEE" MEANS AN INDIVIDUAL WHO IS RECEIVING TAX FREE PAYMENTS UNDER A

STRUCTURED SETTLEMENT AND PROPOSES TO MAKE A TRANSFER OF PAYMENT RIGHTS

THEREUNDER;

(9) "PERIODIC PAYMENTS" INCLUDES BOTH RECURRING PAYMENTS AND SCHEDULED FUTURE

LUMP SUM PAYMENTS;

(10) "QUALIFIED ASSIGNMENT AGREEMENT" MEANS AN AGREEMENT PROVIDING FOR A

QUALIFIED ASSIGNMENT WITHIN THE MEANING OF SECTION 130 OF THE UNITED STATES

INTERNAL REVENUE CODE, UNITED STATES CODE TITLE 26, AS AMENDED FROM TIME TO

TIME;

(11) "RESPONSIBLE ADMINISTRATIVE AUTHORITY" MEANS, WITH RESPECT TO A

STRUCTURED SETTLEMENT, ANY GOVERNMENT AUTHORITY VESTED BY LAW WITH EXCLUSIVE

JURISDICTION OVER THE SETTLED CLAIM RESOLVED BY SUCH STRUCTURED SETTLEMENT;

(12) "SETTLED CLAIM" MEANS THE ORIGINAL TORT CLAIM OR WORKERS' COMPENSATION

CLAIM RESOLVED BY A STRUCTURED SETTLEMENT;

(13) "STRUCTURED SETTLEMENT" MEANS AN ARRANGEMENT FOR PERIODIC PAYMENT OF

DAMAGES FOR PERSONAL INJURIES OR SICKNESS ESTABLISHED BY SETTLEMENT OR JUDGMENT

IN RESOLUTION OF A TORT CLAIM OR FOR PERIODIC PAYMENTS IN SETTLEMENT OF A

WORKERS' COMPENSATION CLAIM;

(14) "STRUCTURED SETTLEMENT AGREEMENT" MEANS THE AGREEMENT, JUDGMENT,

STIPULATION, OR RELEASE EMBODYING THE TERMS OF A STRUCTURED SETTLEMENT;

(15) "STRUCTURED SETTLEMENT OBLIGOR" MEANS, WITH RESPECT TO ANY STRUCTURED

SETTLEMENT, THE PARTY HAS THE CONTINUING OBLIGATION TO MAKE PERIODIC PAYMENTS

TO THE PAYEE UNDER A STRUCTURED SETTLEMENT AGREEMENT OR A QUALIFIED ASSIGNMENT

AGREEMENT;

(16) "STRUCTURED SETTLEMENT PAYMENT RIGHTS" MEANS RIGHTS TO RECEIVE PERIODIC

PAYMENTS UNDER A STRUCTURED SETTLEMENT, WHETHER FROM THE STRUCTURED SETTLEMENT

OBLIGOR OR THE ANNUITY ISSUER, WHERE:

(I) THE PAYEE IS DOMICILED IN, OR THE DOMICILE OR PRINCIPAL PLACE OF BUSINESS

OF THE STRUCTURED SETTLEMENT OBLIGOR OR THE ANNUITY ISSUER IS LOCATED IN, THIS

STATE; OR

(II) THE STRUCTURED SETTLEMENT AGREEMENT WAS APPROVED BY A COURT OR

RESPONSIBLE ADMINISTRATIVE AUTHORITY IN THIS STATE; OR

(III) THE STRUCTURED SETTLEMENT AGREEMENT IS EXPRESSLY GOVERNED BY THE LAWS OF

THIS STATE;

(17) "TERMS OF THE STRUCTURED SETTLEMENT" INCLUDE, WITH RESPECT TO ANY

STRUCTURED SETTLEMENT, THE TERMS OF THE STRUCTURED SETTLEMENT AGREEMENT, THE

ANNUITY CONTRACT, ANY QUALIFIED ASSIGNMENT AGREEMENT AND ANY ORDER OR OTHER

APPROVAL OF ANY COURT OR RESPONSIBLE ADMINISTRATIVE AUTHORITY OR OTHER

GOVERNMENT AUTHORITY THAT AUTHORIZED OR APPROVED SUCH STRUCTURED SETTLEMENT;

(18) " TRANSFER " MEANS ANY SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR ANOTHER

ALIENATION OR ENCUMBRANCE OF STRUCTURED SETTLEMENT PAYMENT RIGHTS MADE BY A

PAYEE FOR CONSIDERATION; PROVIDED THAT THE TERM " TRANSFER " DOES NOT INCLUDE

THE CREATION OR PERFECTION OF A SECURITY INTEREST IN STRUCTURED SETTLEMENT

PAYMENT RIGHTS UNDER A BLANKET SECURITY AGREEMENT ENTERED INTO WITH AN INSURED

DEPOSITORY INSTITUTION, IN THE ABSENCE OF ANY ACTION TO REDIRECT THE STRUCTURED

SETTLEMENT PAYMENTS TO SUCH INSURED DEPOSITORY INSTITUTION, OR AN AGENT OR

SUCCESSOR IN INTEREST THEREOF, OR OTHERWISE TO ENFORCE SUCH BLANKET SECURITY

INTEREST AGAINST THE STRUCTURED SETTLEMENT PAYMENT RIGHTS;

(19) " TRANSFER AGREEMENT" MEANS THE AGREEMENT PROVIDING FOR A TRANSFER OF

STRUCTURED SETTLEMENT PAYMENT RIGHTS;

(20) " TRANSFER EXPENSES" MEANS ALL EXPENSES OF A TRANSFER THAT ARE REQUIRED

UNDER THE TRANSFER AGREEMENT TO BE PAID BY THE PAYEE OR DEDUCTED FROM THE GROSS

ADVANCE AMOUNT, INCLUDING, WITHOUT LIMITATION, COURT FILING FEES, ATTORNEYS'

FEES, ESCROW FEES, LIEN RECORDATION FEES, JUDGMENT AND LIEN SEARCH FEES,

FINDERS' FEES, COMMISSIONS, AND OTHER PAYMENTS TO A BROKER OR OTHER

INTERMEDIARY; "TRANSFER EXPENSES" DO NOT INCLUDE PREEXISTING OBLIGATIONS OF

THE PAYEE PAYABLE FOR THE PAYEE' S ACCOUNT FROM THE PROCEEDS OF A TRANSFER;

(21) "TRANSFEREE" MEANS A PARTY ACQUIRING OR PROPOSING TO ACQUIRE STRUCTURED

SETTLEMENT PAYMENT RIGHTS THROUGH A TRANSFER. 27-9.3-3. REQUIRED

DISCLOSURES TO PAYEE. -- NOT LESS THAN THREE (3) DAYS PRIOR TO THE DATE ON

WHICH A PAYEE SIGNS A TRANSFER AGREEMENT, THE TRANSFEREE SHALL PROVIDE TO THE

PAYEE A SEPARATE DISCLOSURE STATEMENT, IN BOLD TYPE NO SMALLER THAN FOURTEEN

(14) POINTS, SETTING FORTH:

(1) THE AMOUNTS AND DUE DATES OF THE STRUCTURED SETTLEMENT PAYMENTS TO BE

TRANSFERRED;

(2) THE AGGREGATE AMOUNT OF SUCH PAYMENTS;

(3) THE DISCOUNTED PRESENT VALUE OF THE PAYMENTS TO BE TRANSFERRED, WHICH

SHALL BE IDENTIFIED AS THE "CALCULATION OF CURRENT VALUE OF THE TRANSFERRED

STRUCTURED SETTLEMENT PAYMENTS UNDER FEDERAL STANDARDS FOR VALUING ANNUITIES,"

AND THE AMOUNT OF THE APPLICABLE FEDERAL RATE USED IN CALCULATING SUCH

DISCOUNTED PRESENT VALUE;

(4) THE GROSS ADVANCE AMOUNT;

(5) AN ITEMIZED LISTING OF ALL APPLICABLE TRANSFER EXPENSES, OTHER THAN

ATTORNEYS' FEES AND RELATED DISBURSEMENTS PAYABLE IN CONNECTION WITH THE

TRANSFEREE'S APPLICATION FOR APPROVAL OF THE TRANSFER, AND THE TRANSFEREE'S

BEST ESTIMATE OF THE AMOUNT OF ANY SUCH FEES AND DISBURSEMENTS;

(6) THE NET ADVANCE AMOUNT;

(7) THE AMOUNT OF ANY PENALTIES OR LIQUIDATED DAMAGES PAYABLE BY THE PAYEE IN

THE EVENT OF ANY BREACH OF THE TRANSFER AGREEMENT BY THE PAYEE; AND

(8) A STATEMENT THAT THE PAYEE HAS THE RIGHT TO CANCEL THE TRANSFER AGREEMENT,

WITHOUT PENALTY OR FURTHER OBLIGATION, NOT LATER THAN THE THIRD (3RD) BUSINESS

DAY AFTER THE DATE THE AGREEMENT IS SIGNED BY THE PAYEE. 27-9.3-4. APPROVAL

OF TRANSFERS OF STRUCTURED SETTLEMENT PAYMENT RIGHTS. -- (A) NO DIRECT OR

INDIRECT TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS SHALL BE EFFECTIVE

AND NO STRUCTURED SETTLEMENT OBLIGOR OR ANNUITY ISSUER SHALL BE REQUIRED TO

MAKE ANY PAYMENT DIRECTLY OR INDIRECTLY TO ANY TRANSFEREE OF STRUCTURED

SETTLEMENT PAYMENT RIGHTS UNLESS THE TRANSFER HAS BEEN APPROVED IN ADVANCE BY A

FINAL COURT ORDER OF THE SUPERIOR COURT FOR THE COUNTY IN WHICH THE PAYEE

RESIDES FINDING THAT:

(1) THE TRANSFER IS IN THE BEST INTEREST OF THE PAYEE, TAKING INTO ACCOUNT THE

WELFARE AND SUPPORT OF THE PAYEE'S DEPENDENTS; AND

(2) THE PAYEE HAS BEEN ADVISED IN WRITING BY THE TRANSFEREE TO SEEK

INDEPENDENT PROFESSIONAL ADVICE REGARDING THE TRANSFER AND HAS EITHER RECEIVED

SUCH ADVICE OR KNOWINGLY WAIVED SUCH ADVICE IN WRITING; AND

(3) THE TRANSFER DOES NOT CONTRAVENE ANY APPLICABLE STATUTE OR THE ORDER OF

ANY COURT OR OTHER GOVERNMENT AUTHORITY.

(B) THE PAYEE SHALL HAVE THE RIGHT TO CANCEL THE TRANSFER AGREEMENT, WITHOUT

PENALTY OR FURTHER OBLIGATION, NOT LATER THAN THE THIRD (3RD) BUSINESS DAY

AFTER THE DATE THE TRANSFER AGREEMENT IS SIGNED BY THE PAYEE. 27-9.3-5.

EFFECTS OF TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS. -- FOLLOWING A

TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS UNDER THIS CHAPTER:

(1) THE STRUCTURED SETTLEMENT OBLIGOR AND THE ANNUITY ISSUER SHALL, AS TO ALL

PARTIES EXCEPT THE TRANSFEREE, BE DISCHARGED AND RELEASED FROM ANY AND ALL

LIABILITY FOR THE TRANSFERRED PAYMENTS;

(2) THE TRANSFEREE SHALL BE LIABLE TO THE STRUCTURED SETTLEMENT OBLIGOR AND

THE ANNUITY ISSUER:

(I) IF THE TRANSFER CONTRAVENES THE TERMS OF THE STRUCTURED SETTLEMENT, FOR

ANY TAXES INCURRED BY SUCH PARTIES AS A CONSEQUENCE OF THE TRANSFER; AND

(II) FOR ANY OTHER LIABILITIES OR COSTS, INCLUDING REASONABLE COSTS AND

ATTORNEYS' FEES, ARISING FROM COMPLIANCE BY SUCH PARTIES WITH THE ORDER OF THE

SUPERIOR COURT OR ARISING AS A CONSEQUENCE OF THE TRANSFEREE'S FAILURE TO

COMPLY WITH THIS CHAPTER;

(3) NEITHER THE ANNUITY ISSUER NOR THE STRUCTURED SETTLEMENT OBLIGOR MAY BE

REQUIRED TO DIVIDE ANY PERIODIC PAYMENT BETWEEN THE PAYEE AND ANY TRANSFEREE OR

ASSIGNEE OR BETWEEN TWO (2) (OR MORE) OR ASSIGNEES; AND

(4) ANY FURTHER TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS BY THE PAYEE

MAY BE MADE ONLY AFTER COMPLIANCE WITH ALL OF THE REQUIREMENTS OF THIS CHAPTER.

27-9.3-6. PROCEDURE FOR APPROVAL OF TRANSFERS. -- (A) AN APPLICATION UNDER

THIS CHAPTER FOR APPROVAL OF A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT

RIGHTS SHALL BE MADE BY THE TRANSFEREE AND SHALL BE BROUGHT IN THE SUPERIOR

COURT FOR THE COUNTY IN WHICH THE PAYEE RESIDES.

(B) NOT LESS THAN TWENTY (20) DAYS PRIOR TO THE SCHEDULED HEARING ON ANY

APPLICATION FOR APPROVAL OF A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS

UNDER SECTION 27-9.3-4, THE TRANSFEREE SHALL FILE WITH THE COURT AND SERVE ON

ALL INTERESTED PARTIES A NOTICE OF THE PROPOSED TRANSFER AND THE APPLICATION

FOR ITS AUTHORIZATION, INCLUDING WITH SUCH NOTICE:

(1) A COPY OF THE TRANSFEREE'S APPLICATION;

(2) A COPY OF THE TRANSFER AGREEMENT;

(3) A COPY OF THE DISCLOSURE STATEMENT REQUIRED UNDER SECTION 27-9.3-3 OF THIS

CHAPTER;

(4) A LISTING OF EACH OF THE PAYEE'S DEPENDENTS, TOGETHER WITH EACH

DEPENDENT'S AGE;

(5) NOTIFICATION THAT ANY INTERESTED PARTY IS ENTITLED TO SUPPORT, OPPOSE OR

OTHERWISE RESPOND TO THE TRANSFEREE'S APPLICATION, EITHER IN PERSON OR BY

COUNSEL, BY SUBMITTING WRITTEN COMMENTS TO THE COURT OR RESPONSIBLE

ADMINISTRATIVE AUTHORITY OR BY PARTICIPATING IN THE HEARING; AND

(6) NOTIFICATION OF THE TIME AND PLACE OF THE HEARING AND NOTIFICATION OF THE

MANNER IN WHICH AND THE TIME BY WHICH WRITTEN RESPONSES TO THE APPLICATION MUST

BE FILED (WHICH SHALL BE NOT LESS THAN FIFTEEN (15) DAYS AFTER SERVICE OF THE

TRANSFEREE'S NOTICE) IN ORDER TO BE CONSIDERED BY THE COURT OR RESPONSIBLE

ADMINISTRATIVE AUTHORITY.

27-9.3-7. GENERAL PROVISIONS CONSTRUCTION. - - (A) THE PROVISIONS OF THIS

CHAPTER MAY NOT BE WAIVED BY ANY PAYEE.

(B) ANY TRANSFER AGREEMENT ENTERED INTO ON OR AFTER THE EFFECTIVE DATE OF THIS

CHAPTER BY A PAYEE WHO RESIDES IN THIS STATE SHALL PROVIDE THAT DISPUTES UNDER

SUCH TRANSFER AGREEMENT, INCLUDING ANY CLAIM THAT THE PAYEE HAS BREACHED THE

AGREEMENT, SHALL BE DETERMINED IN AND UNDER THE LAWS OF THIS STATE. NO SUCH

TRANSFER AGREEMENT SHALL AUTHORIZE THE TRANSFEREE OR ANY OTHER PARTY TO CONFESS

JUDGEMENT OR CONSENT TO ENTRY OF JUDGMENT AGAINST THE PAYEE.

(C) NO TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS SHALL EXTEND TO ANY

PAYMENTS THAT ARE LIFE-CONTINGENT UNLESS, PRIOR TO THE DATE ON WHICH THE PAYEE

SIGNS THE TRANSFER AGREEMENT, THE TRANSFEREE HAS ESTABLISHED AND HAS AGREED TO

MAINTAIN PROCEDURES REASONABLY SATISFACTORY TO THE ANNUITY ISSUER AND THE

STRUCTURED SETTLEMENT OBLIGOR FOR (1) PERIODICALLY CONFIRMING THE PAYEE'S

SURVIVAL, AND (2) GIVING THE ANNUITY ISSUER AND THE STRUCTURED SETTLEMENT

OBLIGOR PROMPT WRITTEN NOTICE IN THE EVENT OF THE PAYEE'S DEATH.

(D) NO PAYEE WHO PROPOSES TO MAKE A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT

RIGHTS SHALL INCUR ANY PENALTY, FORFEIT ANY APPLICATION FEE OR OTHER PAYMENT,

OR OTHERWISE INCUR ANY LIABILITY TO THE PROPOSED TRANSFEREE OR ANY ASSIGNEE

BASED ON ANY FAILURE OF SUCH TRANSFER TO SATISFY THE CONDITIONS OF THIS

CHAPTER.

(E) NOTHING CONTAINED IN THIS CHAPTER SHALL BE CONSTRUED TO AUTHORIZE ANY

TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS IN CONTRAVENTION OF ANY LAW OR TO IMPLY THAT ANY TRANSFER UNDER A TRANSFER AGREEMENT ENTERED INTO PRIOR TO THE EFFECTIVE DATE OF THIS CHAPTER IS VALID OR INVALID.

(F) COMPLIANCE WITH THE REQUIREMENTS SET FORTH IN SECTION 27-9.3-3 AND

FULFILLMENT OF THE CONDITIONS SET FORTH IN SECTION 27-9.3-4 SHALL BE SOLELY THE

RESPONSIBILITY OF THE TRANSFEREE IN ANY TRANSFER OF STRUCTURED SETTLEMENT

PAYMENT RIGHTS, AND NEITHER THE STRUCTURED SETTLEMENT OBLIGOR NOR THE ANNUITY

ISSUER SHALL BEAR ANY RESPONSIBILITY FOR, OR ANY LIABILITY ARISING FROM,

NONCOMPLIANCE WITH SUCH REQUIREMENTS OR FAILURE TO FULFILL SUCH CONDITIONS.

SECTION 2. This act shall take effect upon passage and shall apply to any

transfer of structured settlement payment rights under a transfer agreement

entered into on or after the thirtieth (30th) day after the date of enactment

of this chapter; provided, however, that nothing contained herein shall imply

that any transfer under a transfer agreement reached prior to such date is

either effective or ineffective.

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: 40 P.C. §4002 et seq. (SB 1818)

Enacted 2/11/2000

Effective 4/11/2000

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

40 P.S. Sec. 4002 et seq.

§ 4002. Definitions
The following words and phrases when used in this act shall have the meanings given to them in this section unless the context clearly indicates otherwise:
"Annuity issuer." An insurer, or subsidiary or affiliate thereof, that has issued an insurance contract used to fund periodic payments under a structured settlement.
"Applicable law." The laws of the United States, the laws of this Commonwealth and the laws of any other jurisdiction under whose laws a structured settlement agreement was approved by a court or responsible administrative authority.
"Best interests." The standard applicable to transfers of structured settlement payment rights based on judicial findings regarding the payee and his dependents, as required by section 3(a)(3), unless if at the time the payee and the transferee enter into the transfer agreement a different standard is contained in the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.) or in a United States Treasury regulation adopted pursuant thereto, then such different standard.
"Dependents." Include a payee's spouse and minor children and all other family members and other persons for whom the payee is legally obligated to provide support, including alimony.
"Discounted present value." The fair present value of future payments, as determined by discounting such payments to the present using the most recently published applicable Federal rate for determining the present value of an annuity, as issued by the United States Internal Revenue Service.
"Favorable tax determination." With respect to a proposed transfer of structured settlement payment rights, any of the following authorities that is binding on the parties to such transfer and on the parties to the structured settlement agreement and any qualified assignment agreement and that definitively establishes that the Federal income tax treatment of the structured settlement for the parties to the structured settlement agreement and any qualified assignment agreement, other than the payee, will not be affected by such transfer:
(1) a provision of the Internal Revenue Code of 1986 (Public Law
99-514, 26 U.S.C. § 1 et seq.) or United States Treasury regulation;
(2) a published ruling by the United States Internal Revenue Service;
(3) a private letter ruling by the United States Internal Revenue
Service with respect to such transfer; or
(4) other controlling legal authority that is binding on the United
States Internal Revenue Service.
"Payee." A person domiciled in this Commonwealth who is receiving tax-free payments under a structured settlement and proposes to make a transfer of payment rights thereunder.
"Periodic payments." Payments made pursuant to a structured settlement agreement, including scheduled future lump sum payments.
"Qualified assignment agreement." An agreement providing for a qualified assignment within the meaning of section 130 of the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.).
"Settled claim." The original personal injury or sickness claim or workers' compensation claim resolved by a structured settlement.
"Structured settlement." An arrangement for periodic payment of damages established by settlement, judgment or decree in resolution of a settled claim.
"Structured settlement agreement." The agreement, judgment, decree, stipulation or release embodying the terms of a structured settlement, including the rights of the payee to receive periodic payments.
"Structured settlement obligor." With respect to any structured settlement, the party that has the continuing obligation to provide periodic payments to the payee under a structured settlement agreement or a qualified assignment agreement.
"Structured settlement payment rights." Rights to receive periodic payments under a structured settlement, whether from the settlement obligor or the annuity issuer, where the payee is domiciled in this Commonwealth.
"Terms of the structured settlement." Include, with respect to any structured settlement, the terms of the structured settlement agreement, the annuity contract, any qualified assignment agreement and any order, decree or approval of any court or responsible administrative authority authorizing or approving such structured settlement.
"Transfer." Any direct or indirect sale, assignment, pledge, hypothecation or other form of alienation, redirection or encumbrance made by a payee for consideration, provided, however, that this shall not apply to a blanket security agreement used to secure a loan originating from a Federal or State chartered lending institution. Any transfer made or agreed to under this act shall be considered to be a consumer transaction.
"Transfer agreement." The agreement providing for transfer of structured settlement payment rights from a payee to a transferee.
"Transferee." The party acquiring or proposing to acquire structured settlement payment rights through a transfer.

§ 4003. Conditions to transfers of structured settlement payment rights
(A) PETITION.-- No transfer of structured settlement payment rights shall be effective and no structured settlement obligor or annuity issuer shall be required to make any payment to any transferee of structured settlement payment rights unless the payee has filed a petition requesting such transfer and the petition has been granted by final order or decree of a court of competent jurisdiction based on such court's express written findings that:
(1) The transfer complies with the requirements of this act and will
not contravene other applicable Federal or State statutes or
regulations or any applicable law limiting the transfer of workers'
compensation claims.
(2) Not less than ten days prior to the date on which the payee first
incurred any obligation with respect to the transfer, the transferee
has provided to the payee a disclosure statement setting forth all of
the following:
(i) The amounts and due dates of the structured settlement payments
to be transferred.
(ii) The aggregate amount of such payments.
(iii) The discounted present value of such payments, together with
the discount rate or rates used in determining such discounted
present value.
(iv) The gross amount payable to the payee in exchange for such
payments .
(v) An itemized listing of all brokers' commissions, service charges,
application or processing fees, closing costs, filing or
administrative charges, legal fees, notary fees and other
commissions, fees, costs, expenses and charges payable by the payee
or deductible from the gross amount otherwise payable to the payee.
(vi) The net amount payable to the payee after deduction of all
commissions, fees, costs, expenses and charges described in
subparagraph (v) .
(vii) The quotient, expressed as a percentage, obtained by dividing
the net payment amount by the discounted present value of the
payments.
(viii) The amount of any penalty and the aggregate amount of any
liquidated damages, inclusive of penalties, payable by the payee in
the event of any breach of the transfer agreement by the payee.
(3) The payee has established that the transfer is in the best
interests of the payee or his dependents.
(4) The payee has received or expressly waived in a separate written
acknowledgment signed by the payee, independent legal advice regarding
the implications of the transfer, including consideration of the tax
ramifications of the transfer.
(5) If the transfer would contravene the terms of the structured
settlement:
(i) the transfer has been expressly approved in writing by:
(A) the payee, the structured settlement obligor and the annuity
issuer, provided, however, that such approval may not be
unreasonably withheld and further provided that the structured
settlement obligor and the annuity issuer shall be required to
consent to the transfer if the transferee has agreed to indemnify
the structured settlement obligor and annuity issuer from all
liabilities arising from the factoring transaction and compliance
or noncompliance with this act and further provided that if at the
time the payee and the transferee propose to enter into the
transfer agreement a favorable tax result is in effect, then the
approval of the annuity issuer and the structured settlement
obligor shall not be required; and
(B) any court or responsible administrative authority that
previously approved the structured settlement; and
(ii) signed originals of all approvals required under subparagraph
(i) have been filed with the court from which the authorization of
the transfer is being sought and originals or copies have been
furnished to the payee, the structured settlement obligor and the
annuity issuer.
(6) The payee has given written notice of the transferee's name,
address and taxpayer identification number to the annuity issuer and
the structured settlement obligor and has filed a copy of such notice
with the court.
(B) NOTICE.-- Prior to entering into any agreement to make a transfer under this act, the payee shall be provided with a written notice on a separate sheet that contains the following, in bold print and at least 12-point type:
IMPORTANT NOTICE: You are strongly urged to consult with an attorney
who can advise you of the potential tax consequences of this
transaction.
(C) BONDS.-- If the indemnity in subsection (a)(5)(i)(A) is offered, the court shall require that the transferee obtain a surety bond or an irrevocable standby letter of credit to secure the indemnity obligation. In considering the necessity and amount of any bond, the court shall consider the size of the underlying transaction and the potential liabilities of the structured settlement obligor and annuity issuer.

§ 4004. Jurisdiction; procedure for approval of transfers
The court of common pleas of the judicial district in which the payee is domiciled shall have jurisdiction over any petition as required under section 3 for a transfer of structured settlement payment rights. Not less than 20 days prior to the scheduled hearing on any petition for authorization of a transfer of structured settlement payment rights under section 3, the payee shall file with the court and serve on the transferee a notice of the proposed transfer and the application for its authorization, including in such notice a copy of the payee's petition to the court, a copy of the transfer agreement, a copy of the disclosure statement required under section 3, notification that the transferee, the structured settlement obligor or the annuity issuer is entitled to support, oppose or otherwise respond to the payee's petition, either in person or by counsel, by submitting written comments to the court or by participating in the hearing and notification of the time and place of the hearing and notification of the manner in which and the time by which written responses to the petition must be filed, which shall be not less than 20 days after service of the payee's notice, in order to be considered by the court.
§ 4005. Discharge of structured settlement obligor and annuity issuer Upon an appropriate judicial order approving a petition for a transfer of structured settlement payment rights, the structured settlement obligor and annuity issuer shall be discharged from all liability for the payments and portions thereof transferred as to all parties except the transferee.

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: Senate Bill 645

Enacted 1/1/2006

Effective 1/1/2006

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

Chapter 173, Laws of 2005
73rd OREGON LEGISLATIVE ASSEMBLY--2005 Regular Session

 

Senate Bill 645
AN ACT 

Relating to transfers of structured settlement rights.

Be It Enacted by the People of the State of Oregon:  

SECTION 1. As used in sections 1 to 6 of this 2005 Act:
(1) 'Annuity issuer' means an insurer that has entered into a contract to fund periodic payments under a structured settlement agreement.
(2) 'Obligor' means a party that has a continuing obligation to make periodic payments to a payee under a structured settlement agreement or an agreement that provides for a qualified assignment as defined in section 130 of the Internal Revenue Code, as of January 1, 2006.
(3) 'Payee' means an individual who is receiving tax-free payments under a structured settlement agreement and proposes to make a transfer of payment rights.
(4) 'Payment rights' means rights to receive periodic payments under a structured settlement agreement, whether from the obligor or the annuity issuer.
(5) 'Periodic payments' includes both recurring payments and scheduled future lump sum payments.
(6) 'Responsible administrative authority' means a government authority vested by law with exclusive jurisdiction over the original tort claim or workers' compensation claim that was resolved in a structured settlement agreement.
(7) 'Structured settlement agreement' means an agreement, judgment, stipulation or release embodying the terms of an arrangement for periodic payment of damages from an obligor or an annuity issuer for:
(a) Personal injuries or sickness established by settlement or judgment in resolution of a tort claim; or
(b) Periodic payments in settlement of a workers' compensation claim.
(8) 'Terms of the structured settlement agreement' includes the terms of:
(a) A structured settlement agreement;
(b) An annuity contract;
(c) An agreement that provides for a qualified assignment as defined in section 130 of the Internal Revenue Code, as of January 1, 2006; and
(d) Any order or other approval of any court, responsible administrative authority or other government authority that authorized or approved the structured settlement agreement.
(9) 'Transfer' means any sale, assignment, pledge or other alienation or encumbrance of payment rights made by a payee for consideration. 'Transfer' does not include the creation or perfection of an unspecified security interest in all of the payee's payment rights entered into with an insured depository institution, or an agent or successor in interests of the insured depository institution, in the absence of any action to redirect the payments under the structured settlement agreement to the insured depository institution or otherwise to enforce a security interest against the payment rights.
(10) 'Transfer agreement' means an agreement providing for a transfer of payment rights.
(11) 'Transferee' means a party acquiring or proposing to acquire payment rights through a transfer agreement. + }

SECTION 2. (1) A payee may transfer payment rights under sections 1 to 6 of this 2005 Act if:
(a) The payee is domiciled in this state;
(b) The domicile or principal place of business of the obligor or the annuity issuer is located in this state;
(c) The structured settlement agreement was approved by a court or responsible administrative authority in this state; or
(d) The structured settlement agreement is expressly governed by the laws of this state.
(2) Prior to transferring payment rights under sections 1 to 6 of this 2005 Act, the transferee shall file an application for approval of the transfer in:
(a) The county in which the payee resides;
(b) The county in which the obligor or the annuity issuer maintains its principal place of business; or
(c) Any court or before any responsible administrative authority that approved the structured settlement agreement.
(3) Not less than 20 days prior to the scheduled hearing on an application for approval of a transfer of payment rights, the transferee shall send notice of the proposed transfer to:
(a) The payee;
(b) Any beneficiary irrevocably designated under the annuity contract to receive payments following the payee's death;
(c) The annuity issuer;
(d) The obligor; and
(e) Any other party that has continuing rights or obligations under the structured settlement agreement that is the subject of the hearing.
(4) The notice sent under subsection (3) of this section shall include:
(a) A copy of the transferee's application.
(b) A copy of the transfer agreement.
(c) A copy of the disclosure statement provided to the payee as required under section 3 of this 2005 Act.
(d) A listing of each person for whom the payee is legally obligated to provide support, including the age of each of those persons.
(e) Notification that any person receiving notice under subsection (3) of this section is entitled to support, oppose or otherwise respond to the transferee's application, either in person or by counsel, by submitting written comments to the court or responsible administrative authority or by participating in the hearing.
(f) Notification of the time and place of the hearing and notification of the manner in which and the time by which written responses to the application must be filed, which shall not be less than 15 days after service of the transferee's notice, in order to be considered by the court or responsible administrative authority.

SECTION 3. Not less than three days prior to the day on which a payee is scheduled to sign a transfer agreement, a transferee shall provide the payee with a statement in not less than 14-point type that sets forth:
(1) The amounts and due dates of the structured settlement payments to be transferred.
(2) The aggregate amount of the payments to be transferred.
(3) The discounted present value of the payments and the rate used in calculating the discounted present value. The discounted present value shall be calculated by using the most recently published applicable federal rate for determining the present value of an annuity, as issued by the Internal Revenue Service.
(4) The amount payable to a payee as the result of a transfer. The amount set forth in this subsection shall be calculated before any reductions are made for transfer expenses required to be listed under subsection (5) of this section or any related disbursements.
(5) An itemized listing of all applicable transfer expenses and the transferee's best estimate of the amount of any attorney fees and disbursements. For the purposes of this subsection, ' transfer expenses':
(a) Includes all expenses of a transfer that are required under the transfer agreement to be paid by the payee or deducted from the amount payable to a payee as the result of a transfer.
(b) Does not include attorney fees and related disbursements payable in connection with the transferee's application for approval of the transfer or preexisting obligations of the payee payable for the payee's account from the proceeds of a transfer.
(6) The amount calculated by subtracting the aggregate amount of the actual and estimated transfer expenses required to be listed under subsection (5) of this section from the amount identified in subsection (4) of this section.
(7) The amount of any penalties or liquidated damages payable by the payee in the event of a breach of the transfer agreement by the payee.
(8) A statement that the payee has the right to cancel the transfer agreement, without penalty or further obligation, not later than the third business day after the date the agreement is signed by the payee.

SECTION 4. A transfer of payment rights under sections 1 to 6 of this 2005 Act is not effective and an obligor or annuity issuer is not required to make any payments directly or indirectly to a transferee unless the transfer has been approved in advance in a final court order or order of a responsible administrative authority based on express findings by the court or authority that:
(1) The transfer is in the best interest of the payee, taking into account the welfare and support of all persons for whom the payee is legally obligated to provide support.
(2) The payee has been advised in writing by the transferee to seek advice from an attorney, certified public accountant, actuary or other licensed professional adviser regarding the transfer, and the payee has either received the advice or knowingly waived advice in writing.
(3) The transfer does not contravene any applicable statute or order of any court or other government authority.

SECTION 5. Following a transfer of payment rights under sections 1 to 6 of this 2005 Act:
(1) The obligor and the annuity issuer shall, as to all parties except the transferee, be discharged and released from all liability for the transferred payments.
(2) The transferee shall be liable to the obligor and the annuity issuer:
(a) If the transfer contravenes the terms of the structured settlement agreement, for any taxes incurred by the parties as a consequence of the transfer; and
(b) For any other liabilities or costs, including reasonable costs and attorney fees, arising from compliance by the parties with the order of the court or responsible administrative authority or arising as a consequence of the transferee's failure to comply with sections 1 to 6 of this 2005 Act.
(3) An annuity issuer or an obligor may not be required to divide any periodic payments between the payee and any transferee or assignee or between two or more transferees or assignees.
(4) Any further transfer of payment rights by the payee may be made only after compliance with all of the requirements of sections 1 to 6 of this 2005 Act.

SECTION 6. (1) The provisions of sections 1 to 6 of this 2005 Act may not be waived by any payee.
(2) A transfer agreement entered into on or after the effective date of this 2005 Act by a payee who resides in this state shall provide that disputes under the transfer agreement, including any claim that the payee has breached the agreement, shall be determined under the laws of this state. A transfer agreement may not authorize the transferee or any other party to confess judgment or consent to entry to judgment against the payee.
(3) A transfer of payment rights may not extend to any payments that are life contingent unless, prior to the date on which the payee signs the transfer agreement, the transferee has established and has agreed to maintain procedures reasonably satisfactory to the annuity issuer and the obligor for:
(a) Periodically confirming the payee's survival.
(b) Giving the annuity issuer and the obligor prompt written notice in the event of the payee's death.
(4) A payee who proposes to make a transfer of payment rights does not incur any penalty, forfeit any application fee or other payment, or otherwise incur any liability to the proposed transferee or a assignee based on any failure of the transfer to satisfy the conditions of sections 1 to 6 of this 2005 Act.
(5) Nothing in sections 1 to 6 of this 2005 Act shall be construed to authorize a transfer of payment rights in contravention of any law or to imply that any transfer under a transfer agreement entered into prior to the effective date of this 2005 Act is valid or invalid.
(6) Compliance with the requirements set forth in section 3 of this 2005 Act and fulfillment of the conditions set forth in section 2 of this 2005 Act shall be solely the responsibility of the transferee in any transfer of payment rights, and neither the obligor nor the annuity issuer shall bear any responsibility for, or any liability arising from, noncompliance with the requirements or failure to fulfill the conditions.

SECTION 7. Sections 1 to 6 of this 2005 Act apply to transfer agreements entered into on or after the effective date of this 2005 Act.

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: 12 Okl. St. § 3239 (OK S.B. 545)

Enacted 4/10/2001

Effective 11/1/2001

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

SECTION 1. NEW LAW A new section of law to be codified in the Oklahoma Statutes

as Section 3238 of Title 12, unless there is created a duplication in

numbering, reads as follows:

This act shall be known and may be cited as the "Structured Settlement

Protection Act of 2001".

SECTION 2. NEW LAW A new section of law to be codified in the Oklahoma

Statutes as Section 3239 of Title 12, unless there is created a duplication in

numbering, reads as follows:

As used in the Structured Settlement Protection Act of 2001:

1. "Annuity issuer" means an insurer that has issued a contract to fund

periodic payments under a structured settlement;

2. "Dependents" include a payee's spouse and minor children and all other

persons for whom the payee is legally obligated to provide support, including

alimony;

3. "Discounted present value" means the present value of future payments

determined by discounting the payments to the present using the most recently

published applicable federal rate for determining the present value of an

annuity, as issued by the United States Internal Revenue Service;

4. "Gross advance amount" means the sum payable to the payee or for the payee's

account as consideration for a transfer of structured settlement payment

rights before any reductions for transfer expenses or other deductions to be

made from the consideration;

5. "Independent professional advice" means advice of an attorney, certified

public accountant, actuary or other licensed professional adviser;

6. "Interested parties" means, with respect to any structured settlement, the

payee, any beneficiary irrevocably designated under the annuity contract to

receive payments following the payee's death, the annuity issuer, the

structured settlement obligor, and any other party that has continuing rights

or obligations under the structured settlement;

7. "Net advance amount" means the gross advance amount less the aggregate

amount of the actual and estimated transfer expenses required to be disclosed

under paragraph 5 of Section 3 of this act;

8. "Payee" means an individual who is receiving tax-free payments under a

structured settlement and proposes to make a transfer of the payment rights;

9. "Periodic payments" includes both recurring payments and scheduled future

lump sum payments;

10. "Qualified assignment agreement" means an agreement providing for a

qualified assignment within the meaning of section 130 of the United States

Internal Revenue Code, United States Code Title 26, as amended from time to

time;

11. "Responsible administrative authority" means, with respect to a structured

settlement, any government authority vested by law with exclusive jurisdiction

over the settled claim resolved by the structured settlement;

12. "Settled claim" means the original tort claim or workers compensation claim

resolved by a structured settlement;

13. "Structured settlement" means an arrangement for periodic payment of

damages for personal injuries or sickness established by settlement or judgment

in resolution of a tort claim or for periodic payments in settlement of a

workers compensation claim;

14. "Structured settlement agreement" means the agreement, judgment,

stipulation, or release embodying the terms of a structured settlement;

15. "Structured settlement obligor" means, with respect to any structured

settlement, the party that has the continuing obligation to make periodic

payments to the payee under a structured settlement agreement or a qualified

assignment agreement;

16. "Structured settlement payment rights" means rights to receive periodic

payments under a structured settlement, whether from the structured settlement

obligor or the annuity issuer, where:

 

a. the payee is domiciled in, or the domicile or principal place of business of

the structured settlement obligor or the annuity issuer is located in this

state,

b. the structured settlement agreement was approved by a court or responsible

administrative authority in this state, or

c. the structured settlement agreement is expressly governed by the laws of

this state;

17. "Terms of the structured settlement" include, with respect to any

structured settlement, the terms of the structured settlement agreement, the

annuity contract, any qualified assignment agreement and any order or other

approval of any court or responsible administrative authority or other

government authority that authorized or approved such structured settlement;

18. " Transfer " means any sale, assignment, pledge, hypothecation or other

alienation or encumbrance of structured settlement payment rights made by a

payee for consideration; provided that the term " transfer " does not include

the creation or perfection of a security interest in structured settlement

payment rights under a blanket security agreement entered into with an insured

depository institution, in the absence of any action to redirect the structured

settlement payments to the insured depository institution, or an agent or

successor in interest thereof, or otherwise to enforce the blanket security

interest against structured settlement payment rights;

19. " Transfer agreement" means the agreement providing for a transfer of

structured settlement payment rights;

20. " Transfer expenses" means all expenses of a transfer that are required

under the transfer agreement to be paid by the payee or deducted from the gross

advance amount, including, without limitation, court filing fees, finders fees,

commissions, and other payments to a broker or other intermediary; "transfer

expenses" do not include preexisting obligations of the payee payable for the

payee's account from the proceeds of a transfer; and

21. "Transferee" means a party acquiring or proposing to acquire structured

settlement payment rights through a transfer;

SECTION 3. NEW LAW A new section of law to be codified in the Oklahoma Statutes

as Section 3240 of Title 12, unless there is created a duplication in

numbering, reads as follows:

Not less than three (3) days prior to the date on which a payee signs a

transfer agreement, the transferee shall provide to the payee a separate

disclosure statement, in bold type no smaller than fourteen (14) point, to

include the following:

1. The amounts and due dates of the structured settlement payments to be

transferred;

2. The aggregate amount of the payments;

 

3. The discounted present value of the payments to be transferred, which shall

be identified as the "calculation of current value of the transferred

structured settlement payments under federal standards for valuing annuities",

and the amount of the applicable federal rate used in calculating such

discounted present value;

4. The gross advance amount;

5. An itemized listing of all applicable transfer expenses, other than

attorneys fees and related disbursements payable in connection with the

transferee's application for approval of the transfer, and the transferee s

best estimate of the amount of any such fees and disbursements;

6. The net advance amount;

7. The amount of any penalties or liquidated damages payable by the payee in

the event of any breach of the transfer agreement by the payee; and

8. A statement that the payee has the right to cancel the transfer agreement,

without penalty or further obligation, not later than the third business day

after the date the agreement is signed by the payee.

SECTION 4. NEW LAW A new section of law to be codified in the Oklahoma Statutes

as Section 3241 of Title 12, unless there is created a duplication in

numbering, reads as follows:

No direct or indirect transfer of structured settlement payment rights shall be

effective and no structured settlement obligor or annuity issuer shall be

required to make any payment directly or indirectly to any transferee of

structured settlement payment rights unless the transfer has been approved in

advance in a final court order or order of a responsible administrative

authority based on express findings by such court or responsible administrative

authority that:

1. The transfer is in the best interest of the payee, taking into account the

welfare and support of the payee's dependents;

2. The payee has been advised in writing by the transferee to seek independent

professional advice regarding the transfer and has either received the advice

or knowingly waived the advice in writing; and

3. The transfer does not contravene any applicable statute or the order of any

court or other government authority.

SECTION 5. NEW LAW A new section of law to be codified in the Oklahoma Statutes

as Section 3242 of Title 12, unless there is created a duplication in

numbering, reads as follows:

Following a transfer of structured settlement payment rights under the

Structured Settlement Protection Act of 2001:

1. The structured settlement obligor and the annuity issuer shall, as to all

parties except the transferee, be discharged and released from any and all

liability for the transferred payments;

2. The transferee shall be liable to the structured settlement obligor and the

annuity issuer:

a. if the transfer contravenes the terms of the structured settlement, for any

taxes incurred by such parties as a consequence of the transfer, and

b. for any other liabilities or costs, including reasonable costs and attorneys

fees, arising from compliance by the parties with the order of the court or

responsible administrative authority or arising as a consequence of the

transferee's failure to comply with this act;

3. Neither the annuity issuer nor the structured settlement obligor may be

required to divide any periodic payment between the payee and any transferee or

assignee or between two or more transferees or assignees; and

4. Any further transfer of structured settlement payment rights by the payee

may be made only after compliance with all of the requirements of the

Structured Settlement Protection Act of 2001.

SECTION 6. NEW LAW A new section of law to be codified in the Oklahoma Statutes

as Section 3243 of Title 12, unless there is created a duplication in

numbering, reads as follows:

A. An application under the Structured Settlement Protection Act for approval

of a transfer of structured settlement payment rights shall be made by the

transferee and may be brought in the county in which the payee resides, in the

county in which the structured settlement obligor or the annuity issuer

maintains its principal place of business, or in any court or before any

responsible administrative authority which approved the structured settlement

agreement.

B. Not less than twenty (20) days prior to the scheduled hearing on any

application for approval of a transfer of structured settlement payment rights

under Section 4 of this act, the transferee shall file with the court or

responsible administrative authority and serve on all interested parties a

notice of the proposed transfer and the application for its authorization,

including with such notice:

1. A copy of the transferee's application;

2. A copy of the transfer agreement;

3. A copy of the disclosure statement required under Section 3 of this act;

4. A listing of each of the payee's dependents, together with each dependent's

age;

5. Notification that any interested party is entitled to support, oppose or

otherwise respond to the transferee's application, either in person or by

counsel, by submitting written comments to the court or responsible

administrative authority or by participating in the hearing; and

 

6. Notification of the time and place of the hearing and notification of the

manner in which and the time by which written responses to the application must

be filed, which shall be not less than fifteen (15) days after service of the

transferee's notice, in order to be considered by the court or responsible

administrative authority.

SECTION 7. NEW LAW A new section of law to be codified in the Oklahoma Statutes

as Section 3244 of Title 12, unless there is created a duplication in

numbering, reads as follows:

A. The provisions of the Structured Settlement Protection Act of 2001 may not

be waived by any payee.

B. Any transfer agreement entered into on or after the effective date of this

act by a payee who resides in this state shall provide that disputes under such

transfer agreement, including any claim that the payee has breached the

agreement, shall be determined in and under the laws of this state. No such

transfer agreement shall authorize the transferee or any other party to confess

judgment or consent to entry of judgment against the payee.

C. No transfer of structured settlement payment rights shall extend to any

payments that are life-contingent unless, prior to the date on which the payee

signs the transfer agreement, the transferee has established and has agreed to

maintain procedures reasonably satisfactory to the annuity issuer and the

structured settlement obligor for:

1. Periodically confirming the payee's survival; and

2. Giving the annuity issuer and the structured settlement obligor prompt

written notice in the event of the payee's death.

D. No payee who proposes to make a transfer of structured settlement payment

rights shall incur any penalty, forfeit any application fee or other payment,

or otherwise incur any liability to the proposed transferee or any assignee

based on any failure of such transfer to satisfy the conditions of this act.

E. Nothing contained in this act shall be construed to authorize any transfer

of structured settlement payment rights in contravention of any law or to imply

that any transfer under a transfer agreement entered into prior to the

effective date of this act is valid or invalid.

F. Compliance with the requirements set forth in Section 3 of this act and

fulfillment of the conditions set forth in Section 4 of this act shall be

solely the responsibility of the transferee in any transfer of structured

settlement payment rights, and neither the structured settlement obligor nor

the annuity issuer shall bear any responsibility for, or any liability arising

from, noncompliance with such requirements or failure to fulfill such

conditions.

SECTION 8. NEW LAW A new section of law to be codified in the Oklahoma Statutes

as Section 3245 of Title 12, unless there is created a duplication in

numbering, reads as follows:

This act shall apply to any transfer of structured settlement payment rights

under a transfer agreement entered into on or after the thirtieth day after the

date of enactment of this act; provided that nothing contained herein shall

imply that any transfer under a transfer agreement reached prior to such date

is either effective or ineffective.

SECTION 9. This act shall become effective November 1, 2001.

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: Ohio Rev. Code §2323.58 et seq. (SB 260)

Enacted 7/27/2000

Effective 9/27/2000

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

§ 2323.58. Definitions
As used in this section and sections 2323.581 [2323.58.1] to 2323.587 [2323.58.7] of the Revised Code:
(A) "Annuity issuer" means an insurer that has issued an insurance contract that is used to fund periodic payments under a structured settlement.
(B) "Applicable law" means any of the following, as applicable in interpreting the terms of a structured settlement agreement:
(1) The laws of the United States;
(2) The laws of this state, including principles of equity that are applied in the courts of this state;
(3) The laws of any other jurisdiction if any of the following applies:
(a) The laws of that other jurisdiction govern the structured settlement.
(b) A court or a responsible administrative authority approved the structured settlement agreement under the laws of that other jurisdiction.
(c) The transfer of payments under the structured settlement is subject to the laws of that other jurisdiction.
(C) "Dependent" means a spouse of a payee, a minor child of a payee, or any other member of the family of a payee or other person whom, by law or by court order or decree, the payee is legally obligated to support.
(D) "Discounted present value" means the fair present value of the future payments under a structured settlement that is determined by discounting those payments to the present, using the most recently published applicable federal rate for determining the present value of an annuity as issued by the United States internal revenue service.
(E) "Independent professional advice" means the advice of an attorney, a certified public accountant, an actuary, or any other licensed professional adviser if all of the following apply:
(1) The payee has engaged the services of the licensed professional adviser to render advice concerning the legal and other implications of a transfer of structured settlement payment rights.
(2) The licensed professional adviser has signed a statement to the effect that the licensed professional adviser rendered advice to the payee concerning the legal and other implications of a transfer of structured settlement payment rights.
(3) The licensed professional adviser is not affiliated in any manner with, referred by, or compensated in any manner by the transferee of the structured settlement payment rights.
(4) The compensation of the licensed professional adviser is not affected by whether or not a transfer of structured settlement payment rights occurs.
(F) "Interested party" includes the payee with respect to a structured settlement, the annuity issuer, the structured settlement agreement obligor, and any other party that has continuing rights or obligations under the structured settlement agreement.
(G) "Payee" means an individual who is receiving periodic payments under a structured settlement agreement that are excludable from the individual's gross income under federal income taxation laws applicable to that individual and who proposes to make a transfer of the rights to receive those periodic payments.
(H) "Periodic payments" includes both continuing monthly or other periodic payments and scheduled future lump-sum payments under a structured settlement.
(I) "Qualified assignment agreement" means an agreement that provides for a qualified assignment, as defined in section 130 of the "Internal Revenue Code of 1986," 100 Stat. 2085, 26 U.S.C.A. 130(c), as amended, through an assignment of the liability under a structured settlement agreement to make periodic payments as damages, on account of personal injury or sickness.
(J) "Responsible administrative authority" means any government authority of another state vested by the law of that state with the original exclusive jurisdiction over the settled claim resolved by a structured settlement.
(K) "Settled claim" means the original tort claim resolved by a structured settlement.
(L) "Structured settlement" means an arrangement for periodic payments of damages for injury to a person that is established by a settlement or a court judgment in resolution of a tort claim.
(M) "Structured settlement agreement" means an agreement, judgment, stipulation, or release that embodies the terms of a structured settlement, including the rights of a payee to receive periodic payments.
(N) "Structured settlement obligor" means the party that has the obligation to make continuing periodic payments to the payee under a structured settlement agreement or a qualified assignment agreement.
(O) "Structured settlement payment rights" means the rights under a structured settlement agreement to receive periodic payments from a structured settlement obligor or an annuity issuer if either of the following applies:
(1) The payee, the structured settlement obligor, or the annuity issuer with respect to the structured settlement agreement is a resident of this state.
(2) The structured settlement agreement was approved by a court in this state.
(P) "Terms of a structured settlement" includes the terms of a structured settlement agreement, an insurance contract, a qualified assignment agreement, and any order or approval by a court, a responsible administrative authority, or other government authority authorizing or approving the structured settlement.
(Q) "Transfer" means a sale, assignment, pledge, hypothecation, or any other form of alienation or encumbrance of structured settlement payment rights made by a payee for consideration.
(R) "Transfer agreement" means an agreement that provides for the transfer of structured settlement payment rights from a payee to a transferee.
(S) "Transferee" means a party acquiring or proposing to acquire structured settlement payment rights through a transfer of those rights.

§ 2323.581. Requirements for valid transfer of structural settlement payment rights
No direct or indirect transfer of structured settlement payment rights shall be effective, and no structured settlement obligor or annuity issuer shall be required to make any payment directly or indirectly to a transferee of structured settlement payment rights, unless the transferee has provided the payee and other interested parties with the disclosures required by section 2323.582 [2323.58.2] of the Revised Code and the transfer has been approved in advance in a final order of a court of competent jurisdiction in accordance with sections 2323.583 [2323.58.3] and 2323.584 [2323.58.4] of the Revised Code.

§ 2323.582. Disclosure statement by transferee
Not less than ten days prior to the date on which a payee becomes obligated under a transfer agreement, the transferee shall provide to the payee a disclosure statement, in boldface type of the minimum size of fourteen points, setting forth all of the following:
(A) The amounts and due dates of the structured settlement payments that would be transferred under the transfer agreement;
(B) The aggregate amount of the payments described in division (A) of this section;
(C) The discounted present value of the payments described in division (A) of this section and the amount of the applicable federal rate used in determining the discounted present value;
(D) The gross amount payable to the payee in exchange for or as consideration for the transfer of the structured settlement payments described in division (A) of this section;
(E) An itemized listing of all brokers' commissions, service charges, application fees, processing fees, closing costs, filing fees, administrative fees, legal fees, notary fees, and other commissions, fees, costs, expenses, and charges payable by the payee or deductible from the gross amount otherwise payable to the payee as described in division (D) of this section;
(F) The net amount payable to the payee after deduction from the gross amount payable to the payee as described in division (D) of this section of all commissions, fees, costs, expenses, and charges described in division (E) of this section;
(G) The quotient, expressed as a percentage, obtained by dividing the net amount payable to the payee as described in division (F) of this section by the discounted present value of the payments described in division (C) of this section;
(H) The amount of any penalty and the aggregate amount of any liquidated damages, including penalties, payable by the payee in the event of any breach of the transfer agreement by the payee.

§ 2323.583. Court approval of transfer
A court of competent jurisdiction may approve a transfer of structured settlement payment rights only in a final order that is based on the express findings of the court, and the express findings shall include all of the following:
(A) The transferee has provided to the payee a disclosure statement that complies with section 2323.582 [2323.58.2] of the Revised Code, and the payee has confirmed the payee's receipt of the disclosure statement, as evidenced by the payee's notarized signature on a copy of the disclosure statement.
(B) (1) Except as provided in division (B)(2) of this section, the payee has established that the transfer is fair and reasonable and in the best interests of the payee and the payee's dependents.
(2) If, on the effective date of the transfer agreement, a federal hardship standard exists, the payee has established that the transfer meets that hardship standard.
(C) The payee has received independent professional advice regarding the legal and other implications of the transfer.
(D) If the transfer contravenes the terms of the structured settlement involved, all of the following have been complied with:
(1) Each dependent whom the payee is legally obligated to support by court order or decree, in a written approval and waiver, approves the transfer and waives the right to require that the structured settlement payments be made to the payee in accordance with the terms of the structured settlement.
(2) Any court or responsible administrative authority that previously approved the structured settlement, other than the court from which the approval of the transfer is sought under sections 2323.58 to 2323.585 [2323.58.5] of the Revised Code, has expressly approved the transfer in writing.
(3) The transferee has provided to the court in which the application for approval of the transfer was filed all of the signed original copies of the approvals required under divisions (D)(1) and (2) of this section.
(4) The transferee has furnished each interested party copies of the approvals required under divisions (D)(1) and (2) of this section.
(E) The transferee has given written notice of the transferee's name, address, and taxpayer identification number to the annuity issuer and the structured settlement obligor and has filed a copy of that notice with the court in which the application for approval of the transfer was filed.
(F) The transfer complies with all of the requirements of sections 2323.58 to 2323.585 of the Revised Code and does not contravene any applicable law.

§ 2323.584. Application for approval in advance of transfer
(A) A person shall file an application under sections 2323.58 to 2323.585 [2323.58.5] of the Revised Code for the approval in advance of a transfer of structured settlement payment rights in the Ohio court that approved the structured settlement agreement. If the structured settlement agreement was not approved by an Ohio court, a person shall file an application under sections 2323.58 to 2323.585 [2323.58.5] of the Revised Code for the approval in advance of a transfer of structured settlement payment rights in the probate division of the court of common pleas of the county in which the payee, the structured settlement obligor, or the annuity issuer resides.
(B) The following procedures shall apply to an application for the approval in advance by a court of a transfer of structured settlement payment rights under division (A) of this section:
(1) Upon the filing of the application, the court shall set a date and time for a hearing on the application and shall notify the transferee of the date, time, and place of the hearing.
(2) Not less than twenty days prior to the date set by the court for the hearing on an application filed pursuant to this section, the transferee shall file with the court and shall serve on the court or any responsible administrative authority that previously approved the structured settlement, on all interested parties, and on the annuity issuer and the structured settlement obligor, in the manner prescribed in the Rules of Civil Procedure for the service of process, a notice of the proposed transfer and the application for its approval in advance. The notice shall include all of the following:
(a) A copy of the application;
(b) A copy of the transfer agreement;
(c) A copy of the disclosure statement provided by the transferee pursuant to section 2323.582 [2323.58.2] of the Revised Code and signed by the payee pursuant to division (A) of section 2323.583 [2323.58.3] of the Revised Code;
(d) Notification of the date, time, and place of the hearing on the application;
(e) Notification that any interested party may support, oppose, or otherwise respond to the application, either in person or by counsel, by submitting to the court a written response containing the interested party's support of, opposition to, or comments on the application or by participating in the hearing;
(f) Notification of the manner of filing a written response to the application and the time within which the response is required to be filed in order for the court to consider it.
(3) Within fifteen days after receipt of the notice described in division (B)(2) of this section, any interested party who wishes to respond to the application shall file a written response with the court personally or by certified mail, return receipt requested.
(4) At the conclusion of the hearing on an application under this section, the court may grant or deny the approval of the transfer. The court shall enter its order accordingly. If the court grants the approval of the transfer, it shall include in its order all of the express findings specified in section 2323.583 [2323.58.3] of the Revised Code. If the court denies the approval of the transfer, it shall include in its order the reasons for the denial.
(5) An order of the court made under division (B)(4) of this section is a final and appealable order.

§ 2323.585. Immunity of payee; waivers prohibited; illegal transfers not validated
(A) No payee who proposes to make a transfer of structured settlement payment rights shall incur any penalty, forfeit any application fee or other payment, or otherwise incur any liability to the proposed transferee based on a failure of the transfer to comply with any of the requirements of sections 2323.581 [2323.58.1] to 2323.584 [2323.58.4] of the Revised Code.
(B) No provision of this section or section 2323.581 [2323.58.1], 2323.582 [2323.58.2], 2323.583 [2323.58.3], or 2323.584 [2323.58.4] of the Revised Code may be waived.
(C) No provision of this section or section 2323.581 [2323.58.1], 2323.582 [2323.58.2], 2323.583 [2323.58.3], or 2323.584 [2323.58.4] of the Revised Code authorizes any transfer of structured settlement payment rights in contravention of applicable law or gives effect to any transfer of structured settlement payment rights that is void under any applicable law.

§ 2323.586. Immunity of settlement obligor and annuity issuer
The structured settlement obligor and the annuity issuer under a transfer or transfer agreement are immune from liability based upon any claim by the payee, or any party, other than a transferee, claiming through the payee, as to any structured settlement payment rights or periodic payments that are the subject of the transfer or transfer agreement.

§ 2323.587. Application of consumer sales practices act
A violation of section 2323.581 [2323.58.1], 2323.582 [2323.58.2], 2323.583 [2323.58.3], 2323.584 [2323.58.4], 2323.585 [2323.58.5], or 2323.586 [2323.58.6] of the Revised Code is an unfair or deceptive act or practice in violation of section 1345.02 of the Revised Code.

LEXSEE 2009 BILL TEXT ND H.B. 1205
2009 ND H.B. 1205
NORTH DAKOTA 61ST LEGISLATIVE ASSEMBLY
HOUSE BILL 1205
SIXTY-FIRST LEGISLATIVE ASSEMBLY OF NORTH DAKOTA
IN REGULAR SESSION COMMENCING TUESDAY, JANUARY 6, 2009
HOUSE BILL NO. 1205
(REPRESENTATIVES KEISER, WALD)
(SENATOR KLEIN)
BILL TRACKING REPORT: 2009 Bill Tracking ND H.B. 1205
2009 Bill Text ND H.B. 1205
VERSION: Enacted
VERSION-DATE: March 24, 2009
SYNOPSIS: AN ACT to create and enact chapter 32-03.4 of the North Dakota Century Code, relating to the transfer of structured settlements; and to provide a penalty.

NOTICE: [A> UPPERCASE TEXT WITHIN THESE SYMBOLS IS ADDED
TEXT: BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA: SECTION 1. Chapter 32-03.4 of the North Dakota Century Code is created and enacted as follows: 32-03.4-01.  DEFINITIONS. FOR PURPOSES OF THIS CHAPTER: 
 1. "ANNUITY ISSUER" MEANS AN INSURER THAT HAS ISSUED A CONTRACT TO FUND PERIODIC PAYMENTS UNDER A STRUCTURED SETTLEMENT.
 2. "DEPENDENT" INCLUDES A PAYEE'S SPOUSE AND MINOR CHILDREN AND ALL OTHER PERSONS FOR WHOM THE PAYEE IS LEGALLY OBLIGATED TO PROVIDE SUPPORT, INCLUDING ALIMONY OR SUPPORT.
 3. "DISCOUNTED PRESENT VALUE" MEANS THE PRESENT VALUE OF FUTURE PAYMENTS DETERMINED BY DISCOUNTING THOSE PAYMENTS TO THE PRESENT USING THE MOST RECENTLY PUBLISHED APPLICABLE FEDERAL RATE FOR DETERMINING THE PRESENT VALUE OF AN ANNUITY, AS ISSUED BY THE UNITED STATES INTERNAL REVENUE SERVICE. 
 4. "GROSS ADVANCE AMOUNT" MEANS THE SUM PAYABLE TO THE PAYEE OR FOR THE PAYEE'S ACCOUNT AS CONSIDERATION FOR A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS BEFORE ANY REDUCTIONS FOR TRANSFER EXPENSES OR OTHER DEDUCTIONS TO BE MADE FROM SUCH CONSIDERATION.
 5. "INDEPENDENT PROFESSIONAL ADVICE" MEANS ADVICE OF AN ATTORNEY, CERTIFIED PUBLIC ACCOUNTANT, ACTUARY, OR OTHER LICENSED PROFESSIONAL ADVISER: 
. WHO IS ENGAGED BY A CLAIMANT OR PAYEE TO RENDER ADVICE CONCERNING THE LEGAL, TAX, AND FINANCIAL IMPLICATIONS OF A STRUCTURED SETTLEMENT OR A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS;
 B. WHO IS NOT IN ANY MANNER AFFILIATED WITH OR COMPENSATED BY THE DEFENDANT IN THE SETTLEMENT OR THE TRANSFEREE OF THE TRANSFER; AND
C. WHOSE COMPENSATION FOR RENDERING THE ADVICE IS NOT AFFECTED BY WHETHER A SETTLEMENT OR TRANSFER OCCURS OR DOES NOT OCCUR.
 6. "INTERESTED PARTY" MEANS, WITH RESPECT TO ANY STRUCTURED SETTLEMENT, THE PAYEE, ANY BENEFICIARY IRREVOCABLY DESIGNATED UNDER THE ANNUITY CONTRACT TO RECEIVE PAYMENTS FOLLOWING THE PAYEE'S DEATH, THE ANNUITY ISSUER, THE STRUCTURED SETTLEMENT OBLIGOR, AND ANY OTHER PARTY THAT HAS CONTINUING RIGHTS OR OBLIGATIONS UNDER THE STRUCTURED SETTLEMENT.
 7. "NET ADVANCE AMOUNT" MEANS THE GROSS ADVANCE AMOUNT LESS THE AGGREGATE AMOUNT OF THE ACTUAL AND ESTIMATED TRANSFER EXPENSES REQUIRED TO BE DISCLOSED UNDER SUBSECTION 5 OF SECTION 32-03.4-02.
8. "PAYEE" MEANS AN INDIVIDUAL WHO IS RECEIVING TAX-FREE PAYMENTS UNDER A STRUCTURED SETTLEMENT AND PROPOSES TO MAKE A TRANSFER OF PAYMENT RIGHTS UNDER THE STRUCTURED SETTLEMENT.
 9. "PERIODIC PAYMENTS" INCLUDES BOTH RECURRING PAYMENTS AND SCHEDULED FUTURE LUMP SUM PAYMENTS. 
>10. "QUALIFIED ASSIGNMENT AGREEMENT" MEANS AN AGREEMENT PROVIDING FOR A QUALIFIED ASSIGNMENT WITHIN THE MEANING OF SECTION 130 OF THE INTERNAL REVENUE CODE (26 U.S.C. 130), AS AMENDED. 
 11. "SETTLED CLAIM" MEANS THE ORIGINAL TORT CLAIM OR WORKERS' COMPENSATION CLAIM RESOLVED BY A STRUCTURED SETTLEMENT. 
 12. "STRUCTURED SETTLEMENT" MEANS AN ARRANGEMENT FOR PERIODIC PAYMENT OF DAMAGES FOR PERSONAL INJURIES OR SICKNESS ESTABLISHED BY SETTLEMENT OR JUDGMENT IN RESOLUTION OF A TORT CLAIM OR FOR PERIODIC PAYMENTS IN SETTLEMENT OF A WORKERS' COMPENSATION CLAIM. 
 13. "STRUCTURED SETTLEMENT AGREEMENT" MEANS THE AGREEMENT, JUDGMENT, STIPULATION, OR RELEASE EMBODYING THE TERMS OF A STRUCTURED SETTLEMENT. 
 14. "STRUCTURED SETTLEMENT OBLIGOR" MEANS, WITH RESPECT TO ANY STRUCTURED SETTLEMENT, THE PARTY THAT HAS THE CONTINUING OBLIGATION TO MAKE PERIODIC PAYMENTS TO THE PAYEE UNDER A STRUCTURED SETTLEMENT AGREEMENT OR A QUALIFIED ASSIGNMENT AGREEMENT. 
 15. "STRUCTURED SETTLEMENT PAYMENT RIGHTS" MEANS RIGHTS TO RECEIVE PERIODIC PAYMENTS UNDER A STRUCTURED SETTLEMENT, WHETHER FROM THE STRUCTURED SETTLEMENT OBLIGOR OR THE ANNUITY ISSUER, IF AT LEAST ONE OF THE FOLLOWING APPLIES: 
 A. THE PAYEE IS DOMICILED IN, OR THE DOMICILE OR PRINCIPAL PLACE OF BUSINESS OF THE STRUCTURED SETTLEMENT OBLIGOR OR THE ANNUITY ISSUER IS LOCATED IN, THIS STATE; 
 B. THE STRUCTURED SETTLEMENT AGREEMENT WAS APPROVED BY A COURT IN THIS STATE; OR 
 C. THE STRUCTURED SETTLEMENT AGREEMENT IS EXPRESSLY GOVERNED BY THE LAWS OF THIS STATE. 
 16. "TERMS OF THE STRUCTURED SETTLEMENT" INCLUDES, WITH RESPECT TO ANY STRUCTURED SETTLEMENT, THE TERMS OF THE STRUCTURED SETTLEMENT AGREEMENT, THE ANNUITY CONTRACT, ANY QUALIFIED ASSIGNMENT AGREEMENT AND ANY ORDER OR OTHER APPROVAL OF ANY COURT OR OTHER GOVERNMENTAL AUTHORITY THAT AUTHORIZED OR APPROVED SUCH STRUCTURED SETTLEMENT. 
 17. "TRANSFER" MEANS ANY SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION, OR OTHER ALIENATION OR ENCUMBRANCE OF STRUCTURED SETTLEMENT PAYMENT RIGHTS MADE BY A PAYEE FOR CONSIDERATION. THE TERM DOES NOT INCLUDE THE CREATION OR PERFECTION OF A SECURITY INTEREST IN STRUCTURED SETTLEMENT PAYMENT RIGHTS UNDER A BLANKET SECURITY AGREEMENT ENTERED WITH AN INSURED DEPOSITORY INSTITUTION, IN THE ABSENCE OF ANY ACTION TO REDIRECT THE STRUCTURED SETTLEMENT PAYMENTS TO THE INSURED DEPOSITORY INSTITUTION, OR AN AGENT OR SUCCESSOR IN INTEREST THEREOF, OR OTHERWISE TO ENFORCE THE BLANKET SECURITY INTEREST AGAINST THE STRUCTURED SETTLEMENT PAYMENT RIGHTS. 
 18. "TRANSFER AGREEMENT" MEANS THE AGREEMENT THAT PROVIDES FOR A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS. 
 19. "TRANSFER EXPENSES" MEANS ALL EXPENSES OF A TRANSFER WHICH ARE REQUIRED UNDER THE TRANSFER AGREEMENT TO BE PAID BY THE PAYEE OR DEDUCTED FROM THE GROSS ADVANCE AMOUNT, INCLUDING COURT FILING FEES, ATTORNEY'S FEES, ESCROW FEES, LIEN RECORDATION FEES, JUDGMENT AND LIEN SEARCH FEES, FINDER'S FEES, COMMISSIONS, AND OTHER PAYMENTS TO A BROKER OR OTHER INTERMEDIARY. THE TERM DOES NOT INCLUDE PREEXISTING OBLIGATIONS OF THE PAYEE PAYABLE FOR THE PAYEE'S ACCOUNT FROM THE PROCEEDS OF A TRANSFER. 
 20. "TRANSFEREE" MEANS A PARTY ACQUIRING OR PROPOSING TO ACQUIRE STRUCTURED SETTLEMENT PAYMENT RIGHTS THROUGH A TRANSFER. 
 32-03.4-02. REQUIRED DISCLOSURES TO PAYEE. AT LEAST THREE DAYS BEFORE THE DATE ON WHICH A PAYEE SIGNS A TRANSFER AGREEMENT, THE TRANSFEREE SHALL PROVIDE TO THE PAYEE A SEPARATE DISCLOSURE STATEMENT, IN BOLD AND IN AT LEAST FOURTEEN-POINT TYPE, SETTING FORTH: 
 1. THE AMOUNTS AND DUE DATES OF THE STRUCTURED SETTLEMENT PAYMENTS TO BE TRANSFERRED; 
2. THE AGGREGATE AMOUNT OF THE PAYMENTS; 
 3. THE DISCOUNTED PRESENT VALUE OF THE PAYMENTS TO BE TRANSFERRED, WHICH MUST BE IDENTIFIED AS THE "CALCULATION OF CURRENT VALUE OF THE TRANSFERRED STRUCTURED SETTLEMENT PAYMENTS UNDER FEDERAL STANDARDS FOR 'VALUING ANNUITIES'", AND THE AMOUNT OF THE APPLICABLE FEDERAL RATE USED IN CALCULATING THE DISCOUNTED PRESENT VALUE; 
 4. THE GROSS ADVANCE AMOUNT; 
5. AN ITEMIZED LIST OF ALL APPLICABLE TRANSFER EXPENSES, OTHER THAN ATTORNEY'S FEES AND RELATED DISBURSEMENTS, PAYABLE IN CONNECTION WITH THE TRANSFEREE'S APPLICATION FOR APPROVAL OF THE TRANSFER AND THE TRANSFEREE'S BEST ESTIMATE OF THE AMOUNT OF ANY SUCH FEES AND DISBURSEMENTS; 
 6. THE NET ADVANCE AMOUNT; 
 7. THE AMOUNT OF ANY PENALTIES OR LIQUIDATED DAMAGES PAYABLE BY THE PAYEE IN THE EVENT OF ANY BREACH OF THE TRANSFER AGREEMENT BY THE PAYEE; AND 
 8. A STATEMENT THAT THE PAYEE HAS THE RIGHT TO CANCEL THE TRANSFER AGREEMENT, WITHOUT PENALTY OR FURTHER OBLIGATION, NO LATER THAN THE THIRD BUSINESS DAY AFTER THE DATE THE AGREEMENT IS SIGNED BY THE PAYEE. 
 32-03.4-03. APPROVAL OF TRANSFERS OF STRUCTURED SETTLEMENT PAYMENT RIGHTS. A DIRECT OR INDIRECT TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS IS NOT EFFECTIVE AND A STRUCTURED SETTLEMENT OBLIGOR OR ANNUITY ISSUER MAY NOT BE REQUIRED TO MAKE ANY PAYMENT DIRECTLY OR INDIRECTLY TO ANY TRANSFEREE OF STRUCTURED SETTLEMENT PAYMENT RIGHTS UNLESS THE TRANSFER HAS BEEN APPROVED IN ADVANCE IN A FINAL COURT ORDER BASED ON THE FOLLOWING EXPRESS FINDINGS BY THE COURT: 
 1. THE TRANSFER IS IN THE BEST INTEREST OF THE PAYEE, TAKING INTO ACCOUNT THE WELFARE AND SUPPORT OF THE PAYEE'S DEPENDENTS AND WHETHER THE TRANSACTION, INCLUDING THE DISCOUNT RATE USED TO DETERMINE THE GROSS ADVANCE AMOUNT AND THE FEES AND EXPENSES USED TO DETERMINE THE NET ADVANCE AMOUNT, ARE FAIR AND REASONABLE. IF THE COURT MAKES THE FINDINGS AS OUTLINED IN THIS SUBSECTION, THERE IS NOT A REQUIREMENT FOR THE COURT TO FIND THAT AN APPLICANT IS SUFFERING FROM A HARDSHIP TO APPROVE THE TRANSFER OF STRUCTURED SETTLEMENT PAYMENTS UNDER THIS SUBSECTION; 
 2. THE PAYEE HAS BEEN ADVISED IN WRITING BY THE TRANSFEREE TO SEEK INDEPENDENT PROFESSIONAL ADVICE REGARDING THE TRANSFER AND HAS EITHER RECEIVED THAT ADVICE OR KNOWINGLY WAIVED THE ADVICE IN WRITING; AND 
3. THE TRANSFER DOES NOT CONTRAVENE ANY APPLICABLE STATUTE OR THE ORDER OF ANY COURT OR OTHER GOVERNMENTAL AUTHORITY. 
32-03.4-04. EFFECTS OF TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS. FOLLOWING A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS UNDER THIS CHAPTER: 
1. THE STRUCTURED SETTLEMENT OBLIGOR AND THE ANNUITY ISSUER ARE DISCHARGED AND RELEASED FROM ALL LIABILITY FOR THE TRANSFERRED PAYMENTS AS TO ALL PARTIES EXCEPT THE TRANSFEREE; 
 2. THE TRANSFEREE IS LIABLE TO THE STRUCTURED SETTLEMENT OBLIGOR AND THE ANNUITY ISSUER: 
 A. IF THE TRANSFER CONTRAVENES THE TERMS OF THE STRUCTURED SETTLEMENT, FOR ANY TAXES INCURRED BY THOSE PARTIES AS A CONSEQUENCE OF THE TRANSFER; AND 
 B. FOR ANY OTHER LIABILITIES OR COSTS, INCLUDING REASONABLE COSTS AND ATTORNEY'S FEES, ARISING FROM COMPLIANCE BY THOSE PARTIES WITH THE ORDER OF THE COURT OR ARISING AS A CONSEQUENCE OF THE TRANSFEREE'S FAILURE TO COMPLY WITH THIS CHAPTER; 
 3. NEITHER THE ANNUITY ISSUER NOR THE STRUCTURED SETTLEMENT OBLIGOR MAY BE REQUIRED TO DIVIDE ANY PERIODIC PAYMENT BETWEEN THE PAYEE AND ANY TRANSFEREE OR ASSIGNEE OR BETWEEN TWO OR MORE TRANSFEREES OR ASSIGNEES; AND 
 4. ANY FURTHER TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS BY THE PAYEE MAY BE MADE ONLY AFTER COMPLIANCE WITH ALL OF THE REQUIREMENTS OF THIS CHAPTER. 
32-03.4-05. PROCEDURE FOR APPROVAL OF TRANSFERS. 
 1. AN APPLICATION FOR APPROVAL OF A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS UNDER THIS CHAPTER MUST BE MADE BY THE TRANSFEREE AND MAY BE BROUGHT IN THE COUNTY IN WHICH THE PAYEE RESIDES, IN THE COUNTY IN WHICH THE STRUCTURED SETTLEMENT OBLIGOR OR THE ANNUITY ISSUER MAINTAINS ITS PRINCIPAL PLACE OF BUSINESS, OR IN ANY COURT THAT APPROVED THE STRUCTURED SETTLEMENT AGREEMENT. 
 2. AT LEAST TWENTY DAYS BEFORE THE SCHEDULED HEARING ON ANY APPLICATION FOR APPROVAL OF A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS UNDER SECTION 32-03.4-03, THE TRANSFEREE SHALL FILE WITH THE COURT AND SERVE ON ALL INTERESTED PARTIES A NOTICE OF THE PROPOSED TRANSFER AND THE APPLICATION FOR ITS AUTHORIZATION. THE NOTICE MUST INCLUDE: 
 A. A COPY OF THE TRANSFEREE'S APPLICATION; 
 B. A COPY OF THE TRANSFER AGREEMENT; 
 C. A COPY OF THE DISCLOSURE STATEMENT REQUIRED UNDER SECTION 32-03.4-02; 
 D. A LIST OF EACH OF THE PAYEE'S DEPENDENTS AND EACH DEPENDENT'S AGE; 
 E. NOTIFICATION THAT ANY INTERESTED PARTY IS ENTITLED TO SUPPORT, OPPOSE, OR OTHERWISE RESPOND TO THE TRANSFEREE'S APPLICATION, EITHER IN PERSON OR BY COUNSEL, BY SUBMITTING WRITTEN COMMENTS TO THE COURT OR BY PARTICIPATING IN THE HEARING; 
 F. NOTIFICATION OF THE TIME AND PLACE OF THE HEARING; AND 
 G. NOTIFICATION OF THE MANNER IN WHICH AND THE TIME BY WHICH WRITTEN RESPONSES TO THE APPLICATION MUST BE FILED IN ORDER TO BE CONSIDERED BY THE COURT, WHICH MAY BE NOT LESS THAN FIFTEEN DAYS AFTER SERVICE OF THE TRANSFEREE'S NOTICE. 
 32-03.4-06. NO WAIVER BY PAYEE. THE REQUIREMENTS OF THIS CHAPTER MAY NOT BE WAIVED BY ANY PAYEE. 
 32-03.4-07. DISPUTES DECIDED UNDER STATE LAW. ANY TRANSFER AGREEMENT ENTERED ON OR AFTER THE EFFECTIVE DATE OF THIS CHAPTER BY A PAYEE WHO RESIDES IN THIS STATE MUST PROVIDE THAT DISPUTES UNDER THE TRANSFER AGREEMENT, INCLUDING ANY CLAIM THAT THE PAYEE HAS BREACHED THE AGREEMENT, MUST BE DETERMINED IN AND UNDER THE LAWS OF THIS STATE. SUCH A TRANSFER AGREEMENT MAY NOT AUTHORIZE THE TRANSFEREE OR ANY OTHER PARTY TO CONFESS JUDGMENT OR CONSENT TO ENTRY OF JUDGMENT AGAINST THE PAYEE. 
 32-03.4-08. LIFE-CONTINGENT PAYMENTS NOT TO BE TRANSFERRED - EXCEPTION. A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS MAY NOT EXTEND TO ANY PAYMENTS THAT ARE LIFE-CONTINGENT UNLESS, BEFORE THE DATE ON WHICH THE PAYEE SIGNS THE TRANSFER AGREEMENT, THE TRANSFEREE HAS ESTABLISHED AND HAS AGREED TO MAINTAIN PROCEDURES REASONABLY SATISFACTORY TO THE ANNUITY ISSUER AND THE STRUCTURED SETTLEMENT OBLIGOR FOR PERIODICALLY CONFIRMING THE PAYEE'S SURVIVAL AND GIVING THE ANNUITY ISSUER AND THE STRUCTURED SETTLEMENT OBLIGOR PROMPT WRITTEN NOTICE IN THE EVENT OF THE PAYEE'S DEATH. 
 32-03.4-09. NO PAYEE LIABILITY FOR FAILURE TO COMPLY WITH CHAPTER. A PAYEE WHO PROPOSES TO MAKE A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS MAY NOT INCUR ANY PENALTY, FORFEIT ANY APPLICATION FEE OR OTHER PAYMENT, OR OTHERWISE INCUR ANY LIABILITY TO THE PROPOSED TRANSFEREE OR ANY ASSIGNEE BASED ON ANY FAILURE OF THE TRANSFER TO SATISFY THE CONDITIONS OF THIS CHAPTER.
 32-03.4-10. EFFECT OF CHAPTER ON EXISTING LAWS AND TRANSFER AGREEMENTS. THIS CHAPTER DOES NOT AUTHORIZE ANY TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS IN CONTRAVENTION OF ANY LAW NOR DOES THIS CHAPTER IMPLY THAT ANY TRANSFER UNDER A TRANSFER AGREEMENT ENTERED BEFORE AUGUST 1, 2009, IS VALID OR INVALID. <a]
 32-03.4-11. TRANSFEREE SOLELY RESPONSIBLE FOR CERTAIN REQUIREMENTS. IN ANY TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS, COMPLIANCE WITH THE REQUIREMENTS OF SECTION 32-03.4-02 AND FULFILLMENT OF THE CONDITIONS OF SECTION 32-03.4-03 ARE THE SOLE RESPONSIBILITY OF THE TRANSFEREE. NEITHER THE STRUCTURED SETTLEMENT OBLIGOR NOR THE ANNUITY ISSUER BEARS ANY RESPONSIBILITY FOR, OR ANY LIABILITY ARISING FROM, NONCOMPLIANCE WITH THOSE REQUIREMENTS OR FAILURE TO FULFILL THOSE CONDITIONS. <a]
 32-03.4-12. PENALTY. ANY TRANSFEREE THAT WILLFULLY VIOLATES THIS CHAPTER IS GUILTY OF AN INFRACTION. A SECOND OR SUBSEQUENT VIOLATION OF THIS CHAPTER IS A CLASS B MISDEMEANOR.
 32-03.4-13. APPLICABILITY OF CHAPTER. THIS CHAPTER APPLIES TO ANY TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS UNDER A TRANSFER AGREEMENT ENTERED AFTER JULY 31, 2009. THIS CHAPTER DOES NOT IMPLY THAT ANY TRANSFER UNDER A TRANSFER AGREEMENT REACHED BEFORE AUGUST 1, 2009, IS EITHER EFFECTIVE OR INEFFECTIVE.<a]

SPONSOR: Keiser

SUBJECT: LEGISLATIVE BODIES (92%); LITIGATION (92%); LEGISLATORS (92%); TAXES & TAXATION (90%); SETTLEMENT & COMPROMISE (82%); US FEDERAL GOVERNMENT (62%); LEGISLATION (62%); INSURANCE CLAIMS (62%); ANNUITIES (62%);

LOAD-DATE: March 26, 2009

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: General Statutes 1-543.10 et seq. (SB 746)

Enacted 8/4/1999

Effective 10/1/1999

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

§ 1-543.10. Title
This Article may be cited as the North Carolina Structured Settlement Protection Act.

§ 1-543.11. Definitions
For purposes of this Article:
(1) "Annuity issuer" means an insurer that has issued an annuity or insurance contract used to fund periodic payments under a structured settlement;
(2) "Discounted present value" means the fair present value of future payments, as determined by discounting such payments to the present utilizing the tables adopted in Article 5 of Chapter 8 of the General Statutes;
(3) "Independent professional advice" means advice of an attorney, certified public accountant, actuary, or other licensed or registered professional or financial adviser:
a. Who is engaged by a payee to render advice concerning the legal, tax, and financial implications of a transfer of structured settlement payment rights;
b. Who is not in any manner affiliated with or compensated by the transferee of such transfer; and
c. Whose compensation for rendering such advice is not affected by whether a transfer occurs or does not occur;
(4) "Interested parties" means, with respect to any structured settlement, the payee, any beneficiary designated under the annuity contract to receive payments following the payee's death, the annuity issuer, the structured settlement obligor, and any other party that has continuing rights or obligations under the terms of the structured settlement;
(5) "Payee" means an individual who is receiving tax-free damage payments under a structured settlement and proposes to make a transfer of payment rights thereunder;
(6) "Qualified assignment agreement" means an agreement providing for a qualified assignment within the meaning of section 130 of the Internal Revenue Code, United States Code Title 26, as amended from time to time;
(7) "Responsible administrative authority" means, with respect to a structured settlement, any government authority vested by law with exclusive jurisdiction over the settled claim resolved by such structured settlement;
(8) "Settled claim" means the original tort claim resolved by a structured settlement;
(9) "Structured settlement" means an arrangement for periodic payment of damages for personal injuries established by settlement or judgment in resolution of a tort claim;
(10) "Structured settlement agreement" means the agreement, judgment, stipulation, or release embodying the terms of a structured settlement, including the rights of the payee to receive periodic payments;
(11) "Structured settlement obligor" means, with respect to any structured settlement, the party that has the continuing periodic payment obligation to the payee under a structured settlement agreement or a qualified assignment agreement;
(12) "Structured settlement payment rights" means rights to receive periodic payments (including lump-sum payments) under a structured settlement, whether from the settlement obligor or the annuity issuer, where:
a. The payee is domiciled in this State;
b. The structured settlement agreement was approved by a court or responsible administrative authority in this State; or
c. The settled claim was pending before the courts of this State when the parties entered into the structured settlement agreement;
(13) "Terms of the structured settlement" include, with respect to any structured settlement, the terms of the structured settlement agreement, the annuity contract, any qualified assignment agreement, and any order or approval of any court or responsible administrative authority or other government authority authorizing or approving such structured settlement; and
(14) "Transfer" means any sale, assignment, pledge, hypothecation, or other form of alienation or encumbrance made by a payee for consideration;
(15) "Transfer agreement" means the agreement providing for transfer of structured settlement payment rights from a payee to a transferee.

§ 1-543.12. Structured settlement payment rights
No direct or indirect transfer of structured settlement payment rights shall be effective, and no structured settlement obligor or annuity issuer shall be required to make any payment directly or indirectly to any transferee of structured settlement payment rights unless the transfer has been authorized in advance in a final order of a court of competent jurisdiction or a responsible administrative authority based on express findings by such court or responsible administrative authority that:
(1) The transfer complies with the requirements of this Article [of] law;
(2) Not less than 10 days prior to the date on which the payee first incurred any obligation with respect to the transfer, the transferee has provided to the payee a disclosure statement in bold type, no smaller than 14 point setting forth:
a. The amounts and due dates of the structured settlement payments to be transferred;
b. The aggregate amount of such payments;
c. The discounted present value of such payments;
d. The gross amount payable to the payee in exchange for such payments;
e. An itemized listing of all brokers' commissions, service charges, application fees, processing fees, closing costs, filing fees, administrative fees, legal fees, notary fees and other commissions, fees, costs, expenses, and charges payable by the payee or deductible from the gross amount otherwise payable to the payee;
f. The net amount payable to the payee after deduction of all commissions, fees, costs, expenses, and charges described in sub-subdivision e. of this subdivision;
g. The quotient (expressed as a percentage) obtained by dividing the net payment amount by the discounted present value of the payments;
h. The discount rate used by the transferee to determine the net amount payable to the payee for the structured settlement payments to be transferred; and
i. The amount of any penalty and the aggregate amount of any liquidated damages (inclusive of penalties) payable by the payee in the event of any breach of the transfer agreement by the payee;
(3) The transfer is in the best interest of the payee;
(4) The payee has received independent professional advice regarding the legal, tax, and financial implications of the transfer;
(5) The transferee has given written notice of the transferee's name, address, and taxpayer identification number to the annuity issuer and the structured settlement obligor and has filed a copy of such notice with the court or responsible administrative authority;
(6) The discount rate used in determining the net amount payable to the payee, as provided in subdivision (2) of this section, does not exceed an annual percentage rate of prime plus five percentage points calculated as if the net amount payable to the payee, as provided in sub-subdivision (2)f. of this section, was the principal of a consumer loan made by the transferee to the payee, and if the structured settlement payments to be transferred to the transferee were the payee's payments of principal plus interest on such loan. For purposes of this subdivision, the prime rate shall be as reported by the Federal Reserve Statistical Release H.15 on the first Monday of the month in which the transfer agreement is signed by both the payee and the transferee, except when the transfer agreement is signed prior to the first Monday of that month then the prime rate shall be as reported by the Federal Reserve Statistical Release H.15 on the first Monday of the preceding month;
(7) Any brokers' commissions, service charges, application fees, processing fees, closing costs, filing fees, administrative fees, notary fees and other commissions, fees, costs, expenses, and charges payable by the payee or deductible from the gross amount otherwise payable to the payee do not exceed two percent (2%) of the net amount payable to the payee;
(8) The transfer of structured settlement payment rights is fair and reasonable; and
(9) Notwithstanding a provision of the structured settlement agreement prohibiting an assignment by the payee, the court may order a transfer of periodic payment rights provided that the court finds that the provisions of this Article are satisfied.
If the court or responsible administrative authority authorizes the transfer pursuant to this section, the court or responsible administrative authority shall order the structured settlement obligor to execute an acknowledgment of assignment letter on behalf of the transferee for the amount of the structured settlement payment rights to be transferred; provided, however, structured settlement payment rights arising from a claim pursuant to Chapter 97 shall not be authorized.

§ 1-543.13. Jurisdiction
(a) Where the structured settlement agreement was entered into after commencement of litigation or administrative proceedings in this State, the court or administrative agency where the action was pending shall have exclusive jurisdiction over any application for authorization under this Article of a transfer of structured settlement payment rights.
(b) Where the structured settlement agreement was entered into prior to the commencement of litigation or administrative proceedings, or after the commencement of litigation outside this State, the Superior Court Division of the General Court of Justice shall have nonexclusive original jurisdiction over any application for authorization under this Article of a transfer of structured settlement payment rights.

§ 1-543.14. Procedure for approval of transfers
(a) Where the structured settlement agreement was entered into after the commencement of litigation or administrative proceedings in this State, the application for authorization of a transfer of structured settlement rights shall be filed with the court or administrative agency where the settled claim was pending as a motion in the cause.
(b) Where the structured settlement agreement was entered into prior to the commencement of litigation or administrative proceedings, or after the commencement of litigation or administrative proceedings outside this State, the application for authorization of a transfer of structured settlement payment rights shall be filed in the superior court with proper venue pursuant to Article 7 of this Chapter. The nature of the action shall be a special proceeding governed by the provisions of Article 33 of this Chapter.
(c) Not less than 30 days prior to the scheduled hearing on any application for authorization of a transfer of structured settlement payment rights under this Article, the transferee shall file with the proper court or responsible administrative authority and serve on any other government authority which previously approved the structured settlement, on all interested parties as defined in G.S. 1-543.11(4), and on the Attorney General, a notice of the proposed transfer and the application for its authorization, including in such notice:
(1) A copy of the transferee's application;
(2) A copy of the transfer agreement;
(3) A copy of the disclosure statement required under G.S. 1-543.12(a)(2);
(4) Notification that any interested party is entitled to support, oppose, or otherwise respond to the transferee's application, either in person or by counsel, by submitting written comments to the court or responsible administrative authority or by participating in the hearing; and
(5) Notification of the time and place of the hearing and notification of the manner in which and the time by which written responses to the application must be filed in order to be considered by the court or responsible administrative authority.
(d) The Attorney General shall have standing to raise, appear, and be heard on any matter relating to an application for authorization of a transfer of structured settlement payment rights under this Article.

§ 1-543.15. No waiver; penalties
(a) The provisions of this Article may not be waived.
(b) Any payee who has transferred structured settlement payment rights to a transferee without complying with this Article may bring an action against the transferee to recover actual monetary loss or for damages up to five thousand dollars ($ 5,000) for the violation by the transferee, or bring actions for both. The payee is entitled to attorneys' fees and costs incurred to enforce this Article. In addition, all unpaid structured settlement payment rights transferred in violation of this Article by any transferee shall be reconveyed to the payee.
(c) No payee who proposes to make a transfer of structured settlement payment rights shall incur any penalty, forfeit any application fee or other payment, or otherwise incur any liability to the proposed transferee based on any failure of such transfer to satisfy the conditions of this Article.

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: NY CLS Gen Oblig § 5-1701 (NY A.B. 6936)

Enacted 9/17/2002

Effective 7/1/2002, Amended 9/21/2004

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

A11677 Memo:

TITLE OF BILL: An act to amend the general obligations law, in relation to the transfer of structured settlement payments

PURPOSE OR GENERAL IDEA OF BILL: Confirms that a showing of "hardship" is not required in court`s review of proposed structured settlement transfers.

SUMMARY OF SPECIFIC PROVISIONS: The bill amends subdivision (b) of section 5-1706 of the General Obligations Law to confirm that a showing of "hardship" is not required in court`s review of proposed structured settlement transfers.

JUSTIFICATION: Prior to 2002, tort claims could be settled with a promise of payment over time (a "structured settlement"), without requiring disclosure to the payee of the then present value of the promised payments. Additionally, prior to 2002, consumers receiving settlement payments could sell some or all their future payments in exchange for up front cash, without prior court approval and without knowing the discount rate used by the purchaser in calculating the exchange. In 2002, to better ensure that consumers were making informed decisions about their structured settlements, the legislature passed the Structured Settlement Protection Act. The 2002 Act requires: (1) that the then present value of a promise of future payments be disclosed to tort claimants as a pre-condition to establishing any structured settlement and (2) requires that certain rate disclosures, admonitions to consult with counsel, and cancellation rights be provided and that court approval be obtained as a pre-condition to any subsequent transfer of structured settlement payment rights.

The law went into effect in February of 2`003, Since then, courts reviewing proposed structured settlement transfers have applied varying (and sometimes inconsistent) standards reflecting some possible confusion regarding the legislature`s intent in enacting the law in 2002. It is believed that some of the confusion and inconsistency in application of the 2002 may stem from certain inaccuracies in the Bill Memo that accompanied the 2002 Act.

The Structured Settlement Protection Act, as enacted, was the product of a three-year legislative discussion. As originally introduced, the legislation did not require that the then present value of a promise of future payments be disclosed to tort claimants as a precondition to establishing any structured settlement. Moreover, as originally introduced, the legislation barred transfers of structured settlement payment rights absent a court finding that the transfer was necessary to avoid "imminent financial hardship." After discussion and deliberation, the "hardship" requirement was eliminated as a precondition to transfers and the requirement that disclosures be made "at the front end" was added. As sometimes happens at the end of session, the bill memo drafted to accompany the original legislative proposal was renumbered and attached to the final legislation without revision to reflect the significant and substantive differences between the original proposal and the final bill as enacted. Thus, while the law as enacted into statute did not require a funding of "hardship," the bill memo accompanying the Act contained the vestigial (and erroneous) assertion that the bill was intended to require a showing of hardship.

Since enactment, several courts have cited the bill memorandum (and its erroneous and vestigial suggestion that transfer approvals be restricted to exceptional instances of "hardship") in denying transfers of payment rights sought by consumers. In fact, the Legislature neither intended nor required any such thing. As spelled out in the text of the statute, the Legislature intended that consumers receiving structured settlement payments receive clear and standardized disclosures about the terms of any transaction in which they would trade their right to future payments for upfront cash, that consumers be advised to consult with independent counsel about any such transaction, and that consumers be afforded ample opportunity to cancel any agreement to sell or trade aware their rights. An adult who has not been adjudicated incompetent or incapable of handling his or her own affairs is generally capable of determining what is in their own best interests with regard to their property and affairs, including their structured settlement payment rights, without having to demonstrate or prove "hardship," provided the consumer has been afforded the admonitions to consult with counsel, the rights of cancellation, and the disclosures required by the 2002 Act.

This Act is intended to confirm those principles and eliminate the confusion stemming from language in the 2002 Bill Memo.

FISCAL IMPACT: None

EFFECTIVE DATE: Immediately


THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

Section 1. Section 5-1705 of the general obligations law, as added by chapter 537 of the laws of 2002, is amended to read as follows:

S 5-1705. Procedure for approval of transfers.

  • (a) An action for approval of a transfer of a structured settlement shall be by a special proceeding BROUGHT ON ONLY BY ORDER TO SHOW CAUSE.
  • (b) Such proceeding shall be commenced to obtain approval of a transfer of structured settlement payment rights. Such proceeding shall be commenced:
    • (i) in the supreme court of the county in which the payee resides; or
    • (ii) in any court which approved the structured settlement agreement.
  • (c) A copy of the [notice of petition and petition or] order to show cause and petition shall be served upon all interested parties at least twenty days before the time at which the petition is noticed to be heard. A response shall be served at least seven days before the petition is noticed to be heard.
  • (d) A petition for approval of a transfer of structured settlement payment rights shall include:
    • (i) a copy of the transfer agreement;
    • (ii) a copy of the disclosure statement and proof of notice of that statement required under section 5-1703 of this title; [and]
    • (iii) a listing of each of the payee's dependents, together with each dependent's age; AND
    • (IV) A STATEMENT SETTING FORTH WHETHER THERE HAVE BEEN ANY PREVIOUS TRANSFERS OR APPLICATIONS FOR TRANSFER OF THE STRUCTURED SETTLEMENT

EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted.

LBD10104-02-9 S. 3681 2

PAYMENT RIGHTS AND GIVING DETAILS OF ALL SUCH TRANSFERS OR APPLICATIONS FOR TRANSFER.

(E) ON THE HEARING, THE PAYEE SHALL ATTEND BEFORE THE COURT UNLESS ATTENDANCE IS EXCUSED FOR GOOD CAUSE.

S 2. This act shall take effect on the first of January next succeeding the date on which it shall have become a law.


AN ACT to amend the general obligations law, in relation to the transfer of structured settlement payments

THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

Section 1. Subdivision (b) of section 5-1706 of the general obligations law, as added by chapter 537 of the laws of 2002, is amended to read as follows:

(b) the transfer is in the best interest of the payee, taking into account the welfare and support of the payee`s dependants; and whether the transaction, including the discount rate used to determine the gross advance amount and the fees and expenses used to determine the net advance amount, are fair and reasonable. PROVIDED THE COURT MAKES THE FINDINGS AS OUTLINED IN THIS SUBDIVISION, THERE IS NO REQUIREMENT FOR THE COURT TO FIND THAT AN APPLICANT IS SUFFERING FROM A HARDSHIP TO APPROVE THE TRANSFER OF STRUCTURED SETTLEMENT PAYMENTS UNDER THIS SUBDIVISION;

S 2. This act shall take effect immediately.


THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

Section 1. Short title. This act shall be known and may be cited as the

"structured settlement protection act".

Section 2. Article 5 of the general obligations law is amended by adding a new

title 17 to read as follows: TITLE 17 STRUCTURED SETTLEMENT PROTECTION ACT

SECTION 5-1701. DEFINITIONS.

5-1702. INITIAL DISCLOSURE OF STRUCTURED SETTLEMENT TERMS.

5-1703. REQUIRED DISCLOSURES TO PAYEE.

5-1704. PROVISIONS PROHIBITED IN TRANSFER AGREEMENT.

5-1705. PROCEDURE FOR APPROVAL OF TRANSFERS.

5-1706. APPROVAL OF TRANSFERS OF STRUCTURED SETTLEMENT PAYMENT RIGHTS.

5-1707. EFFECTS OF TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS.

5-1708. GENERAL PROVISIONS; CONSTRUCTION.

5-1709. ENFORCEMENT.

SECTION 5-1701. DEFINITIONS. FOR PURPOSES OF THIS TITLE:

(A) "ANNUITY ISSUER" MEANS AN INSURER THAT HAS ISSUED AN INSURANCE CONTRACT USED TO FUND PERIODIC PAYMENTS UNDER A STRUCTURED SETTLEMENT;

(B) "DEPENDENTS" INCLUDE A PAYEE'S SPOUSE AND MINOR CHILDREN AND ALL OTHER PERSONS FOR WHOM THE PAYEE IS LEGALLY OBLIGATED TO PROVIDE SUPPORT, INCLUDING

ALIMONY OR MAINTENANCE;

(C) "DISCOUNTED PRESENT VALUE" MEANS THE PRESENT VALUE OF FUTURE PAYMENTS, AS DETERMINED BY DISCOUNTING SUCH PAYMENTS TO THE PRESENT USING THE MOST RECENTLY PUBLISHED APPLICABLE FEDERAL RATE FOR DETERMINING THE PRESENT VALUE OF AN ANNUITY, AS ISSUED BY THE UNITED STATES INTERNAL REVENUE SERVICE;

(D) "GROSS ADVANCE AMOUNT" MEANS THE SUM PAYABLE TO THE PAYEE OR FOR THE PAYEE'S ACCOUNT AS CONSIDERATION FOR A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS BEFORE ANY REDUCTIONS FOR TRANSFER EXPENSES OR OTHER DEDUCTIONS TO BE MADE FROM SUCH CONSIDERATION;

(E) "INDEPENDENT PROFESSIONAL ADVICE" MEANS ADVICE OF AN ATTORNEY, CERTIFIED PUBLIC ACCOUNTANT, ACTUARY OR OTHER LICENSED PROFESSIONAL ADVISER:

(I) WHO IS ENGAGED BY A CLAIMANT OR PAYEE TO RENDER ADVICE CONCERNING THE LEGAL, TAX AND FINANCIAL IMPLICATIONS OF A STRUCTURED SETTLEMENT OR A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS;

(II) WHO IS NOT IN ANY MANNER AFFILIATED WITH OR COMPENSATED BY THE DEFENDANT IN SUCH SETTLEMENT OR THE TRANSFEREE OF SUCH TRANSFER; AND

(III) WHOSE COMPENSATION FOR RENDERING SUCH ADVICE IS NOT AFFECTED BY WHETHER A SETTLEMENT OR TRANSFER OCCURS OR DOES NOT OCCUR;

(F) "INTERESTED PARTIES" MEANS, WITH RESPECT TO ANY STRUCTURED SETTLEMENT, THE PAYEE, ANY BENEFICIARY IRREVOCABLY DESIGNATED UNDER THE ANNUITY CONTRACT TO RECEIVE PAYMENTS FOLLOWING THE PAYEE'S DEATH, THE ANNUITY ISSUER, THE

STRUCTURED SETTLEMENT OBLIGOR, AND ANY OTHER PARTY THAT HAS CONTINUING RIGHTS

OR OBLIGATIONS UNDER SUCH STRUCTURED SETTLEMENT;

(G) "NET ADVANCE AMOUNT" MEANS THE GROSS ADVANCE AMOUNT LESS THE AGGREGATE

AMOUNT OF THE EXPENSES REQUIRED TO BE DISCLOSED UNDER SUBDIVISION (F) OF

SECTION 5-1703 OF THIS TITLE;

(H) "PAYEE" MEANS AN INDIVIDUAL WHO IS RECEIVING TAX FREE PAYMENTS UNDER A

STRUCTURED SETTLEMENT AND PROPOSES TO MAKE A TRANSFER OF PAYMENT RIGHTS

THEREUNDER;

(I) "PERIODIC PAYMENTS" INCLUDES BOTH RECURRING PAYMENTS AND SCHEDULED FUTURE

LUMP SUM PAYMENTS;

(J) "QUALIFIED ASSIGNMENT AGREEMENT" MEANS AN AGREEMENT PROVIDING FOR A

QUALIFIED ASSIGNMENT WITHIN THE MEANING OF SECTION 130 OF THE UNITED STATES

INTERNAL REVENUE CODE, UNITED STATES CODE TITLE 26, AS AMENDED FROM TIME TO

TIME;

(K) "SETTLED CLAIM" MEANS THE ORIGINAL TORT CLAIM RESOLVED BY A STRUCTURED

SETTLEMENT;

(L) "STRUCTURED SETTLEMENT" MEANS AN ARRANGEMENT FOR PERIODIC PAYMENT OF

DAMAGES FOR PERSONAL INJURIES OR SICKNESS ESTABLISHED BY SETTLEMENT OR JUDGMENT

IN RESOLUTION OF A TORT CLAIM;

(M) "STRUCTURED SETTLEMENT AGREEMENT" MEANS THE AGREEMENT, JUDGMENT,

STIPULATION, OR RELEASE EMBODYING THE TERMS OF A STRUCTURED SETTLEMENT;

(N) "STRUCTURED SETTLEMENT OBLIGOR" MEANS, WITH RESPECT TO ANY STRUCTURED

SETTLEMENT, THE PARTY THAT HAS THE CONTINUING OBLIGATION TO MAKE PERIODIC

PAYMENTS TO THE PAYEE UNDER A STRUCTURED SETTLEMENT AGREEMENT OR A QUALIFIED

ASSIGNMENT AGREEMENT;

(O) "STRUCTURED SETTLEMENT PAYMENT RIGHTS" MEANS RIGHTS TO RECEIVE PERIODIC

PAYMENTS UNDER A STRUCTURED SETTLEMENT, WHETHER FROM THE STRUCTURED SETTLEMENT

OBLIGOR OR THE ANNUITY ISSUER, WHERE:

(I) THE PAYEE IS DOMICILED IN, OR THE DOMICILE OR PRINCIPAL PLACE OF BUSINESS

OF THE STRUCTURED SETTLEMENT OBLIGOR OR THE ANNUITY ISSUER IS LOCATED IN, THIS

STATE;

(II) THE STRUCTURED SETTLEMENT AGREEMENT WAS APPROVED BY A COURT IN THIS

STATE; OR

(III) THE STRUCTURED SETTLEMENT AGREEMENT IS EXPRESSLY GOVERNED BY THE LAWS OF

THIS STATE;

(P) "TERMS OF THE STRUCTURED SETTLEMENT" INCLUDE, WITH RESPECT TO ANY

STRUCTURED SETTLEMENT, THE TERMS OF THE STRUCTURED SETTLEMENT AGREEMENT, THE

ANNUITY CONTRACT, ANY QUALIFIED ASSIGNMENT AGREEMENT AND ANY ORDER OR APPROVAL

OF ANY COURT AUTHORIZING OR APPROVING SUCH STRUCTURED SETTLEMENT;

(Q) "TRANSFER MEANS ANY SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER

ALIENATION OR ENCUMBRANCE OF STRUCTURED SETTLEMENT PAYMENT RIGHTS MADE BY A

PAYEE FOR CONSIDERATION; PROVIDED THAT THE TERM "TRANSFER" DOES NOT INCLUDE THE

CREATION OR PERFECTION OF A SECURITY INTEREST IN STRUCTURED SETTLEMENT PAYMENT

RIGHTS UNDER A BLANKET SECURITY AGREEMENT ENTERED INTO WITH AN INSURED

DEPOSITORY INSTITUTION, IN THE ABSENCE OF ANY ACTION TO REDIRECT THE STRUCTURED

SETTLEMENT PAYMENTS TO SUCH INSURED DEPOSITORY INSTITUTION, OR AN AGENT OR

SUCCESSOR IN INTEREST THEREOF, OR OTHERWISE TO ENFORCE SUCH BLANKET SECURITY

INTEREST AGAINST THE STRUCTURED SETTLEMENT PAYMENT RIGHTS;

(R) "TRANSFER AGREEMENT" MEANS THE AGREEMENT PROVIDING FOR TRANSFER OF

STRUCTURED SETTLEMENT PAYMENT RIGHTS FROM A PAYEE TO A TRANSFEREE;

(S) "TRANSFER EXPENSES" MEANS ALL EXPENSES OF A TRANSFER THAT ARE REQUIRED

UNDER THE TRANSFER AGREEMENT TO BE PAID BY THE PAYEE OR DEDUCTED FROM THE GROSS

ADVANCE AMOUNT, INCLUDING, WITHOUT LIMITATION, COURT FILING FEES, ATTORNEYS

FEES, ESCROW FEES, LIEN RECORDATION FEES, JUDGMENT AND LIEN SEARCH FEES,

FINDERS' FEES, COMMISSIONS, AND OTHER PAYMENTS TO A BROKER OR OTHER

INTERMEDIARY; "TRANSFER EXPENSES" DO NOT INCLUDE PREEXISTING OBLIGATIONS OF THE

PAYEE PAYABLE FOR THE PAYEE'S ACCOUNT FROM THE PROCEEDS OF A TRANSFER; AND

(T) "TRANSFEREE" MEANS A PARTY ACQUIRING OR PROPOSING TO ACQUIRE STRUCTURED

SETTLEMENT PAYMENT RIGHTS THROUGH A TRANSFER OR RESTRUCTURING.

SECTION 5-1702. INITIAL DISCLOSURE OF STRUCTURED SETTLEMENT TERMS. IN

NEGOTIATING A STRUCTURED SETTLEMENT OF CLAIMS BROUGHT BY OR ON BEHALF OF A

CLAIMANT WHO IS DOMICILED IN THIS STATE, THE DEFENDANT OR DEFENDANT'S LEGAL

REPRESENTATIVE SHALL DISCLOSE IN WRITING TO THE CLAIMANT OR THE CLAIMANT'S

LEGAL REPRESENTATIVE ALL OF THE FOLLOWING INFORMATION THAT IS NOT OTHERWISE

SPECIFIED IN THE STRUCTURED SETTLEMENT AGREEMENT:

 

(A) THE AMOUNTS AND DUE DATES OF THE PERIODIC PAYMENTS TO BE MADE UNDER THE

STRUCTURED SETTLEMENT AGREEMENT. IN THE CASE OF PAYMENTS THAT WILL BE SUBJECT

TO PERIODIC PERCENTAGE INCREASES, THE AMOUNTS OF FUTURE PAYMENTS MAY BE

DISCLOSED BY IDENTIFYING THE BASE PAYMENT AMOUNT, THE AMOUNT AND TIMING OF

SCHEDULED INCREASES, AND THE MANNER IN WHICH INCREASES WILL BE COMPOUNDED;

(B) THE AMOUNT OF THE PREMIUM PAYABLE TO THE ANNUITY ISSUER;

(C) THE NATURE AND AMOUNT OF ANY COST THAT MAY BE DEDUCTED FROM ANY OF THE

PERIODIC PAYMENTS;

(D) WHERE APPLICABLE, THAT ANY TRANSFER OF THE PERIODIC PAYMENTS IS PROHIBITED

BY THE TERMS OF THE STRUCTURED SETTLEMENT AND MAY OTHERWISE BE PROHIBITED OR

RESTRICTED UNDER APPLICABLE LAW; AND

(E) A STATEMENT THAT THE CLAIMANT IS ADVISED TO OBTAIN INDEPENDENT

PROFESSIONAL ADVICE RELATING TO THE LEGAL, TAX AND FINANCIAL IMPLICATIONS OF

THE SETTLEMENT, INCLUDING ANY ADVERSE CONSEQUENCES AND THAT THE DEFENDANT OR

DEFENDANT'S LEGAL REPRESENTATIVE MAY NOT REFER ANY ADVISOR, ATTORNEY OR FIRM

FOR SUCH PURPOSE.

SECTION 5-1703. REQUIRED DISCLOSURES TO PAYEE. NOT LESS THAN TEN DAYS PRIOR TO

THE DATE ON WHICH THE PAYEE SIGNS A TRANSFER AGREEMENT, THE TRANSFEREE SHALL

PROVIDE TO THE PAYEE BY FIRST CLASS MAIL AND CERTIFIED MAIL, RETURN RECEIPT

REQUESTED OR UNITED STATES POSTAL SERVICE PRIORITY MAIL, A SEPARATE DISCLOSURE

STATEMENT, IN BOLD TYPE NO SMALLER THAN FOURTEEN POINTS, SETTING FORTH:

(A) THE AMOUNTS AND DUE DATES OF THE STRUCTURED SETTLEMENT PAYMENTS TO BE

TRANSFERRED;

(B) THE AGGREGATE AMOUNT OF SUCH PAYMENTS;

(C) THE DISCOUNTED PRESENT VALUE OF THE PAYMENTS TO BE TRANSFERRED, WHICH

SHALL BE IDENTIFIED AS THE "CALCULATION OF CURRENT VALUE OF THE TRANSFERRED

STRUCTURED SETTLEMENT PAYMENTS UNDER FEDERAL STANDARDS FOR VALUING ANNUITIES",

AND THE AMOUNT OF THE APPLICABLE FEDERAL RATE USED IN CALCULATING SUCH

DISCOUNTED PRESENT VALUE;

(D) THE PRICE QUOTE FROM THE ORIGINAL ANNUITY ISSUER OR, IF SUCH PRICE QUOTE

IS NOT READILY AVAILABLE FROM THE ORIGINAL ANNUITY ISSUER, THEN A PRICE QUOTE

FROM TWO OTHER ANNUITY ISSUERS THAT REFLECTS THE CURRENT COST OF PURCHASING A

COMPARABLE ANNUITY FOR THE AGGREGATE AMOUNT OF PAYMENTS TO BE TRANSFERRED;

(E) THE GROSS ADVANCE AMOUNT AND THE ANNUAL DISCOUNT RATE, COMPOUNDED MONTHLY,

USED TO DETERMINE SUCH FIGURE;

(F) AN ITEMIZED LISTING OF ALL COMMISSIONS, FEES, COSTS, EXPENSES AND CHARGES

PAYABLE BY THE PAYEE OR DEDUCTIBLE FROM THE GROSS AMOUNT OTHERWISE PAYABLE TO

THE PAYEE AND THE TOTAL AMOUNT OF SUCH FEES;

 

 

(G) THE NET ADVANCE AMOUNT INCLUDING THE STATEMENT: "THE NET CASH PAYMENT YOU

RECEIVE IN THIS TRANSACTION FROM THE BUYER WAS DETERMINED BY APPLYING THE

SPECIFIED DISCOUNT RATE TO THE AMOUNT OF FUTURE PAYMENTS RECEIVED BY THE BUYER,

LESS THE TOTAL AMOUNT OF COMMISSIONS, FEES, COSTS, EXPENSES AND CHARGES PAYABLE

BY YOU";

(H) THE AMOUNT OF ANY PENALTIES OR LIQUIDATED DAMAGES PAYABLE BY THE PAYEE IN

THE EVENT OF ANY BREACH OF THE TRANSFER AGREEMENT BY THE PAYEE; AND

(I) A STATEMENT THAT THE PAYEE HAS THE RIGHT TO CANCEL THE TRANSFER AGREEMENT,

WITHOUT PENALTY OR FURTHER OBLIGATION, NOT LATER THAN THE THIRD BUSINESS DAY

AFTER THE DATE THE AGREEMENT IS SIGNED BY THE PAYEE.

SECTION 5-1704. PROVISIONS PROHIBITED IN TRANSFER AGREEMENT. NO TRANSFER

AGREEMENT OR OTHER DOCUMENT OR AGREEMENT EXECUTED IN ASSOCIATION WITH THE

TRANSFER SHALL CONTAIN ANY PROVISION DESCRIBED IN THIS SECTION. TO THE EXTENT

THAT A PROHIBITED PROVISION IS INCLUDED IN A TRANSFER AGREEMENT SUCH PROVISION

SHALL BE VOID AND UNENFORCEABLE. A PROHIBITED PROVISION IS:

(A) ANY PROVISION THAT WAIVES THE PAYEE'S RIGHT TO SUE UNDER ANY LAW, OR

WHERE THE PAYEE AGREES NOT TO SUE, OR WHICH WAIVES JURISDICTION OR STANDING TO

SUE UNDER THE TRANSFER AGREEMENT;

(B) ANY PROVISION THAT REQUIRES THE PAYEE TO INDEMNIFY AND HOLD HARMLESS THE

TRANSFEREE, OR TO PAY THE TRANSFEREE'S COSTS OF DEFENSE, IN ANY CLAIM OR ACTION

BROUGHT BY THE PAYEE ON OR THE PAYEE'S BEHALF CONTESTING THE TRANSFER FOR ANY

REASON;

(C) ANY PROVISION THAT REQUIRES THE PAYEE TO PAY THE TRANSFEREE'S ATTORNEY'S

FEES OR COSTS IF THE TRANSFER CONTEMPLATED BY THE TRANSFER AGREEMENT IS NOT

COMPLETED; AND

(D) ANY PROVISION THAT REQUIRES THE PAYEE TO PAY ANY TAX LIABILITY ARISING

UNDER FEDERAL TAX LAWS, OTHER THAN THE SELLER'S OWN TAX LIABILITY, IF ANY, THAT

RESULTS FROM THE TRANSFER.

SECTION 5-1705. PROCEDURE FOR APPROVAL OF TRANSFERS. (A) AN ACTION FOR

APPROVAL OF A TRANSFER OF A STRUCTURED SETTLEMENT SHALL BE BY A SPECIAL

PROCEEDING.

(B) SUCH PROCEEDING SHALL BE COMMENCED TO OBTAIN APPROVAL OF A TRANSFER OF

STRUCTURED SETTLEMENT PAYMENT RIGHTS. SUCH PROCEEDING SHALL BE COMMENCED:

(I) IN THE SUPREME COURT OF THE COUNTY IN WHICH THE PAYEE RESIDES; OR

(II) IN ANY COURT WHICH APPROVED THE STRUCTURED SETTLEMENT AGREEMENT.

(C) A COPY OF THE NOTICE OF PETITION AND PETITION OR ORDER TO SHOW CAUSE AND

PETITION SHALL BE SERVED UPON ALL INTERESTED PARTIES AT LEAST TWENTY DAYS

BEFORE THE TIME AT WHICH THE PETITION IS NOTICED TO BE HEARD. A RESPONSE SHALL

BE SERVED AT LEAST SEVEN DAYS BEFORE THE PETITION IS NOTICED TO BE HEARD.

(D) A PETITION FOR APPROVAL OF A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT

RIGHTS SHALL INCLUDE:

(I) A COPY OF THE TRANSFER AGREEMENT;

(II) A COPY OF THE DISCLOSURE STATEMENT AND PROOF OF NOTICE OF THAT STATEMENT

REQUIRED UNDER SECTION 5-1703 OF THIS TITLE; AND

(III) A LISTING OF EACH OF THE PAYEE'S DEPENDENTS, TOGETHER WITH EACH

DEPENDENT'S AGE.

SECTION 5-1706. APPROVAL OF TRANSFERS OF STRUCTURED SETTLEMENT PAYMENT RIGHTS.

NO DIRECT OR INDIRECT TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS SHALL BE

EFFECTIVE AND NO STRUCTURED SETTLEMENT OBLIGOR OR ANNUITY ISSUER SHALL BE

REQUIRED TO MAKE ANY PAYMENT DIRECTLY OR INDIRECTLY TO ANY TRANSFEREE OF

STRUCTURED SETTLEMENT PAYMENT RIGHTS UNLESS THE TRANSFER HAS BEEN AUTHORIZED IN

ADVANCE IN A FINAL ORDER OF A COURT OF COMPETENT JURISDICTION BASED UPON

EXPRESS FINDINGS BY SUCH COURT THAT:

(A) THE TRANSFER COMPLIES WITH THE REQUIREMENTS OF THIS TITLE;

(B) THE TRANSFER IS IN THE BEST INTEREST OF THE PAYEE, TAKING INTO ACCOUNT THE

WELFARE AND SUPPORT OF THE PAYEE'S DEPENDANTS; AND WHETHER THE TRANSACTION,

INCLUDING THE DISCOUNT RATE USED TO DETERMINE THE GROSS ADVANCE AMOUNT AND THE

FEES AND EXPENSES USED TO DETERMINE THE NET ADVANCE AMOUNT, ARE FAIR AND

REASONABLE;

(C) THE PAYEE HAS BEEN ADVISED IN WRITING BY THE TRANSFEREE TO SEEK

INDEPENDENT PROFESSIONAL ADVICE REGARDING THE TRANSFER AND HAS EITHER RECEIVED

SUCH ADVICE OR KNOWINGLY WAIVED SUCH ADVICE IN WRITING;

(D) THE TRANSFER DOES NOT CONTRAVENE ANY APPLICABLE STATUTE OR THE ORDER OF

ANY COURT OR OTHER GOVERNMENT AUTHORITY; AND

(E) IS WRITTEN IN PLAIN LANGUAGE AND IN COMPLIANCE WITH SECTION 5-702 OF THIS

ARTICLE.

SECTION 5-1707. EFFECTS OF TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS.

FOLLOWING A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS UNDER THIS TITLE:

(A) THE STRUCTURED SETTLEMENT OBLIGOR AND THE ANNUITY ISSUER SHALL, AS TO ALL

PARTIES EXCEPT THE TRANSFEREE, BE DISCHARGED AND RELEASED FROM ANY AND ALL

LIABILITY FOR THE TRANSFERRED PAYMENTS;

(B) THE TRANSFEREE SHALL BE LIABLE TO THE STRUCTURED SETTLEMENT OBLIGOR AND

THE ANNUITY ISSUER:

(I) IF THE TRANSFER CONTRAVENES THE TERMS OF THE STRUCTURED SETTLEMENT, FOR

ANY TAXES INCURRED BY SUCH PARTIES AS A CONSEQUENCE OF THE TRANSFER; AND

(II) FOR ANY OTHER LIABILITIES OR COSTS, INCLUDING REASONABLE COSTS AND

ATTORNEYS' FEES, ARISING FROM COMPLIANCE BY SUCH PARTIES WITH THE ORDER OF THE

COURT OR ARISING AS A CONSEQUENCE OF THE TRANSFEREE'S FAILURE TO COMPLY WITH

THIS TITLE;

(C) NEITHER THE ANNUITY ISSUER NOR THE STRUCTURED SETTLEMENT OBLIGOR MAY BE

REQUIRED TO DIVIDE ANY PERIODIC PAYMENT BETWEEN THE PAYEE AND ANY TRANSFEREE OR

ASSIGNEE OR BETWEEN TWO OR MORE TRANSFEREES OR ASSIGNEES; AND

(D) ANY FURTHER TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS BY THE PAYEE

MAY BE MADE ONLY AFTER COMPLIANCE WITH ALL OF THE REQUIREMENTS OF THIS TITLE.

SECTION 5-1708. GENERAL PROVISIONS; CONSTRUCTION. (A) THE PROVISIONS OF THIS

TITLE MAY NOT BE WAIVED BY ANY PAYEE.

(B) ANY TRANSFER AGREEMENT ENTERED INTO ON OR AFTER THE EFFECTIVE DATE OF THIS

TITLE BY A PAYEE WHO RESIDES IN THIS STATE SHALL PROVIDE THAT DISPUTES UNDER

SUCH TRANSFER AGREEMENT, INCLUDING ANY CLAIM THAT THE PAYEE HAS BREACHED THE

AGREEMENT, SHALL BE DETERMINED IN AND UNDER THE LAWS OF THIS STATE. NO SUCH

TRANSFER AGREEMENT SHALL AUTHORIZE THE TRANSFEREE OR ANY OTHER PARTY TO CONFESS

JUDGMENT OR CONSENT TO ENTRY OF JUDGMENT AGAINST THE PAYEE.

(C) NO TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS SHALL EXTEND TO ANY

PAYMENTS THAT ARE LIFE-CONTINGENT UNLESS, PRIOR TO THE DATE ON WHICH THE PAYEE

SIGNS THE TRANSFER AGREEMENT, THE TRANSFEREE HAS ESTABLISHED AND HAS AGREED TO

MAINTAIN PROCEDURES REASONABLY SATISFACTORY TO THE ANNUITY ISSUER AND THE

STRUCTURED SETTLEMENT OBLIGOR FOR (I) PERIODICALLY CONFIRMING THE PAYEE'S

SURVIVAL, AND (II) GIVING THE ANNUITY ISSUER AND THE STRUCTURED SETTLEMENT

OBLIGOR PROMPT WRITTEN NOTICE IN THE EVEN OF THE PAYEE'S DEATH.

(D) NO PAYEE WHO PROPOSES TO MAKE A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT

RIGHTS SHALL INCUR ANY PENALTY, FORFEIT ANY APPLICATION FEE OR OTHER PAYMENT,

OR OTHERWISE INCUR ANY LIABILITY TO THE PROPOSED TRANSFEREE OR ANY ASSIGNEE

BASED ON ANY FAILURE OF SUCH TRANSFER TO SATISFY THE CONDITIONS OF THIS TITLE.

(E) NOTHING CONTAINED IN THIS TITLE SHALL BE CONSTRUED TO AUTHORIZE ANY

TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS IN CONTRAVENTION OF ANY

STATUTE OR TO IMPLY THAT ANY TRANSFER UNDER A TRANSFER AGREEMENT ENTERED INTO

PRIOR TO THE EFFECTIVE DATE OF THIS TITLE IS VALID OR INVALID.

(F) COMPLIANCE WITH THE REQUIREMENTS SET FORTH IN SECTION 5-1703 OF THIS TITLE

AND FULFILLMENT OF THE CONDITIONS SET FORTH IN SECTION 5-1705 OF THIS TITLE

SHALL BE SOLELY THE RESPONSIBILITY OF THE TRANSFEREE IN ANY TRANSFER OF

STRUCTURED SETTLEMENT PAYMENT RIGHTS, AND NEITHER THE STRUCTURED SETTLEMENT

OBLIGOR NOR THE ANNUITY ISSUER SHALL BEAR ANY RESPONSIBILITY FOR, OR ANY

LIABILITY ARISING FROM, NON-COMPLIANCE WITH SUCH REQUIREMENTS OR FAILURE TO

FULFILL SUCH CONDITIONS.

(G) THE ASSIGNEE OF ANY TRANSFER AGREEMENT OR ANY AGREEMENT EXECUTED IN

CONNECTION THEREWITH, SHALL BE SUBJECT TO ALL CLAIMS AND DEFENSES OF THE PAYEE

AGAINST THE TRANSFEREE ARISING FROM SUCH TRANSFER AGREEMENT NOTWITHSTANDING ANY AGREEMENT TO THE CONTRARY. RECOVERY HEREUNDER BY THE PAYEE SHALL NOT EXCEED THE AMOUNT OWING TO THE ASSIGNEE AT THE TIME THE CLAIM OR DEFENSE IS ASSERTED AGAINST THE ASSIGNEE. RIGHTS OF THE PAYEE UNDER THIS PROVISION CAN BE ASSERTED AFFIRMATIVELY AGAINST A CLAIM BY THE ASSIGNEE.

 

 

SECTION 5-1709. ENFORCEMENT. (A) IN ADDITION TO THE OTHER REMEDIES PROVIDED,

WHENEVER THERE SHALL BE A VIOLATION OF THIS TITLE, APPLICATION MAY BE MADE BY

THE ATTORNEY GENERAL IN THE NAME OF THE PEOPLE OF THE STATE OF NEW YORK TO A

COURT OF COMPETENT JURISDICTION BY A SPECIAL PROCEEDING TO ISSUE AN INJUNCTION,

AND UPON NOTICE TO THE DEFENDANT OF NOT LESS THAN FIVE DAYS, TO ENJOIN AND

RESTRAIN THE CONTINUANCE OF SUCH VIOLATIONS; AND IF IT SHALL APPEAR TO THE

SATISFACTION OF THE COURT OR JUSTICE THAT THE DEFENDANT HAS, IN FACT, VIOLATED

THIS TITLE, AN INJUNCTION MAY BE ISSUED BY SUCH COURT OR JUSTICE, ENJOINING AND

RESTRAINING ANY FURTHER VIOLATION, WITHOUT REQUIRING PROOF THAT ANY PERSON HAS,

IN FACT, BEEN INJURED OR DAMAGED THEREBY. IN ANY SUCH PROCEEDINGS, THE COURT

MAY MAKE ALLOWANCES TO THE ATTORNEY GENERAL AS PROVIDED IN PARAGRAPH SIX OF

SUBDIVISION (A) OF SECTION EIGHTY-THREE HUNDRED THREE OF THE CIVIL PRACTICE LAW

AND RULES, AND DIRECT RESTITUTION. WHENEVER THE COURT SHALL DETERMINE THAT A

VIOLATION OF THIS TITLE HAS OCCURRED, THE COURT MAY IMPOSE A CIVIL PENALTY OF

NOT MORE THAN ONE THOUSAND DOLLARS FOR EACH VIOLATION. IN CONNECTION WITH ANY

SUCH PROPOSED APPLICATION, THE ATTORNEY GENERAL IS AUTHORIZED TO TAKE PROOF AND

MAKE A DETERMINATION OF THE RELEVANT FACTS AND TO ISSUE SUBPOENAS IN ACCORDANCE

WITH THE CIVIL PRACTICE LAW AND RULES.

(B) ANY PAYEE INJURED BY A VIOLATION OF THIS TITLE MAY BRING AN ACTION FOR

THE RECOVERY OF DAMAGES. THE COURT MAY AWARD REASONABLE ATTORNEY'S FEES TO THE

PREVAILING PLAINTIFF.

Section 3. Subsection (d) of section 3212 of the insurance law is amended by

adding a new paragraph 4 to read as follows:

(4) THE BENEFITS, RIGHTS, PRIVILEGES OR OPTIONS ACCRUING UNDER AN ANNUITY

CONTRACT FUNDING A STRUCTURED SETTLEMENT WHICH WOULD OTHERWISE BE

NONTRANSFERABLE UNDER THIS SUBSECTION MAY BE TRANSFERRED IN ACCORDANCE WITH

TITLE SEVENTEEN OF ARTICLE FIVE OF THE GENERAL OBLIGATIONS LAW. AS USED IN THIS

PARAGRAPH THE TERM "STRUCTURED SETTLEMENT" MEANS AN ARRANGEMENT FOR PERIODIC

PAYMENTS OF DAMAGES FOR PERSONAL INJURIES ESTABLISHED BY SETTLEMENT OR JUDGMENT

IN RESOLUTION OF A TORT CLAIM; AND THE TERM "PERIODIC PAYMENTS" SHALL INCLUDE

SCHEDULED FUTURE LUMP SUM PAYMENTS.

Section 4. This act shall take effect July 1, 2002 and shall apply to any

transfer of structured settlement payment rights under a transfer agreement

entered into on or after such date.

 

 

 

New York S.B. 4702

Version:

Enacted

Version Date:

September 22, 2003

Synopsis:

AN ACT to amend the general obligations law, in relation to permitting the waiver of commissions or other compensation otherwise due with respect to the structure settlement transfer agreements with immediate family members of victims of the September 11, 2001 terrorist attacks against the United States, and allowing such family members to elect to have such waived amounts contributed to certain charitable organizations or applied to premiums otherwise due

Text:

THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEMBLY, DO

ENACT AS FOLLOWS:

Section 1. The general obligations law is amended by adding a new section 5-1708-a to read as follows:

SECTION 5-1708-A. WAIVER FOR FAMILIES OF VICTIMS OF TERRORIST ATTACKS. NOTWITHSTANDING THE PROVISIONS OF SECTION FOUR THOUSAND TWO HUNDRED TWENTY-FOUR OF THE INSURANCE LAW:

(A) AN ANNUITY ISSUER, OR AN EMPLOYEE OR OTHER REPRESENTATIVE OF SUCH ISSUER,

SHALL BE PERMITTED TO WAIVE OR OFFER TO WAIVE THE COMMISSION OR OTHER COMPENSATION OTHERWISE PAYABLE THERETO AS A RESULT OF THE SALE OF A POLICY OR

CONTRACT SUBJECT TO THE PROVISIONS OF SECTION FOUR THOUSAND TWO HUNDRED

TWENTY-FOUR OF THE INSURANCE LAW TO A MEMBER OF THE IMMEDIATE FAMILY OF A

PERSON WHO WAS A VICTIM OF THE SEPTEMBER ELEVENTH, TWO THOUSAND ONE TERRORIST

ATTACKS AGAINST THE UNITED STATES; AND (B) IN CONNECTION WITH SUCH WAIVER, THE

INSURANCE COMPANY MAY, AT THE ELECTION OF THE POLICYOWNER OR CONTRACT OWNER:

(I) CONTRIBUTE THE AMOUNT OF SUCH WAIVED COMMISSION OR OTHER COMPENSATION TO A

CHARITABLE ORGANIZATION THAT MEETS THE REQUIREMENTS OF SECTION 501(C)(3) OF THE

INTERNAL REVENUE CODE OF 1986, AS AMENDED, AND IS ORGANIZED FOR THE BENEFIT OF

FAMILIES OF VICTIMS OF SUCH ATTACK; OR (II) DEDUCT FROM THE PREMIUM AN AMOUNT

EQUAL TO SUCH WAIVED COMMISSION OR OTHER COMPENSATION OTHERWISE PAYABLE THERETO AS A RESULT OF THE SALE.

(C) FOR PURPOSES OF THIS SECTION, THE TERM "VICTIM" SHALL MEAN A DECEDENT WHODIED AS A RESULT OF WOUNDS OR INJURY INCURRED AS A RESULT OF THE TERRORISTATTACKS AGAINST THE WORLD TRADE CENTER OR THE PENTAGON ON SEPTEMBER ELEVENTH, TWO THOUSAND ONE, OR THE TERRORIST-RELATED AIRCRAFT CRASH IN PENNSYLVANIA ON SUCH DATE, BUT SHALL NOT INCLUDE ANY INDIVIDUAL IDENTIFIED BY THE UNITED STATES ATTORNEY GENERAL TO HAVE BEEN A PARTICIPANT OR CONSPIRATOR IN SUCH ATTACK OR A REPRESENTATIVE OF SUCH AN INDIVIDUAL.

(D) AN ISSUER SEEKING TO AVAIL ITSELF OF THE PROVISIONS OF THIS SECTION SHALL

FIRST SUBMIT ITS PLAN OF IMPLEMENTATION TO THE SUPERINTENDENT OF INSURANCE FOR

PRIOR APPROVAL. IF THE PLAN IS APPROVED, SUCH ISSUER SHALL THEREAFTER, UPON

REQUEST OF SUCH SUPERINTENDENT, SUBMIT A REPORT TO SUCH SUPERINTENDENT

REGARDING ITS EXPERIENCE IN THE IMPLEMENTATION OF SUCH PROVISIONS.

Section 2. This act shall take effect immediately.

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: Chapter 135 (NM H.B. 495)

Enacted 7/1/2005

Effective 7/1/2005

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

AN ACT RELATING TO CIVIL LAW; ENACTING THE STRUCTURED SETTLEMENT PROTECTION ACT.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1.
SHORT TITLE.--This act may be cited as the "Structured Settlement Protection
Act".

Section 2. DEFINITIONS.--As used in the Structured Settlement
Protection Act:

A. "annuity issuer" means an insurer that has issued a contract to fund
periodic payments under a structured settlement;

B. "court" means:

(1) the court of original jurisdiction that authorized or approved a

structured settlement; or

(2) if the court that authorized or approved the structured settlement no
longer has jurisdiction to approve a transfer of payment rights under the
structured settlement under the Structured Settlement Protection Act, a
district court or a probate court located in the county in which the payee
resides;

C. "dependents" includes a payee's spouse, minor children and all other persons
for whom the payee is legally obligated to provide support, including alimony;

D. "discounted present value" means the present value of future payments
determined by discounting the payments to the present using the most recently
published applicable federal rate for determining the present value of an
annuity, as issued by the United States internal revenue service;

E. "gross advance amount" means the sum payable to the payee or for the payee's
account as consideration for a transfer of structured settlement payment rights
before any reductions for transfer expenses or other deductions to be made from
the consideration;

F. "independent professional advice" means advice of an attorney, certified
public accountant, actuary or other licensed professional adviser;

G. "interested party" means, with respect to any structured settlement:

(1) the payee;

(2) any beneficiary irrevocably designated under the annuity contract to
receive payments following the payee's death;

(3) the annuity issuer;

(4) the structured settlement obligor; and

(5) any other party that has continuing rights or obligations under the
structured settlement;

H. "net advance amount" means the gross advance amount less the aggregate
amount of the actual and estimated transfer expenses required to be disclosed
under Subsection E of Section 3 of the Structured Settlement Protection Act;

I. "payee" means an individual who is receiving tax-free payments under a
structured settlement and proposes to transfer payment rights under the
structured settlement;

J. "periodic payments" includes both recurring payments and scheduled future
lump-sum payments;

K. "qualified assignment agreement" means an agreement providing for a
qualified assignment within the meaning of Section 130 of the Internal Revenue
Code of 1986, as amended;

L. "settled claim" means the original tort claim or workers' compensation claim
resolved by a structured settlement;

M. "structured settlement" means an arrangement for periodic payment of damages
for personal injuries or sickness established by settlement or judgment in
resolution of a tort claim or for periodic payments in settlement of a workers'
compensation claim;

N. "structured settlement agreement" means the agreement, judgment, stipulation
or release embodying the terms of a structured settlement;

O. "structured settlement obligor" means, with respect to any structured
settlement, the party that has the continuing obligation to make periodic
payments to the payee under a structured settlement agreement or a qualified
assignment agreement;

P. "structured settlement payment rights" means rights to receive periodic
payments under a structured settlement, whether from the structured settlement
obligor or the annuity issuer, if:

(1) the payee is domiciled in or the domicile or principal place of business of
the structured settlement obligor or the annuity issuer is located in this
state;

(2) the structured settlement agreement was authorized or approved by a court
located in this state; or

(3) the structured settlement agreement is expressly governed by the laws of
this state;

Q. "terms of the structured settlement" include, with respect to any structured
settlement, the terms of the structured settlement agreement, the annuity
contract, any qualified assignment agreement and any order or other approval of
the court;

R. "transfer" means any sale, assignment, pledge, hypothecation or other
alienation or encumbrance of structured settlement payment rights made by a
payee for consideration, except that "transfer" does not include the creation
or perfection of a security interest in structured settlement payment rights
under a blanket security agreement entered into with an insured depository
institution, in the absence of any action to redirect the structured settlement
payments to the insured depository institution, or its agent or successor in
interest, or to enforce the blanket security interest against the structured
settlement payment rights;

S. "transfer agreement" means the agreement providing for a transfer of
structured settlement payment rights;

T. "transfer expenses" means all the expenses of a transfer that are required
under the transfer agreement to be paid by the payee or deducted from the gross
advance amount, including court filing fees, attorney fees, escrow fees, lien
recording fees, judgment and lien search fees, finders' fees, commissions and
other payments to a broker or other intermediary, except that "transfer
expenses" does not include preexisting obligations of the payee payable for the
payee's account from the proceeds of a transfer; and

U. "transferee" means a party acquiring or proposing to acquire structured

settlement payment rights through a transfer. Section 3. REQUIRED DISCLOSURES
TO PAYEE.--At least three days before the date on which the payee signs a
transfer agreement, the transferee shall provide to the payee a separate
disclosure statement, in bold type at least fourteen points in size, that
states:

A. the amounts and due dates of the structured settlement payments to be
transferred;

B. the aggregate amount of the payments;

C. the discounted present value of the payments to be transferred, which shall
be identified as the "calculation of current value of the transferred
structured settlement payments under federal standards for valuing annuities",
and the amount of the applicable federal rate used in calculating the
discounted present value;

D. the gross advance amount;

E. an itemized listing of all applicable transfer expenses, other than attorney
fees and related disbursements payable in connection with the transferee's
application for approval of the transfer, and the transferee's best estimate of
the amount of those expenses;

F. the net advance amount;

G. the amount of any penalties or liquidated damages payable by the payee in
the event of any breach of the transfer agreement by the payee; and

H. a statement that the payee has the right to cancel the transfer agreement,
without penalty or further obligation, not later than the close of the third
business day after the date the agreement is signed by the payee. Section 4.
APPROVAL OF TRANSFERS OF STRUCTURED SETTLEMENT PAYMENT RIGHTS.--No direct or
indirect transfer of structured settlement payment rights shall be effective
and no structured settlement obligor or annuity issuer shall be required to
make any payment directly or indirectly to any transferee of structured
settlement payment rights unless the transfer has been approved in advance in a
final court order based on express findings by the court that:

A. the transfer is in the best interest of the payee, taking into account the
welfare and support of the payee's dependents;

B. the payee has been advised in writing by the transferee to seek independent
professional advice regarding the transfer and has either received the advice
or knowingly waived the advice in writing; and

C. the transfer does not contravene any applicable statute or an order of any
court or other governmental authority. Section 5. EFFECTS OF TRANSFER OF
STRUCTURED SETTLEMENT PAYMENT RIGHTS.--Following a transfer of structured
settlement payment rights pursuant to the Structured Settlement Protection Act:

A. the structured settlement obligor and the annuity issuer shall, as to all
parties except the transferee, be discharged and released from any and all
liability for the transferred payments;

B. the transferee shall be liable to the structured settlement obligor and the
annuity issuer:

(1) for any taxes incurred by the parties as a consequence of the transfer if
the transfer contravenes the terms of the structured settlement; and

(2) for any other liabilities or costs, including reasonable costs and attorney
fees, arising from compliance by the parties with the order of the court or
arising as a consequence of the transferee's failure to comply with the
provisions of the Structured Settlement Protection Act;

C. the transferee shall be liable to the payee:

(1) if the transfer contravenes the terms of the structured settlement, for any
taxes incurred by the payee as a consequence of the transfer; and

(2) for any other liabilities or costs, including reasonable costs and attorney
fees, arising as a consequence of the transferee's failure to comply with the
provisions of the Structured Settlement Protection Act;

D. neither the structured settlement obligor nor the annuity issuer may be
required to divide any periodic payment between the payee and any transferee or
assignee or between two or more transferees or assignees; and

E. any further transfer of structured settlement payment rights by the payee
may be made only after compliance with all of the requirements of the
Structured Settlement Protection Act. Section 6. PROCEDURE FOR APPROVAL OF
TRANSFERS.--

A. An application under the Structured Settlement Protection Act for approval
of a transfer of structured settlement payment rights shall be made by the
transferee and shall be brought in an appropriate court.

B. At least twenty days before the date of the scheduled hearing on any
application for approval of a transfer of structured settlement payment rights
under Section 4 of the Structured Settlement Protection Act, the transferee
shall file with the court and serve on all interested parties a notice of the
proposed transfer and the application for authorization, including with the
notice:

(1) a copy of the transferee's application;

(2) a copy of the transfer agreement;

(3) a copy of the disclosure statement required under Section 3 of the
Structured Settlement Protection Act;

(4) a listing of each of the payee's dependents, together with each dependent's
age;

(5) notice that any interested party is entitled to support, oppose or
otherwise respond to the transferee's application, either in person or by
counsel, by submitting written comments to the court or by participating in the
hearing; and

(6) notice of the time and place of the hearing and notification of the manner
in which and the time by which written responses to the application must be
filed to be considered by the court.

C. Written responses to the application under Paragraph (6) of Subsection B of
this section shall be filed on or before the fifteenth day after the date the
transferee's notice is served. Section 7. GENERAL PROVISIONS-- CONSTRUCTION.--

A. The provisions of the Structured Settlement Protection Act shall not be
waived by any payee.

B. Any transfer agreement entered into by a payee who resides in this state
shall provide that disputes under the transfer agreement, including any claim
that the payee has breached the agreement, shall be determined in and under the
laws of this state. The transfer agreement shall not authorize the transferee
or any other party to confess judgment or consent to entry of judgment against
the payee.

C. Transfer of structured settlement payment rights shall not extend to any
payments that are life-contingent unless, prior to the date on which the payee
signs the transfer agreement, the transferee has established and agreed to
maintain procedures reasonably satisfactory to the structured settlement
obligor and the annuity issuer for:

(1) periodically confirming the payee's survival; and

(2) giving the structured settlement obligor and the annuity issuer prompt
written notice in the event of the payee's death.

D. A payee who proposes to make a transfer of structured settlement payment
rights shall not incur any penalty, forfeit any application fee or other
payment, or otherwise incur any liability to the proposed transferee or any
assignee based on any failure of the transfer to satisfy the conditions of the
Structured Settlement Protection Act.

E. Nothing contained in the Structured Settlement Protection Act may be
construed to authorize any transfer of structured settlement payment rights in
contravention of any law or to imply that any transfer under a transfer
agreement entered into before July 1, 2005 is valid or invalid.

F. Compliance with the requirements in Section 3 of the Structured Settlement
Protection Act and fulfillment of the conditions in Section 4 of that act are
solely the responsibility of the transferee in any transfer of structured
settlement payment rights, and neither the structured settlement obligor nor
the annuity issuer bears any responsibility for, or any liability arising from,
noncompliance with the requirements or failure to fulfill the conditions.

Section 8. EFFECTIVE DATE.--The effective date of the provisions of this act is
July 1, 2005. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO: Section 1.
SHORT TITLE.--This act may be cited as the " Structured Settlement Protection
Act". Section 2. DEFINITIONS.--As used in the Structured Settlement
Protection Act:

A. " annuity issuer" means an insurer that has issued a contract to fund
periodic payments under a structured settlement;

B. "court" means:

(1) the court of original jurisdiction that authorized or approved a
structured settlement; or

(2) if the court that authorized or approved the structured settlement no
longer has jurisdiction to approve a transfer of payment rights under the
structured settlement under the Structured Settlement Protection Act, a
district court or a probate court located in the county in which the payee
resides;

C. "dependents" includes a payee's spouse, minor children and all other persons
for whom the payee is legally obligated to provide support, including alimony;

D. " discounted present value " means the present value of future payments
determined by discounting the payments to the present using the most recently
published applicable federal rate for determining the present value of an
annuity, as issued by the United States internal revenue service;

E. "gross advance amount" means the sum payable to the payee or for the payee's
account as consideration for a transfer of structured settlement payment
rights before any reductions for transfer expenses or other deductions to be
made from the consideration;

F. "independent professional advice" means advice of an attorney, certified
public accountant, actuary or other licensed professional adviser;

G. "interested party" means, with respect to any structured settlement:

(1) the payee;

(2) any beneficiary irrevocably designated under the annuity contract to
receive payments following the payee's death;

(3) the annuity issuer;

(4) the structured settlement obligor; and

(5) any other party that has continuing rights or obligations under the
structured settlement;

H. "net advance amount" means the gross advance amount less the aggregate
amount of the actual and estimated transfer expenses required to be disclosed
under Subsection E of Section 3 of the Structured Settlement Protection Act;

I. "payee" means an individual who is receiving tax-free payments under a
structured settlement and proposes to transfer payment rights under the
structured settlement;

J. "periodic payments" includes both recurring payments and scheduled future
lump-sum payments;

K. "qualified assignment agreement" means an agreement providing for a
qualified assignment within the meaning of Section 130 of the Internal Revenue

Code of 1986, as amended;

L. "settled claim" means the original tort claim or workers' compensation claim
resolved by a structured settlement;

M. " structured settlement " means an arrangement for periodic payment of
damages for personal injuries or sickness established by settlement or judgment
in resolution of a tort claim or for periodic payments in settlement of a
workers' compensation claim;

N. " structured settlement agreement" means the agreement, judgment,
stipulation or release embodying the terms of a structured settlement;

O. " structured settlement obligor" means, with respect to any structured
settlement, the party that has the continuing obligation to make periodic
payments to the payee under a structured settlement agreement or a qualified
assignment agreement;

P. " structured settlement payment rights" means rights to receive periodic
payments under a structured settlement, whether from the structured settlement
obligor or the annuity issuer, if:

(1) the payee is domiciled in or the domicile or principal place of business of
the structured settlement obligor or the annuity issuer is located in this
state;

(2) the structured settlement agreement was authorized or approved by a court
located in this state; or

(3) the structured settlement agreement is expressly governed by the laws of
this state;

Q. "terms of the structured settlement " include, with respect to any
structured settlement, the terms of the structured settlement agreement, the
annuity contract, any qualified assignment agreement and any order or other
approval of the court;

R. "transfer" means any sale, assignment, pledge, hypothecation or other
alienation or encumbrance of structured settlement payment rights made by a
payee for consideration, except that "transfer" does not include the creation
or perfection of a security interest in structured settlement payment rights
under a blanket security agreement entered into with an insured depository
institution, in the absence of any action to redirect the structured
settlement payments to the insured depository institution, or its agent or
successor in interest, or to enforce the blanket security interest against
the structured settlement payment rights;

S. "transfer agreement" means the agreement providing for a transfer of
structured settlement payment rights;

T. "transfer expenses" means all the expenses of a transfer that are required
under the transfer agreement to be paid by the payee or deducted from the gross
advance amount, including court filing fees, attorney fees, escrow fees, lien
recording fees, judgment and lien search fees, finders' fees, commissions and
other payments to a broker or other intermediary, except that "transfer
expenses" does not include preexisting obligations of the payee payable on the
payee's account from the proceeds of a transfer; and

U. "transferee" means a party acquiring or proposing to acquire structured
settlement payment rights through a transfer. Section 3. REQUIRED DISCLOSURES
TO PAYEE.--At least three days before the date on which the payee signs a
transfer agreement, the transferee shall provide to the payee a separate
disclosure statement, in bold type at least fourteen points in size, that
states:

A. the amounts and due dates of the structured settlement payments to be
transferred;

B. the aggregate amount of the payments;

C. the discounted present value of the payments to be transferred, which shall
be identified as the "calculation of current value of the transferred
structured settlement payments under federal standards for valuing annuities
", and the amount of the applicable federal rate used in calculating the
discounted present value;

D. the gross advance amount;

E. an itemized listing of all applicable transfer expenses, other than attorney
fees and related disbursements payable in connection with the transferee's
application for approval of the transfer, and the transferee's best estimate of
the amount of those expenses;

F. the net advance amount;

G. the amount of any penalties or liquidated damages payable by the payee in
the event of any breach of the transfer agreement by the payee; and

H. a statement that the payee has the right to cancel the transfer agreement,
without penalty or further obligation, not later than the close of the third
business day after the date the agreement is signed by the payee. Section 4.
APPROVAL OF TRANSFERS OF STRUCTURED SETTLEMENT PAYMENT RIGHTS.--No direct or
indirect transfer of structured settlement payment rights shall be effective
and no structured settlement obligor or annuity issuer shall be required to
make any payment directly or indirectly to any transferee of structured
settlement payment rights unless the transfer has been approved in advance in a
final court order based on express findings by the court that:

A. the transfer is in the best interest of the payee, taking into account the
welfare and support of the payee's dependents;

B. the payee has been advised in writing by the transferee to seek independent
professional advice regarding the transfer and has either received the advice
or knowingly waived the advice in writing; and

C. the transfer does not contravene any applicable statute or an order of any
court or other governmental authority.

Section 5. EFFECTS OF TRANSFER OF STRUCTURED SETTLEMENT PAYMENT
RIGHTS.--Following a transfer of structured settlement payment rights pursuant
to the Structured Settlement Protection Act:

A. the structured settlement obligor and the annuity issuer shall, as to all
parties except the transferee, be discharged and released from any and all
liability for the transferred payments;

B. the transferee shall be liable to the structured settlement obligor and the
annuity issuer:

(1) for any taxes incurred by the parties as a consequence of the transfer if
the transfer contravenes the terms of the structured settlement; and

(2) for any other liabilities or costs, including reasonable costs and attorney
fees, arising from compliance by the parties with the order of the court or
arising as a consequence of the transferee's failure to comply with the
provisions of the Structured Settlement Protection Act;

C. the transferee shall be liable to the payee:

(1) if the transfer contravenes the terms of the structured settlement, for any
taxes incurred by the payee as a consequence of the transfer; and

(2) for any other liabilities or costs, including reasonable costs and attorney
fees, arising as a consequence of the transferee's failure to comply with the
provisions of the Structured Settlement Protection Act;

D. neither the structured settlement obligor nor the annuity issuer may be
required to divide any periodic payment between the payee and any transferee or
assignee or between two or more transferees or assignees; and

E. any further transfer of structured settlement payment rights by the payee
may be made only after compliance with all of the requirements of the
Structured Settlement Protection Act. Section 6. PROCEDURE FOR APPROVAL OF
TRANSFERS.--

A. An application under the Structured Settlement Protection Act for approval
of a transfer of structured settlement payment rights shall be made by the
transferee and shall be brought in court.

B. At least twenty days before the date of the scheduled hearing on any
application for approval of a transfer of structured settlement payment rights
under Section 4 of the Structured Settlement Protection Act, the transferee
shall file with the court and serve on all interested parties a notice of the
proposed transfer and the application for authorization, including with the
notice:

(1) a copy of the transferee's application;

(2) a copy of the transfer agreement;

(3) a copy of the disclosure statement required under Section 3 of the
Structured Settlement Protection Act;

(4) a listing of each of the payee's dependents, together with each dependent's
age;

(5) notice that any interested party is entitled to support, oppose or
otherwise respond to the transferee's application, either in person or by
counsel, by submitting written comments to the court or by participating in the
hearing; and

(6) notice of the time and place of the hearing and notification of the manner
in which and the time by which written responses to the application must be
filed to be considered by the court.

C. Written responses to the application under Paragraph (6) of Subsection B of
this section shall be filed on or before the fifteenth day after the date the
transferee's notice is served. Section 7. GENERAL PROVISIONS-- CONSTRUCTION.--

A. The provisions of the Structured Settlement Protection Act shall not be
waived by any payee.

B. Any transfer agreement entered into by a payee who resides in this state
shall provide that disputes under the transfer agreement, including any claim
that the payee has breached the agreement, shall be determined in and under the
laws of this state. The transfer agreement shall not authorize the transferee
or any other party to confess judgment or consent to entry of judgment against
the payee.

C. Transfer of structured settlement payment rights shall not extend to any
payments that are life-contingent unless, prior to the date on which the payee
signs the transfer agreement, the transferee has established and agreed to
maintain procedures reasonably satisfactory to the structured settlement
obligor and the annuity issuer for:

(1) periodically confirming the payee's survival; and

(2) giving the structured settlement obligor and the annuity issuer prompt
written notice in the event of the payee's death.

D. A payee who proposes to make a transfer of structured settlement payment
rights shall not incur any penalty, forfeit any application fee or other
payment, or otherwise incur any liability to the proposed transferee or any
assignee based on any failure of the transfer to satisfy the conditions of
the Structured Settlement Protection Act.

E. Nothing contained in the Structured Settlement Protection Act may be
construed to authorize any transfer of structured settlement payment rights in
contravention of any law or to imply that any transfer under a transfer
agreement entered into before July 1, 2005 is valid or invalid.

F. Compliance with the requirements in Section 3 of the Structured Settlement
Protection Act and fulfillment of the conditions in Section 4 of that act are
solely the responsibility of the transferee in any transfer of structured
settlement payment rights, and neither the structured settlement obligor nor
the annuity issuer bears any responsibility for, or any liability arising from,
noncompliance with the requirements or failure to fulfill the conditions.

Section 8. EFFECTIVE DATE.--The effective date of the provisions of this act is
July 1, 2005.

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: N.J. S.A. 2A:16-69 (AB 2146)

Enacted 7/2/2001

Effective 1/1/2002

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

New Jersey Transfer Act

2A:16-64. Definitions relative to structured settlements
2.For the purposes of this act:
"Annuity issuer" means an insurer that has issued a contract to fund periodic payments under a structured settlement.
"Dependents" includes a payee's spouse and minor children and all other persons for whom the payee is legally obligated to provide support, including alimony.
"Discounted present value" means the present value of future payments determined by discounting those payments to the present using the most recently published applicable federal rate for determining the present value of an annuity, as issued by the United States Internal Revenue Service.
"Gross advance amount" means the sum payable to the payee or for the payee's account as consideration for a transfer of structured settlement payment rights before any reductions for transfer expenses or other deductions to be made from that consideration.
"Independent professional advice" means advice of an attorney, certified public accountant, actuary or other licensed professional adviser.
"Interested parties" means, with respect to any structured settlement, the payee, any beneficiary irrevocably designated under the annuity contract to receive payments following the payee's death, the annuity issuer, the structured settlement obligor, and any other party that has continuing rights or obligations under the structured settlement.
"Net advance amount" means the gross advance amount less the aggregate amount of the actual and estimated transfer expenses required to be disclosed under subsection e. of section 3 of this act.
"Payee" means an individual who is receiving tax free payments under a structured settlement and proposes to make a transfer of payment rights thereunder.
"Periodic payments" includes both recurring payments and scheduled future lump sum payments.
"Qualified assignment agreement" means an agreement providing for a qualified assignment within the meaning of 26 U.S.C. s.130.
"Responsible administrative authority" means, with respect to a structured settlement, any government authority vested by law with exclusive jurisdiction over the settled claim resolved by the structured settlement.
"Settled claim" means the original tort claim or workers' compensation claim resolved by a structured settlement.
"Structured settlement" means an arrangement for periodic payment of damages for personal injuries or sickness established by settlement or judgment in resolution of a tort claim or for periodic payments in settlement of a workers' compensation claim.
"Structured settlement agreement" means the agreement, judgment, stipulation or release embodying the terms of a structured settlement.
"Structured settlement obligor" means, with respect to any structured settlement, the party that has the continuing obligation to make periodic payments to the payee under a structured settlement agreement or a qualified assignment agreement.
"Structured settlement payment rights" means rights to receive periodic payments under a structured settlement, whether from the structured settlement obligor or the annuity issuer, if:
(1)the payee is domiciled in, or the domicile or principal place of business of the structured settlement obligor or the annuity issuer is located in, this State; or
(2)the structured settlement agreement was approved by a court or responsible administrative authority in this State; or
(3)the structured settlement agreement is expressly governed by the laws of this State.
"Terms of the structured settlement" include, with respect to any structured settlement, the terms of the structured settlement agreement, the annuity contract, any qualified assignment agreement and any order or other approval of any court or responsible administrative authority or other government authority that authorized or approved the structured settlement.
"Transfer" means any sale, assignment, pledge, hypothecation or other alienation or encumbrance of structured settlement payment rights made by a payee for consideration; except that the term "transfer" does not include the creation or perfection of a security interest in structured settlement payment rights under a blanket security agreement entered into with an insured depository institution, in the absence of any action to redirect the structured settlement payments to the insured depository institution, or an agent or successor in interest thereof, or otherwise to enforce the blanket security interest against the structured settlement payment rights.
"Transfer agreement" means the agreement providing for a transfer of structured settlement payment rights.
"Transfer expenses" means all expenses of a transfer that are required under the transfer agreement to be paid by the payee or deducted from the gross advance amount, including, without limitation, court filing fees, attorneys' fees, escrow fees, lien recordation fees, judgment and lien search fees, finders' fees, commissions, and other payments to a broker or other intermediary; "transfer expenses" does not include preexisting obligations of the payee payable for the payee's account from the proceeds of a transfer.
"Transferee" means a party acquiring or proposing to acquire structured settlement payment rights through a transfer. L.2001,c.139,s.2.

2A:16-65. Provision of separate disclosure statement to payee, contents
3.Not less than three days prior to the date on which a payee signs a transfer agreement, the transferee shall provide to the payee a separate disclosure statement, in bold type no smaller than 14 points, setting forth:
a.the amounts and due dates of the structured settlement payments to be transferred;
b.the aggregate amount of the payments;
c.the discounted present value of the payments to be transferred, which shall be identified as the "calculation of current value of the transferred structured settlement payments under federal standards for valuing annuities" and the amount of the applicable federal rate used in calculating the discounted present value;
d.the gross advance amount;
e.an itemized listing of all applicable transfer expenses, other than attorneys' fees and related disbursements payable in connection with the transferee's application for approval of the transfer, and the transferee's best estimate of the amount of any of those fees and disbursements;
f.the net advance amount;
g.the amount of any penalties or liquidated damages payable by the payee in the event of any breach of the transfer agreement by the payee; and
h.a statement that the payee has the right to cancel the transfer agreement, without penalty or further obligation, not later than the third business day after the date the agreement is signed by the payee.
L.2001,c.139,s.3.

2A:16-66. Approval required for payment
4.No direct or indirect transfer of structured settlement payment rights shall be effective and no structured settlement obligor or annuity issuer shall be required to make any payment directly or indirectly to any transferee of structured settlement payment rights unless the transfer has been approved in advance in a final court order or order of a responsible administrative authority based on express findings by the court or responsible administrative authority that:
a. the transfer is in the best interest of the payee, taking into account the welfare and support of the payee's dependents;
b. the payee has been advised in writing by the transferee to seek independent professional advice regarding the transfer and has either received the advice or knowingly waived the right to seek that advice in writing; and
c. the transfer does not contravene any applicable statute or the order of any court or other government authority.

2A:16-67. Procedures following transfer
5.Following a transfer of structured settlement payment rights under this act:
a.The structured settlement obligor and the annuity issuer shall, as to all parties except the transferee, be discharged and released from any and all liability for the transferred payments;
b.The transferee shall be liable to the structured settlement obligor and the annuity issuer:
(1)if the transfer contravenes the terms of the structured settlement, for any taxes incurred by those parties as a consequence of the transfer; and
(2)for any other liabilities or costs, including reasonable costs and attorneys' fees, arising from compliance by those parties with the order of the court or responsible administrative authority or arising as a consequence of the transferee's failure to comply with this act;
c. Neither the annuity issuer nor the structured settlement obligor shall be required to divide any periodic payment between the payee and any transferee or assignee or between two or more transferees or assignees; and
d. Any further transfer of structured settlement payment rights by the payee shall be made in compliance with all of the requirements of this act.
L.2001,c.139,s.5.

2A:16-68. Application for approval of transfer, procedure
6. a. An application under this act to a court or responsible administrative authority for approval of a transfer of structured settlement payment rights shall be made by the transferee and may be brought in the jurisdiction in which the payee resides, in the jurisdiction in which the structured settlement obligor or the annuity issuer maintains its principal place of business, or in any court or before any responsible administrative authority which approved the structured settlement agreement.
b. Not less than 20 days prior to the scheduled hearing on any application for approval of a transfer of structured settlement payment rights under section 4 of this act, the transferee shall file with the court or responsible administrative authority and serve on all interested parties a notice of the proposed transfer and the application for its authorization, including with the notice:
(1)a copy of the transferee's application;
(2)a copy of the transfer agreement;
(3)a copy of the disclosure statement required under section 3 of this act;
(4)a listing of each of the payee's dependents, together with each dependent's age;
(5)notification that any interested party is entitled to support, oppose or otherwise respond to the transferee's application, either in person or by counsel, by submitting written comments to the court or responsible administrative authority or by participating in the hearing; and
(6)notification of the time and place of the hearing and notification of the manner in which, and the time by which, written responses to the application shall be filed, which shall be not less than 15 days after service of the transferee's notice, in order to be considered by the court or responsible administrative authority.

2A:16-69. Provisions of act not waivable; controlling law; prohibitions
7. a. The provisions of this act shall not be waived by any payee.
b. Any transfer agreement entered into on or after the effective date of this act by a payee who resides in this State shall provide that disputes under the transfer agreement, including any claim that the payee has breached the agreement, shall be determined in and under the laws of this State. No transfer agreement shall authorize the transferee or any other party to confess judgment or consent to entry of judgment against the payee.
c. No transfer of structured settlement payment rights shall extend to any payments that are life-contingent unless, prior to the date on which the payee signs the transfer agreement, the transferee has established and has agreed to maintain procedures reasonably satisfactory to the annuity issuer and the structured settlement obligor for: (1) periodically confirming the payee's survival; and (2) giving the annuity issuer and the structured settlement obligor prompt written notice in the event of the payee's death.
d. No payee who proposes to make a transfer of structured settlement payment rights shall incur any penalty, forfeit any application fee or other payment, or otherwise incur any liability to the proposed transferee or any assignee based on any failure of the transfer to satisfy the conditions of this act.
e. Nothing contained in this act shall be construed to authorize any transfer of structured settlement payment rights in contravention of any law or to imply that any transfer under a transfer agreement entered into prior to the effective date of this act is valid or invalid.
f. Compliance with the requirements set forth in section 3 of this act and fulfillment of the conditions set forth in section 4 of this act shall be solely the responsibility of the transferee in any transfer of structured settlement payment rights, and neither the structured settlement obligor nor the annuity issuer shall bear any responsibility for, or any liability arising from, non-compliance with those requirements or failure to fulfill those conditions.
L.2001,c.139,s.7.

In 2000, the National Structured Settlements Trade Association and National Association of Settlement Purchasers agreed on language that was designed to protect the consumer when selling their structured settlement payments for cash. This language is referred to as the “Model State Structured Settlement Protection Act” and 46 states now have adopted laws that are closely aligned with the model act.

MODEL STATE STRUCTURED SETTLEMENT PROTECTION ACT

SECTION 1. TITLE. This Act shall be known and referred to as the “Structured Settlement Protection Act."

SECTION 2. DEFINITIONS. For purposes of this Act—

(a) "annuity issuer" means an insurer that has issued a contract to fund periodic payments under a structured settlement;

(b) "dependents” include a payee\’s spouse and minor children and all other persons for whom the payee is legally obligated to provide support, including alimony;

(c) "discounted present value" means the present value of future payments determined by discounting such payments to the present using the most recently published Applicable Federal Rate for determining the present value of an annuity, as issued by the United States Internal Revenue Service;

(d) "gross advance amount" means the sum payable to the payee or for the payee's account as consideration for a transfer of structured settlement payment rights before any reductions for transfer expenses or other deductions to be made from such consideration;

(e) "independent professional advice” means advice of an attorney, certified public accountant, actuary or other licensed professional adviser;

(f) "interested parties" means, with respect to any structured settlement, the payee, any beneficiary irrevocably designated under the annuity contract to receive payments following the payee’s death, the annuity issuer, the structured settlement obligor, and any other party that has continuing rights or obligations under such structured settlement;

(g) "net advance amount" means the gross advance amount less the aggregate amount of the actual and estimated transfer expenses required to be disclosed under Section 3(e) of this Act;

(h) "payee" means an individual who is receiving tax free payments under a structured settlement and proposes to make a transfer of payment rights thereunder;

(i) "periodic payments" includes both recurring payments and scheduled future lump sum payments;

(j) qualified assignment agreement" means an agreement providing for a qualified assignment within the meaning of section 130 of the United States Internal Revenue Code, United States Code Title 26, as amended from time to time;

(k) "responsible administrative authority" means, with respect to a structured settlement, any government authority vested by law with exclusive jurisdiction over the settled claim resolved by such structured settlement;

(l) "settled claim" means the original tort claim or workers\’ compensation claim resolved by a structured settlement;

(m) "structured settlement" means an arrangement for periodic payment of damages for personal injuries or sickness established by settlement or judgment in resolution of a tort claim or for periodic payments in settlement of a workers’ compensation claim;

(n) "structured settlement agreement" means the agreement, judgment, stipulation, or release embodying the terms of a structured settlement;

(o) "structured settlement obligor" means, with respect to any structured settlement, the party that has the continuing obligation to make periodic payments to the payee under a structured settlement agreement or a qualified assignment agreement;

(p) "structured settlement payment rights" means rights to receive periodic payments under a structured settlement, whether from the structured settlement obligor or the annuity issuer, where –

(i) the payee is domiciled in, or the domicile or principal place of business of the structured settlement obligor or the annuity issuer is located in, this State; or(ii) the structured settlement agreement was approved by a court or responsible administrative authority in this State; or

(iii) the structured settlement agreement is expressly governed by the laws of this State;

(q) "terms of the structured settlement" include, with respect to any structured settlement, the terms of the structured settlement agreement, the annuity contract, any qualified assignment agreement and any order or other approval of any court or responsible administrative authority or other government authority that authorized or approved such structured settlement;

(r) "transfer" means any sale, assignment, pledge, hypothecation or other alienation or encumbrance of structured settlement payment rights made by a payee for consideration; provided that the term “transfer” does not include thecreation or perfection of a security interest in structured settlement payment rights under a blanket security agreement entered into with an insured depository institution, in the absence of any action to redirect the structured settlement payments to such insured depository institution, or an agent or successor in interest thereof, or otherwise to enforce such blanket security interest against the structured settlement payment rights;

(s) "transfer agreement" means the agreement providing for a transfer of structured settlement payment rights.

(t) "transfer expenses" means all expenses of a transfer that are required under the transfer agreement to be paid by the payee or deducted from the gross advance amount, including, without limitation, court filing fees, attorneys fees, escrow fees, lien recordation fees, judgment and lien search fees, finders’ fees, commissions, and other payments to a broker or other intermediary; “transfer expenses” do not include preexisting obligations of the payee payable for the payee’s account from the proceeds of a transfer;

(u) "transferee" means a party acquiring or proposing to acquire structured settlement payment rights through a transfer;

SECTION 3. REQUIRED DISCLOSURES TO PAYEE. Not less than three (3) days prior to the date on which a payee signs a transfer agreement, the transferee shall provide to the payee a separate disclosure statement, in bold type no smaller than 14 points, setting forth —

(a) the amounts and due dates of the structured settlement payments to be transferred;

(b) the aggregate amount of such payments;

(c) the discounted present value of the payments to be transferred, which shall be identified as the "calculation of current value of the transferred structured settlement payments under federal standards for valuing annuities", and the amount of the Applicable Federal Rate used in calculating such discounted present value;

(d) the gross advance amount;

(e) an itemized listing of all applicable transfer expenses, other than attorneys’ fees and related disbursements payable in connection with the transferee’s application for approval of the transfer, and the transferee’s best estimate of the amount of any such fees and disbursements;

(f) the net advance amount;

(g) the amount of any penalties or liquidated damages payable by the payee in the event of any breach of the transfer agreement by the payee; and

(h) a statement that the payee has the right to cancel the transfer agreement, without penalty or further obligation, not later than the third business day after the date the agreement is signed by the payee.

SECTION 4. APPROVAL OF TRANSFERS OF STRUCTURED SETTLEMENT PAYMENT RIGHTS.

(a) No direct or indirect transfer of structured settlement payment rights shall be effective and no structured settlement obligor or annuity issuer shall be required to make any payment directly or indirectly to any transferee of structured settlement payment rights unless the transfer has been approved in advance in a final court order or order of a responsible administrative authority based on express findings by such court or responsible administrative authority that —

(i) the transfer is in the best interest of the payee, taking into account the welfare and support of the payee's dependents;(ii) the payee has been advised in writing by the transferee to seek independent professional advice regarding the transfer and has either received such advice or knowingly waived such advice in writing; and

(iii) the transfer does not contravene any applicable statute or the order of any court or other government authority;

SECTION 5. EFFECTS OF TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS. Following a transfer of structured settlementpayment rights under this Act:

(a) The structured settlement obligor and the annuity issuer shall, as to all parties except the transferee, be discharged and released from any and all liability for the transferred payments;

(b) The transferee shall be liable to the structured settlement obligor and the annuity issuer:

(i) if the transfer contravenes the terms of the structured settlement, for any taxes incurred by such parties as a consequence of the transfer; and(ii) for any other liabilities or costs, including reasonable costs and attorneys\’ fees, arising from compliance by such parties with the order of the court or responsible administrative authority or arising as a consequence of the transferee's failure to comply with this Act;

(c) Neither the annuity issuer nor the structured settlement obligor may be required to divide any periodic payment between the payee and any transferee or assignee or between two (or more) transferees or assignees; and

(d) Any further transfer of structured settlement payment rights by the payee may be made only after compliance with all of the requirements of this Act.

SECTION 6. PROCEDURE FOR APPROVAL OF TRANSFERS.

(a) An application under this Act for approval of a transfer of structured settlement payment rights shall be made by the transferee and may be

brought in the [county] in which the payee resides, in the [county] in which the structured settlement obligor or the annuity issuer maintains its principal place of business, or in any court or before any responsible administrative authority which approved the structured settlement agreement.

(b) Not less than twenty (20) days prior to the scheduled hearing on any application for approval of a transfer of structured settlement payment rights under Section 4 of this Act, the transferee shall file with the court or responsible administrative authority and serve on all interested parties a notice of the proposed transfer and the application for its authorization, including with such notice:

(i) a copy of the transferee’s application;(ii) a copy of the transfer agreement;

(iii) a copy of the disclosure statement required under Section 3 of this Act;

(iv) a listing of each of the payee's dependents, together with each dependent's age;

(v) notification that any interested party is entitled to support, oppose or otherwise respond to the transferee’s application, either in person or by counsel, by submitting written comments to the court or responsible administrative authority or by participating in the hearing; and

(vi) notification of the time and place of the hearing and notification of the manner in which and the time by which written responses to the application must be filed (which shall be not less than [fifteen (15)] days after service of the transferee’s notice) in order to be considered by the court or responsible administrative authority.

SECTION 7. GENERAL PROVISIONS; CONSTRUCTION.

(a) The provisions of this Act may not be waived by any payee.

(b) Any transfer agreement entered into on or after the effective date of this Act by a payee who resides in this state shall provide that disputes under such transfer agreement, including any claim that the payee has breached the agreement, shall be determined in and under the laws of this State. No such transfer agreement shall authorize the transferee or any other party to confess judgment or consent to entry of judgment against the payee.

(c) No transfer of structured settlement payment rights shall extend to any payments that are life-contingent unless, prior to the date on which the payee signs the transfer agreement, the transferee has established and has agreed to maintain procedures reasonably satisfactory to the annuity issuer and the structured settlement obligor for (i) periodically confirming the payee’s survival, and (ii) giving the annuity issuer and the structured settlement obligor prompt written notice in the event of the payee’s death.

(d) No payee who proposes to make a transfer of structured settlement payment rights shall incur any penalty, forfeit any application fee or other payment, or otherwise incur any liability to the proposed transferee or any assignee based on any failure of such transfer to satisfy the conditions of this Act.

(e) Nothing contained in this Act shall be construed to authorize any transfer of structured settlement payment rights in contravention of any law or to imply that any transfer under a transfer agreement entered into prior to the effective date of this Act is valid or invalid.

(f) Compliance with the requirements set forth in Section 3 of this Act and fulfillment of the conditions set forth in Section 4 of this Act shall be solely the responsibility of the transferee in any transfer of structured settlement payment rights, and neither the structured settlement obligor nor the annuity issuer shall bear any responsibility for, or any liability arising from, noncompliance with such requirements or failure to fulfill such conditions.

EFFECTIVE DATE. This Act shall apply to any transfer of structured settlement payment rights under a transfer agreement entered into on or after the [thirtieth (30th)] day after the date of enactment of this Act; provided, however, that nothing contained herein shall imply that any transfer under a transfer agreement reached prior to such date is either effective or ineffective.

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: NRS § 42.030 (NV A.B. 166)

Enacted 5/20/2003

Effective 10/1/2003

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

Section 1. Chapter 42 of NRS is hereby amended by adding thereto a new section

to read as follows:

1. AN AGREEMENT TO TRANSFER THE RIGHT TO RECEIVE PAYMENTS PURSUANT TO A

STRUCTURED SETTLEMENT TO A TRANSFEREE IS VALID AND ENFORCEABLE ONLY IF THE

TRANSFER IS APPROVED BY A DISTRICT COURT. THE TRANSFEREE MUST PETITION THE

DISTRICT COURT FOR SUCH APPROVAL AND THE COURT SHALL APPROVE THE TRANSFER IF IT

DETERMINES THAT:

(A) THE TRANSFER IS IN THE BEST INTEREST OF THE PAYEE, CONSIDERING THE

TOTALITY OF THE CIRCUMSTANCES, INCLUDING, WITHOUT LIMITATION, THE WELFARE AND

SUPPORT OF THE DEPENDENTS OF THE PAYEE;

(B) THE PAYEE HAS BEEN ADVISED IN WRITING BY THE TRANSFEREE TO SEEK

INDEPENDENT PROFESSIONAL ADVICE REGARDING THE TRANSFER AND HAS RECEIVED SUCH

INDEPENDENT PROFESSIONAL ADVICE OR HAS KNOWINGLY WAIVED SUCH ADVICE IN WRITING;

AND

(C) THE TRANSFER DOES NOT VIOLATE ANY APPLICABLE LAW OR THE ORDER OF ANY

COURT.

2. AN ACTION PURSUANT TO SUBSECTION 1 MUST BE COMMENCED IN THE DISTRICT COURT:

(A) LOCATED WHERE THE ORIGINAL CLAIM WHICH GAVE RISE TO THE STRUCTURED

SETTLEMENT WAS FILED; OR

(B) WITHIN THE COUNTY IN WHICH THE PAYEE RESIDES.

3. NOT LATER THAN 7 DAYS BEFORE A HEARING ON A PETITION PURSUANT TO SUBSECTION

1, THE TRANSFEREE MUST FILE WITH THE DISTRICT COURT AND SERVE ON ALL INTERESTED

PARTIES AND ANY ATTORNEY WHO REPRESENTED THE PAYEE IN THE ACTION WHICH RESULTED

IN THE SETTLED CLAIM A NOTICE OF THE PROPOSED AGREEMENT AND THE PETITION FOR

AUTHORIZATION OF THE PROPOSED AGREEMENT. THE NOTICE MUST INCLUDE, WITHOUT

LIMITATION:

(A) A COPY OF THE PETITION OF THE TRANSFEREE;

(B) A COPY OF THE PROPOSED AGREEMENT;

(C) A COPY OF THE DISCLOSURE REQUIRED PURSUANT TO SUBSECTION 4;

(D) A LIST WHICH INCLUDES THE NAME AND AGE OF EACH DEPENDENT OF THE PAYEE;

(E) A STATEMENT THAT ANY INTERESTED PARTY MAY SUPPORT, OPPOSE OR OTHERWISE

RESPOND TO THE PETITION OF THE TRANSFEREE BY APPEARING IN PERSON OR BY COUNSEL

DURING THE HEARING ON THE PETITION OR BY SUBMITTING WRITTEN COMMENTS TO THE

COURT; AND

(F) NOTICE OF THE TIME AND PLACE OF THE HEARING, THE MANNER IN WHICH A WRITTEN

RESPONSE TO THE APPLICATION MUST BE FILED AND THE DATE BY WHICH A WRITTEN

RESPONSE TO THE PETITION MUST BE FILED FOR CONSIDERATION BY THE COURT.

4. A TRANSFEREE WHO COMMENCES AN ACTION PURSUANT TO SUBSECTION 1 MUST PROVIDE

TO THE COURT WITH THE PROPOSED AGREEMENT A DISCLOSURE SETTING FORTH:

(A) THE AMOUNTS AND DUE DATES OF THE PAYMENTS UNDER THE STRUCTURED SETTLEMENT

PROPOSED TO BE TRANSFERRED;

(B) THE AGGREGATE AMOUNT OF THE PROPOSED PAYMENTS TO BE TRANSFERRED;

(C) THE AMOUNT TO BE PAID TO THE PAYEE FOR THE TRANSFER BEFORE DEDUCTING ANY

EXPENSES;

(D) AN ITEMIZED LIST OF ALL EXPENSES THAT THE PAYEE WILL BE REQUIRED TO PAY

OTHER THAN ATTORNEY'S FEES AND WHICH WILL BE DEDUCTED FROM THE AMOUNT PAID TO

THE PAYEE FOR THE TRANSFER, INCLUDING, WITHOUT LIMITATION, ANY COMMISSION OWED

TO A BROKER, SERVICE CHARGES, APPLICATION OR PROCESSING FEES, COSTS OF CLOSING

ON THE AGREEMENT, FILING OR ADMINISTRATIVE CHARGES AND FEES PAID TO A NOTARY

PUBLIC;

(E) THE AMOUNT TO BE PAID TO THE PAYEE FOR THE TRANSFER AFTER DEDUCTING THE

EXPENSES;

(F) THE AMOUNT OF ANY LIQUIDATED DAMAGES WHICH THE PAYEE IS REQUIRED TO PAY IF

HE BREACHES THE TRANSFER AGREEMENT;

(G) THE DISCOUNTED PRESENT VALUE OF THE PAYMENTS UNDER THE STRUCTURED

SETTLEMENT THAT ARE PROPOSED TO BE TRANSFERRED AND THE DISCOUNT RATE USED TO

DETERMINE THAT VALUE; AND

(H) IF ADVERSE TAX CONSEQUENCES EXIST, A STATEMENT WHICH INFORMS THE PAYEE

THAT SUCH A TRANSFER MAY SUBJECT HIM TO ADVERSE TAX CONSEQUENCES WITH REGARD TO

THE PAYMENT OF FEDERAL INCOME TAX.

5. COMPLIANCE WITH THE REQUIREMENTS SET FORTH IN THIS SECTION MAY NOT BE

WAIVED.

6. AS USED IN THIS SECTION:

(A) "ANNUITY ISSUER" MEANS AN INSURER WHO HAS ISSUED A CONTRACT TO FUND

PERIODIC PAYMENTS UNDER A STRUCTURED SETTLEMENT.

(B) "DEPENDENTS" INCLUDE, WITHOUT LIMITATION, THE SPOUSE OF A PAYEE, ANY MINOR

CHILD OF A PAYEE AND ANY OTHER PERSON FOR WHOM THE PAYEE IS LEGALLY OBLIGATED

TO PROVIDE SUPPORT, INCLUDING, WITHOUT LIMITATION, ALIMONY;

(C) "INDEPENDENT PROFESSIONAL ADVICE" MEANS ADVICE OF AN ATTORNEY, CERTIFIED

PUBLIC ACCOUNTANT, ACTUARY OR OTHER LICENSED PROFESSIONAL ADVISER;

(D) "INTERESTED PARTIES" MEANS THE PAYEE, ANY BENEFICIARY IRREVOCABLY

DESIGNATED UNDER THE ANNUITY CONTRACT TO RECEIVE PAYMENTS FOLLOWING THE DEATH

OF THE PAYEE, THE ANNUITY ISSUER, ANY PERSON WHO IS OBLIGATED TO MAKE PAYMENTS

PURSUANT TO THE STRUCTURED SETTLEMENT AND ANY OTHER PARTY WHO HAS CONTINUING

RIGHTS OR OBLIGATIONS UNDER THE STRUCTURED SETTLEMENT;

(E) "PAYEE" MEANS A PERSON WHO IS RECEIVING TAX-FREE PAYMENTS UNDER A

STRUCTURED SETTLEMENT AND PROPOSES TO MAKE A TRANSFER OF THE RIGHT TO RECEIVE

PAYMENTS UNDER THAT STRUCTURED SETTLEMENT;

(F) "PERIODIC PAYMENTS" INCLUDES, WITHOUT LIMITATION, BOTH RECURRING PAYMENTS

AND SCHEDULED FUTURE LUMP SUM PAYMENTS;

(G) "SETTLED CLAIM" MEANS THE ORIGINAL TORT CLAIM OR WORKERS' COMPENSATION

CLAIM RESOLVED BY A STRUCTURED SETTLEMENT.

(H) "STRUCTURED SETTLEMENT" MEANS AN ARRANGEMENT FOR PERIODIC PAYMENT OF

DAMAGES FOR PERSONAL INJURIES OR SICKNESS ESTABLISHED BY SETTLEMENT OR JUDGMENT

IN RESOLUTION OF A TORT CLAIM OR FOR PERIODIC PAYMENTS IN SETTLEMENT OF A

WORKERS' COMPENSATION CLAIM;

(I) "TRANSFER" MEANS ANY SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER

ALIENATION OR ENCUMBRANCE BY A PAYEE FOR CONSIDERATION OF THE RIGHT TO RECEIVE

PAYMENTS PURSUANT TO A STRUCTURED SETTLEMENT; AND

(J) "TRANSFEREE" MEANS A PARTY ACQUIRING OR PROPOSING TO ACQUIRE THE RIGHT TO

PAYMENTS PURSUANT TO A STRUCTURED SETTLEMENT THROUGH A TRANSFER.

Sec. 2. NRS 104.9406 is hereby amended to read as follows:

104.9406 1. Subject to subsections 2 to 8, inclusive, an account debtor on an

account, chattel paper or a payment intangible may discharge its obligation by

paying the assignor until, but not after, the account debtor receives a

notification, authenticated by the assignor or the assignee, that the amount

due or to become due has been assigned and that payment is to be made to the

assignee. After receipt of the notification, the account debtor may discharge

its obligation by paying the assignee and may not discharge the obligation by

paying the assignor.

2. Subject to subsection 8, notification is ineffective under subsection 1:

(a) If it does not reasonably identify the rights assigned;

(b) To the extent that an agreement between an account debtor and a seller of a

payment intangible limits the account debtor's duty to pay a person other than

the seller and the limitation is effective under law other than this article; or

 

 

(c) At the option of an account debtor, if the notification notifies the

account debtor to make less than the full amount of any installment or other

periodic payment to the assignee, even if:

(1) Only a portion of the account, chattel paper or payment intangible has been

assigned to that assignee;

(2) A portion has been assigned to another assignee; or

(3) The account debtor knows that the assignment to that assignee is limited.

3. Subject to subsection 8, if requested by the account debtor, an assignee

shall seasonably furnish reasonable proof that the assignment has been made.

Unless the assignee complies, the account debtor may discharge its obligation

by paying the assignor, even if the account debtor has received a notification

under subsection 1.

4. Except as otherwise provided in subsection 5 and NRS 104.9407 and 104A.2303,

and subject to subsection 8, a term in an agreement between an

account debtor and an assignor or in a promissory note is ineffective to the

extent that it:

(a) Prohibits, restricts or requires the consent of the account debtor or

person obligated on the promissory note to the assignment or transfer of, or

the creation, attachment, perfection or enforcement of a security interest in,

the account, chattel paper, payment intangible or promissory note; or

(b) Provides that the assignment or transfer, or the creation, attachment,

perfection or enforcement of the security interest may give rise to a default,

breach, right of recoupment, claim, defense, termination, right of termination,

or remedy under the account, chattel paper, payment intangible or promissory

note.

5. Subsection 4 does not apply to the sale of a payment intangible or

promissory note.

6. Subject to subsections 7 and 8, a rule of law, statute, or regulation, that

prohibits, restricts, or requires the consent of a government, governmental

body or official, or account debtor to the assignment or transfer of, or

creation of a security interest in, an account or chattel paper is ineffective

to the extent that the rule of law, statute or regulation:

(a) Prohibits, restricts, or requires the consent of the government,

governmental body or official, or account debtor to the assignment or transfer

of, or the creation, attachment, perfection, or enforcement of a security

interest in, the account or chattel paper; or

 

 

 

(b) Provides that the assignment or transfer, or the creation, attachment,

perfection, or enforcement of the security interest may give rise to a default,

breach, right of recoupment, claim, defense, termination, right of termination,

or remedy under the account or chattel paper.

7. Subject to subsection 8, an account debtor may not waive or vary its option

under paragraph (c) of subsection 2.

8. This section is subject to law other than this article which establishes a

different rule for an account debtor who is an individual and who incurred the

obligation primarily for personal, family or household purposes.

9. This section does not apply to an assignment of a health- care-insurance

receivable . OR TO A TRANSFER OF A RIGHT TO RECEIVE PAYMENTS PURSUANT TO

SECTION 1 OF THIS ACT.

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: Montana Code Annotated 33-20-1401

Enacted April 21, 2005

Effective 10/1/2005

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections. TITLE 33. INSURANCE AND INSURANCE COMPANIES
CHAPTER 20. LIFE INSURANCE
PART 14. STRUCTURED SETTLEMENT PROTECTION

33-20-1401. Short title

This part may be cited as the "Structured Settlement Protection Act".

History: En. Sec. 1, Ch. 351, L. 2005.

33-20-1402. Definitions

As used in this part, unless the context requires otherwise, the following definitions apply:

(1) "Annuity issuer" means an insurer that has issued a contract to fund periodic payments under a structured settlement.

(2) "Consideration" has the meaning provided in 28-2-801.

(3) "Dependent" means a payee's spouse, a minor child of the payee, or any person for whom the payee is legally obligated to provide support, including spousal maintenance.

(4) "Discounted present value" means the present value of future payments determined by discounting the future payments to the present using the most recently published applicable federal rate for determining the present value of an annuity, as issued by the United States internal revenue service.

(5) "Gross advance amount" means the sum payable to the payee or to the payee's account as consideration for a transfer of a structured settlement payment right before any reduction for a transfer expense or any other deduction is made from the sum.

(6) "Independent professional advice" means advice of an attorney, a certified public accountant, an actuary, or any licensed professional adviser.

(7) "Interested party" means, with respect to a structured settlement, the payee, any beneficiary irrevocably designated under the annuity contract to receive a payment after the payee's death, the annuity issuer, the structured settlement obligor, or any other party that has a continuing right or obligation under the structured settlement.

(8) "Net advance amount" means the gross advance amount minus the aggregate amount of the actual and estimated transfer expenses required to be disclosed under 33-20-1403(5).

(9) "Payee" means an individual who is receiving tax-free payments under a structured settlement and proposes to make a transfer of the payment rights.

(10) "Periodic payment" includes both a recurring payment and any scheduled future lump-sum payments.

(11) "Qualified assignment agreement" means an agreement providing for a qualified assignment, as defined for federal tax purposes, of the liability to make periodic payments under a structured settlement.

(12) "Responsible administrative authority" means, with respect to a structured settlement, any government authority vested by law with exclusive jurisdiction over the settled claim resolved by the structured settlement.

(13) "Settled claim" means the original tort claim.

(14) "Structured settlement" means an arrangement for periodic payment of damages for personal injuries or sickness established by settlement or judgment in resolution of a tort claim.

(15) "Structured settlement agreement" means the written agreement, judgment, stipulation, or release embodying the terms of a structured settlement.

(16) "Structured settlement obligor" means, with respect to a structured settlement, the party that has the continuing obligation to make periodic payments to the payee under a structured settlement agreement or a qualified assignment agreement.

(17) "Structured settlement payment right" means the right to receive periodic payments under a structured settlement, whether from the structured settlement obligor or the annuity issuer, when:

(a) (i) the payee is domiciled in this state; or

(ii) the domicile or principal place of business of the structured settlement obligor or the annuity issuer is located in this state;

(b) a court or responsible administrative authority in this state approved the structured settlement agreement; or

(c) the structured settlement agreement is expressly governed by the laws of this state.

(18) "Terms of the structured settlement" means, with respect to a structured settlement, the terms of the structured settlement agreement, the annuity contract, a qualified assignment agreement, or any order or other approval of a court or responsible administrative authority or other government authority that authorized or approved the structured settlement.

(19) (a) "Transfer" means a sale, assignment, pledge, hypothecation, or other alienation or encumbrance of a structured settlement payment right made by a payee for consideration.

(b) The term does not include the creation or perfection of a security interest in a structured settlement payment right under a blanket security agreement entered into with an insured depository institution in the absence of any action:

(i) to redirect the structured settlement payment to the insured depository institution or its agent or successor in interest; or

(ii) to otherwise enforce the blanket security interest against the structured settlement payment right.

(20) "Transfer agreement" means the agreement providing for a transfer of a structured settlement payment right.

(21) (a) "Transfer expenses" means all expenses of a transfer that are:

(i) required under the transfer agreement to be paid by the payee; or

(ii) deducted from the gross advance amount, including without limitation any court filing fee, attorney fee, escrow fee, lien recordation fee, judgment and lien search fee, finder's fee, commission, and other payments to a broker or other intermediary.

(b) Transfer expenses do not include a payee's preexisting obligations that are payable on the payee's account from the proceeds of a transfer.

(22) "Transferee" means a party acquiring or proposing to acquire a structured settlement payment right through a transfer.

33-20-1403. Disclosure to payee

No less than 3 days prior to the date on which a payee signs a transfer agreement, the transferee shall provide to the payee a written disclosure statement separate from the transfer agreement that sets forth in bold type no smaller than 14 points:

(1) the amounts and the due dates of the structured settlement payment to be transferred;

(2) the aggregate amount of the amounts in subsection (1);

(3) the discounted present value of the payments to be transferred, which must be identified as:

(a) the calculation of the present value of the transferred structured settlement payment under federal standards for valuing annuities; and

(b) the amount of the applicable federal rate used in calculating the discounted present value;

(4) the gross advance amount;

(5) an itemized list of all applicable transfer expenses, other than attorney fees and related disbursements, based on the transferee's best estimate of the amount of fees and disbursements payable in connection with the transferee's application for approval of the transfer;

(6) the net advance amount;

(7) the amount of any penalty or liquidated damages payable by the payee in the event of a breach of the transfer agreement by the payee; and

(8) a statement that the payee has the right to cancel the transfer agreement without penalty or further obligation no later than the third business day after the date on which the payee signs the agreement.

33-20-1404. Transfer of structured settlement payment right -- conditions

A direct or indirect transfer of a structured settlement payment right is not effective and a structured settlement obligor or annuity issuer is not required to make a payment directly or indirectly to a transferee of a structured settlement payment right unless a final court order or order of a responsible administrative authority has approved the transfer in advance based on written findings by the court or responsible administrative authority that:

(1) the transfer is in the best interest of the payee, taking into account the welfare and support of the payee's dependents, if any;

(2) the payee has been advised in writing by the transferee to seek independent professional advice regarding the transfer and either has received independent professional advice or knowingly waived independent professional advice in writing; and

(3) the transfer does not contravene any applicable statute or the order of any court or other government authority.

33-20-1405. Obligations after transfer

After the transfer of a structured settlement payment right pursuant to this part:

(1) the structured settlement obligor and the annuity issuer are discharged and released from liability for the transferred payments to all parties except to the transferee;

(2) the transferee is liable to the structured settlement obligor and the annuity issuer:

(a) if the transfer contravenes the terms of the structured settlement for any tax incurred by the structured settlement obligor or annuity issuer as a consequence of the transfer; and

(b) for any other liability or cost, including reasonable costs and attorney fees, arising:

(i) from compliance by the structured settlement obligor and annuity issuer with the order of the court or responsible administrative authority; or

(ii) as a consequence of the transferee's failure to comply with this part; and

(3) neither the structured settlement obligor nor the annuity issuer may be required to divide a periodic payment between a payee and a transferee or assignee or between two or more transferees or assignees.

33-20-1406. Additional transfers

After the transfer of a structured settlement payment right pursuant to this part, any further transfer by the payee is subject to all of the requirements of this part.

33-20-1407. Jurisdiction -- notice

(1) A transferee may apply under this part for approval of a transfer of a structured settlement payment right:

(a) in the county in which the payee resides;

(b) in the county in which the structured settlement obligor or the annuity issuer maintains a principal place of business; or

(c) in any court or before any responsible administrative authority that approved the structured settlement agreement.

(2) Not less than 20 days prior to a scheduled hearing on an application for approval of a transfer of a structured settlement payment right under 33-20- 1404, the transferee shall file with the court or responsible administrative authority and serve on all interested parties a notice of the proposed transfer and the application for an authorized transfer. The notice must include the following:

(a) a copy of the transferee's application;

(b) a copy of the transfer agreement;

(c) a copy of the disclosure statement required under 33-20-1403;

(d) a listing of each of the payee's dependents, if any, together with the age of each dependent;

(e) notification that any interested party is entitled to support, oppose, or otherwise respond to the transferee's application either in person or by counsel by submitting written comments to the court or responsible administrative authority or by participating in the hearing; and

(f) notification of the time and the place of the hearing and notification of the manner in which and the time by which written responses to the application must be filed. The filing deadline may not be less than 15 days after the transferee's notice has been served.

33-20-1408. Waiver not allowed

A payee may not waive the provisions of this part.

33-20-1409. Disputes -- entry of judgment

(1) A transfer agreement entered into on or after October 1, 2005, by a payee who resides in this state must provide that disputes under the transfer agreement, including a claim that the payee has breached the agreement, must be determined in this state under the laws of this state.

(2) A transfer agreement may not authorize the transferee or any other party to confess judgment or consent to entry of judgment against the payee.

History: En. Sec. 9, Ch. 351, L. 2005.

33-20-1410. Contingent payment conditions

A transfer of a structured settlement payment right may not extend to a payment that is contingent upon the life of a payee unless prior to the date on which the payee signs the transfer agreement the transferee has established and agreed to maintain procedures reasonably satisfactory to the annuity issuer and the structured settlement obligor for:

(1) periodically confirming the payee's survival; and

(2) giving the annuity issuer and the structured settlement obligor prompt written notice upon the payee's death.

 

33-20-1411. Responsibility for compliance -- liability

(1) Compliance with the requirements in 33-20-1403 and fulfillment of the conditions in 33-20-1404 are the sole responsibility of the transferee in any transfer of a structured settlement payment right. Neither the structured settlement obligor nor the annuity issuer bears responsibility for or liability arising from noncompliance with 33-20-1403 or failure to fulfill the conditions of 33-20-1404.

(2) A payee who proposes to make a transfer of a structured settlement payment right may not incur a penalty, forfeit an application fee or other payment, or otherwise incur any liability to the proposed transferee or any assignee based on a failure of a transfer agreement to satisfy the conditions of this part.

33-20-1412. Construction

This part may not be construed to authorize a transfer of a structured settlement payment right in contravention of any law or to imply that any transfer under a transfer agreement entered into prior to October 1, 2005, is valid or invalid.

History: En. Sec. 12, Ch. 351, L. 2005.

<General Materials (GM) - References, Annotations, or Tables>

MCA 33-20-1412, MT ST 33-20-1412

 

Current through the 2005 Regular Session of the 59th Legislature

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: R.R.S. Neb. § 25-3103 (NE L.B. 55)

Enacted 4/4/2001

Effective 7/1/2001

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

Section 1. SECTIONS 1 TO 7 OF THIS ACT SHALL BE KNOWN AND MAY BE CITED AS THE

STRUCTURED SETTLEMENTS TRANSFERS PROTECTION ACT.

Sec. 2. THE PURPOSE OF THE STRUCTURED SETTLEMENTS TRANSFERS PROTECTION ACT IS

TO PROTECT STRUCTURED SETTLEMENT RECIPIENTS INVOLVED IN THE PROCESS OF

TRANSFERRING STRUCTURED SETTLEMENT PAYMENT RIGHTS. THE ACT DOES NOT APPLY TO

STRUCTURED SETTLEMENTS OF CLAIMS FOR WORKERS' COMPENSATION BENEFITS.

Sec. 3. FOR PURPOSES OF THE STRUCTURED SETTLEMENTS TRANSFERS PROTECTION ACT:

(1) ANNUITY ISSUER MEANS AN INSURER THAT HAS ISSUED A CONTRACT TO BE USED TO

FUND PERIODIC PAYMENTS UNDER A STRUCTURED SETTLEMENT;

(2) APPLICABLE FEDERAL RATE MEANS THE MOST RECENTLY PUBLISHED APPLICABLE RATE

USED TO DETERMINE THE PRESENT VALUE OF AN ANNUITY, AS ISSUED BY THE INTERNAL

REVENUE SERVICE PURSUANT TO SECTION 7520 OF THE INTERNAL REVENUE CODE AS

DEFINED IN SECTION 49-801.01;

(3) DEPENDENT MEANS A PAYEE'S SPOUSE AND MINOR CHILDREN AND ANY OTHER FAMILY

MEMBER AND OTHER PERSON FOR WHOM THE PAYEE IS LEGALLY OBLIGATED TO PROVIDE

SUPPORT, INCLUDING SPOUSAL MAINTENANCE;

(4) DISCOUNT OR FINANCE CHARGE MEANS THE SUM OF ALL CHARGES PAYABLE DIRECTLY

OR INDIRECTLY FROM ASSIGNED STRUCTURED SETTLEMENT PAYMENTS AND IMPOSED DIRECTLY OR INDIRECTLY BY THE TRANSFEREE AS AN INCIDENT TO A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS. DISCOUNT OR FINANCE CHARGE INCLUDES INTEREST CHARGES, DISCOUNTS, AND OTHER COMPENSATION FOR THE TIME VALUE OF MONEY, ALL APPLICATION, ORIGINATION, PROCESSING, UNDERWRITING, CLOSING, FILING, AND NOTARY

FEES AND ALL SIMILAR CHARGES, AND ALL CHARGES FOR COMMISSIONS OR BROKERAGE

SERVICES. DISCOUNT OR FINANCE CHARGE DOES NOT INCLUDE ANY FEE OR OTHER

OBLIGATION INCURRED BY A PAYEE TO OBTAIN INDEPENDENT PROFESSIONAL ADVICE

CONCERNING A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS OR ANY CHARGES,

COMMISSIONS, COSTS, BROKERAGE FEES, OR OTHER FEES WHICH THE PAYEE HAS AGREED TO

PAY TO A NONAFFILIATED THIRD PARTY IN CONNECTION WITH THE TRANSFER;

 

 

(5) DISCOUNTED PRESENT VALUE MEANS, WITH RESPECT TO A PROPOSED TRANSFER OF

STRUCTURED SETTLEMENT PAYMENT RIGHTS, THE FAIR PRESENT VALUE OF FUTURE

PAYMENTS, AS DETERMINED BY DISCOUNTING THE PAYMENTS TO THE PRESENT USING THE

MOST RECENTLY PUBLISHED APPLICABLE FEDERAL RATE USED TO DETERMINE THE PRESENT

VALUE OF AN ANNUITY AS THE DISCOUNT RATE;

(6) INTERESTED PARTIES MEANS, WITH RESPECT TO ANY STRUCTURED SETTLEMENT:

(A) THE PAYEE;

(B) ANY BENEFICIARY IRREVOCABLY DESIGNATED UNDER THE ANNUITY CONTRACT TO

RECEIVE PAYMENTS FOLLOWING THE PAYEE'S DEATH OR, IF SUCH DESIGNATED BENEFICIARY

IS A MINOR, THE DESIGNATED BENEFICIARY'S PARENT OR GUARDIAN;

(C) THE ANNUITY ISSUER;

(D) THE STRUCTURED SETTLEMENT OBLIGOR; AND

(E) ANY OTHER PARTY THAT HAS CONTINUING RIGHTS OR OBLIGATIONS UNDER THE

STRUCTURED SETTLEMENT;

(7) PAYEE MEANS A NEBRASKA RESIDENT WHO IS RECEIVING TAX-FREE PAYMENTS UNDER A

STRUCTURED SETTLEMENT AND PROPOSES TO MAKE A TRANSFER OF PAYMENT RIGHTS UNDER

THE STRUCTURED SETTLEMENT. PAYEE DOES NOT INCLUDE A NEBRASKA RESIDENT WHO IS

RECEIVING PAYMENTS UNDER A STRUCTURED SETTLEMENT OF A WORKERS' COMPENSATION

CLAIM;

(8) QUALIFIED ASSIGNMENT AGREEMENT MEANS AN AGREEMENT PROVIDING FOR A

QUALIFIED ASSIGNMENT WITHIN THE MEANING OF SECTION 130 OF THE INTERNAL REVENUE

CODE AS DEFINED IN SECTION 49-801.01;

(9) STRUCTURED SETTLEMENT MEANS AN ARRANGEMENT FOR PERIODIC PAYMENT OF DAMAGES FOR PERSONAL INJURIES OR SICKNESS ESTABLISHED BY A SETTLEMENT, AGREEMENT, OR JUDGMENT IN RESOLUTION OF A TORT CLAIM;

(10) STRUCTURED SETTLEMENT OBLIGOR MEANS THE PARTY THAT HAS THE OBLIGATION TO

MAKE CONTINUING PERIODIC PAYMENTS TO THE PAYEE UNDER A STRUCTURED SETTLEMENT

AGREEMENT OR A QUALIFIED ASSIGNMENT AGREEMENT;

(11) STRUCTURED SETTLEMENT PAYMENT RIGHTS MEANS RIGHTS TO RECEIVE PERIODIC

PAYMENTS, INCLUDING LUMP-SUM PAYMENTS UNDER A STRUCTURED SETTLEMENT, WHETHER

FROM THE SETTLEMENT OBLIGOR OR THE ANNUITY ISSUER IF THE PAYEE IS A RESIDENT IN

THE STATE;

(12) TRANSFER MEANS A SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION, OR OTHER FORM

OF ALIENATION OR ENCUMBRANCE MADE BY A PAYEE FOR CONSIDERATION;

(13) TRANSFER AGREEMENT MEANS THE AGREEMENT PROVIDING FOR TRANSFER OF

STRUCTURED SETTLEMENT PAYMENT RIGHTS FROM A PAYEE TO A TRANSFEREE; AND

(14) TRANSFEREE MEANS A PERSON WHO IS RECEIVING OR WILL RECEIVE STRUCTURED

SETTLEMENT PAYMENT RIGHTS RESULTING FROM A TRANSFER.

 

Sec. 4. (1) NO DIRECT OR INDIRECT TRANSFER OF STRUCTURED SETTLEMENT PAYMENT

RIGHTS IS EFFECTIVE, AND NO STRUCTURED SETTLEMENT OBLIGOR OR ANNUITY ISSUER IS

REQUIRED TO MAKE A PAYMENT DIRECTLY OR INDIRECTLY TO A TRANSFEREE OF

STRUCTURED SETTLEMENT PAYMENT RIGHTS, UNLESS THE TRANSFER HAS BEEN AUTHORIZED

IN ADVANCE IN A FINAL ORDER OF A COURT OF COMPETENT JURISDICTION BASED ON THE

COURT'S WRITTEN EXPRESS FINDINGS THAT:

(A) THE TRANSFER COMPLIES WITH THE REQUIREMENTS OF THE STRUCTURED

SETTLEMENTS TRANSFERS PROTECTION ACT;

(B) THE TRANSFEREE HAS PROVIDED TO THE PAYEE A DISCLOSURE STATEMENT IN NO

SMALLER THAN FOURTEEN-POINT TYPE SPECIFYING:

(I) THE AMOUNTS AND DUE DATES OF THE STRUCTURED SETTLEMENT PAYMENTS TO BE

TRANSFERRED;

(II) THE AGGREGATE AMOUNT OF THE PAYMENTS;

(III) THE DISCOUNTED PRESENT VALUE OF THE PAYMENTS, TOGETHER WITH THE DISCOUNT

RATE USED IN DETERMINING THE DISCOUNTED PRESENT VALUE;

(IV) THE GROSS AMOUNT PAYABLE TO THE PAYEE IN EXCHANGE FOR THE PAYMENTS;

(V) AN ITEMIZED LISTING OF ALL BROKERS' COMMISSIONS, SERVICE CHARGES,

APPLICATION FEES, PROCESSING FEES, CLOSING COSTS, FILING FEES, REFERRAL FEES,

ADMINISTRATIVE FEES, LEGAL FEES, NOTARY FEES, AND OTHER COMMISSIONS, FEES,

COSTS, EXPENSES, AND CHARGES PAYABLE BY THE PAYEE OR DEDUCTIBLE FROM THE GROSS

AMOUNT OTHERWISE PAYABLE TO THE PAYEE;

(VI) THE NET AMOUNT PAYABLE TO THE PAYEE AFTER DEDUCTION OF ALL COMMISSIONS,

FEES, COSTS, EXPENSES, AND CHARGES DESCRIBED IN SUBDIVISION (1)(B)(V) OF THIS

SECTION; (VII) THE QUOTIENT, EXPRESSED AS A PERCENTAGE, OBTAINED BY

DIVIDING THE NET PAYMENT AMOUNT BY THE DISCOUNTED PRESENT VALUE OF THE

PAYMENTS. SUCH QUOTIENT SHALL BE DISCLOSED IN THE FOLLOWING STATEMENT "THE NET

AMOUNT THAT YOU WILL RECEIVE FROM US IN EXCHANGE FOR YOUR FUTURE STRUCTURED

SETTLEMENT PAYMENTS REPRESENTS ....% OF THE ESTIMATED CURRENT VALUE OF THE

PAYMENTS."; (VIII) THE EFFECTIVE ANNUAL INTEREST RATE. SUCH RATE SHALL BE

DISCLOSED IN THE FOLLOWING STATEMENT "BASED ON THE AMOUNT THAT YOU WILL RECEIVE

FROM US AND THE AMOUNTS AND TIMING OF THE STRUCTURED SETTLEMENT PAYMENTS THAT

YOU ARE TURNING OVER TO US, YOU WILL, IN EFFECT, BE PAYING INTEREST TO US AT A

RATE OF ....% PER YEAR."; AND

(IX) THE AMOUNT OF ANY PENALTY AND THE AGGREGATE AMOUNT OF ANY LIQUIDATED

DAMAGES, INCLUDING PENALTIES, PAYABLE BY THE PAYEE IN THE EVENT OF A BREACH OF

THE TRANSFER AGREEMENT BY THE PAYEE;

(C) THE TRANSFER IS IN THE BEST INTERESTS OF THE PAYEE, TAKING INTO ACCOUNT

THE WELFARE AND SUPPORT OF THE PAYEE'S DEPENDENTS, AND THE NET AMOUNT PAYABLE

TO THE PAYEE IS NOT UNFAIR, UNJUST, OR UNREASONABLE UNDER EXISTING

CIRCUMSTANCES;

(D) THE PAYEE HAS RECEIVED, OR WAIVED HIS OR HER RIGHT TO RECEIVE, INDEPENDENT

PROFESSIONAL ADVICE REGARDING THE LEGAL, TAX, AND FINANCIAL IMPLICATIONS OF THE

TRANSFER;

(E) THE TRANSFEREE HAS GIVEN WRITTEN NOTICE OF THE TRANSFEREE'S NAME, ADDRESS,

AND TAXPAYER IDENTIFICATION NUMBER TO THE ANNUITY ISSUER AND THE STRUCTURED

SETTLEMENT OBLIGOR AND HAS FILED A COPY OF THE NOTICE WITH THE COURT;

(F) THE TRANSFER AGREEMENT PROVIDES THAT ANY DISPUTES BETWEEN THE PARTIES WILL

BE GOVERNED BY THE LAWS OF NEBRASKA AND THAT NEBRASKA IS THE PROPER PLACE OF

VENUE TO BRING ANY CAUSE OF ACTION ARISING OUT OF A BREACH OF THE AGREEMENT;

AND

(G) THE TRANSFER DOES NOT CONTRAVENE ANY APPLICABLE STATUTE OR ORDER OF ANY

COURT OR OTHER GOVERNMENT AUTHORITY.

(2) THE COURT MAY NOT AUTHORIZE A TRANSFER IF THE COURT MAKES AN EXPRESS

WRITTEN FINDING THAT THE TRANSFER CONTRAVENES THE PUBLIC POLICY OF THIS STATE.

(3) THE TRANSFER AGREEMENT SHALL ALSO PROVIDE THAT THE PARTIES AGREE TO THE

JURISDICTION OF ANY NEBRASKA COURT OF COMPETENT JURISDICTION. IF THE TRANSFER

WOULD CONTRAVENE THE TERMS OF THE STRUCTURED SETTLEMENT OR THE STANDARDS SET

FORTH IN SUBSECTION (1) OR (2) OF THIS SECTION, THE COURT MAY GRANT, DENY, OR

IMPOSE CONDITIONS UPON THE PROPOSED TRANSFER AS THE COURT DEEMS JUST AND PROPER

UNDER THE FACTS AND CIRCUMSTANCES, UPON THE FILING OF A WRITTEN OBJECTION BY

ANY INTERESTED PARTY AND AFTER CONSIDERING THE OBJECTION AND ANY RESPONSE TO

IT. ANY ORDER APPROVING A TRANSFER MUST REQUIRE THAT THE TRANSFEREE INDEMNIFY

THE ANNUITY ISSUER AND THE STRUCTURED SETTLEMENT OBLIGOR FOR ANY LIABILITY

INCLUDING REASONABLE COSTS AND ATTORNEY'S FEES ARISING FROM COMPLIANCE BY THE

ISSUER OR OBLIGOR WITH THE ORDER OF THE COURT.

(4) A PROVISION IN A TRANSFER AGREEMENT GIVING A TRANSFEREE POWER TO CONFESS

JUDGMENT AGAINST A PAYEE IS UNENFORCEABLE TO THE EXTENT THE AMOUNT OF THE

JUDGMENT WOULD EXCEED THE AMOUNT PAID BY THE TRANSFEREE TO THE PAYEE, LESS ANY

PAYMENTS RECEIVED FROM THE STRUCTURED SETTLEMENT OBLIGOR OR THE PAYEE.

(5) WITH RESPECT TO A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS A

TRANSFEREE MAY NOT CONTRACT FOR OR RECEIVE A DISCOUNT OR FINANCE CHARGE THAT

WOULD RESULT IN AN EFFECTIVE ANNUAL RATE IN EXCESS OF THE MAXIMUM INTEREST RATE

PER YEAR APPLICABLE IN NEBRASKA TO A CONSUMER LOAN AS SET FORTH IN SECTION

45-101.03.

Sec. 5. (1) THE NEBRASKA COURT THAT APPROVED THE STRUCTURED SETTLEMENT

AGREEMENT HAS JURISDICTION OVER AN APPLICATION FOR AUTHORIZATION OF A

TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS. IF A NEBRASKA COURT DID NOT

APPROVE THE STRUCTURED SETTLEMENT AGREEMENT, A PERSON SHALL FILE AN APPLICATION

UNDER SECTION 4 OF THIS ACT IN THE DISTRICT COURT FOR THE COUNTY IN WHICH THE

PAYEE RESIDES.

(2) NOT LESS THAN TWENTY DAYS BEFORE THE SCHEDULED HEARING ON AN APPLICATION

FOR AUTHORIZATION OF A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS UNDER

SECTION 4 OF THIS ACT, THE TRANSFEREE SHALL FILE WITH THE COURT AND ALL

INTERESTED PARTIES A NOTICE OF THE PROPOSED TRANSFER AND THE APPLICATION FOR

ITS AUTHORIZATION. THE NOTICE SHALL INCLUDE:

(A) A COPY OF THE TRANSFEREE'S APPLICATION TO THE COURT;

(B) A COPY OF THE TRANSFER AGREEMENT;

(C) A COPY OF THE DISCLOSURE STATEMENT REQUIRED UNDER SECTION 4 OF THIS ACT;

AND

(D) NOTICE THAT AN INTERESTED PARTY IS ENTITLED TO SUPPORT, OPPOSE, OR

OTHERWISE RESPOND TO THE TRANSFEREE'S APPLICATION, EITHER IN PERSON OR BY

COUNSEL, BY SUBMITTING WRITTEN COMMENTS TO THE COURT OR BY PARTICIPATING IN THE

HEARING, AND NOTIFICATION OF THE TIME AND PLACE OF THE HEARING AND NOTIFICATION

OF THE MANNER IN WHICH AND THE TIME BY WHICH WRITTEN RESPONSES TO THE

APPLICATION MUST BE FILED IN ORDER TO BE CONSIDERED BY THE COURT. WRITTEN

RESPONSES TO THE APPLICATION SHALL BE FILED WITHIN FIFTEEN DAYS AFTER SERVICE

OF THE TRANSFEREE'S NOTICE.

Sec. 6. THE PROVISIONS OF SECTIONS 3 TO 5 OF THIS ACT MAY NOT BE WAIVED. NO

PAYEE WHO PROPOSES TO MAKE A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS

SHALL INCUR A PENALTY, FORFEIT AN APPLICATION FEE OR OTHER PAYMENT, OR

OTHERWISE INCUR ANY LIABILITY TO THE PROPOSED TRANSFEREE BASED ON THE FAILURE

OF THE TRANSFER TO SATISFY THE CONDITIONS OF SECTION 4 OF THIS ACT.

Sec. 7. THE STRUCTURED SETTLEMENTS TRANSFERS PROTECTION ACT APPLIES TO ANY

TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS UNDER A TRANSFER AGREEMENT

ENTERED INTO ON OR AFTER JANUARY 1, 2002.

Sec. 8. Section 9-109, Uniform Commercial Code, is amended to read:

9-109. Scope.

(a) Except as otherwise provided in subsections (c) and (d), this article

applies to:

(1) a transaction, regardless of its form, that creates a security interest in

personal property or fixtures by contract;

(2) an agricultural lien;

(3) a sale of accounts, chattel paper, payment intangibles, or promissory notes;

(4) a consignment;

(5) a security interest arising under section 2-401, 2-505, 2-711(3), or

2A-508(5), as provided in section 9-110; and

(6) a security interest arising under section 4-210 or 5-118.

(b) The application of this article to a security interest in a secured

obligation is not affected by the fact that the obligation is itself secured by

a transaction or interest to which this article does not apply.

(c) This article does not apply to the extent that:

(1) a statute, regulation, or treaty of the United States preempts this article;

 

(2) another statute of this state expressly governs the creation, perfection,

priority, or enforcement of a security interest created by this state or a

governmental unit of this state;

(3) a statute of another state, a foreign country, or a governmental unit of

another state or a foreign country, other than a statute generally applicable

to security interests, expressly governs creation, perfection, priority, or

enforcement of a security interest created by the state, country, or

governmental unit; or

(4) the rights of a transferee beneficiary or nominated person under a letter

of credit are independent and superior under section 5-114.

(d) This article does not apply to:

(1) a landlord's lien, other than an agricultural lien;

(2) a lien, other than an agricultural lien, given by statute or other rule of

law for services or materials, but section 9-333 applies with respect to

priority of the lien;

(3) an assignment of a claim for wages, salary, or other compensation of an

employee;

(4) a sale of accounts, chattel paper, payment intangibles, or promissory

notes as part of a sale of the business out of which they arose;

(5) an assignment of accounts, chattel paper, payment intangibles, or

promissory notes which is for the purpose of collection only;

(6) an assignment of a right to payment under a contract to an assignee that is

also obliged to perform under the contract;

(7) an assignment of a single account, payment intangible, or promissory note

to an assignee in full or partial satisfaction of a preexisting indebtedness;

(8) a transfer of an interest in or an assignment of a claim under a policy of

insurance, other than an assignment by or to a health-care provider of a

health-care-insurance receivable and any subsequent assignment of the right to

payment, but sections 9-315 and 9-322 apply with respect to proceeds and

priorities in proceeds;

(9) an assignment of a right represented by a judgment, other than a judgment

taken on a right to payment that was collateral;

(10) a right of recoupment or set-off, but:

(A) section 9-340 applies with respect to the effectiveness of rights of

recoupment or set-off against deposit accounts; and

(B) section 9-404 applies with respect to defenses or claims of an account

debtor;

(11) the creation or transfer of an interest in or lien on real property,

including a lease or rents thereunder, except to the extent that provision is

made for:

(A) liens on real property in sections 9-203 and 9-308;

(B) fixtures in section 9-334;

(C) fixture filings in sections 9-501, 9-502, 9-512, 9-516, and 9-519; and

(D) security agreements covering personal and real property in section 9-604;

(12) an assignment of a claim arising in tort, other than a commercial tort

claim, but sections 9-315 and 9-322 apply with respect to proceeds and

priorities in proceeds; or

(13) an assignment of a deposit account in a consumer transaction, but sections

9-315 and 9-322 apply with respect to proceeds and priorities in proceeds ; OR

(14)(A) AN ASSIGNMENT OR TRANSFER OF A CLAIM OR RIGHT TO RECEIVE COMPENSATION

FOR PERSONAL INJURIES OR SICKNESS UNDER ANY WORKERS' COMPENSATION, INDUSTRIAL

ACCIDENT, OR SIMILAR LAW OR (B) A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT

RIGHTS ENTERED INTO ON OR AFTER JANUARY 1, 2002, AND SUBJECT TO THE

STRUCTURED SETTLEMENTS TRANSFERS PROTECTION ACT UNLESS THE TRANSFER HAS BEEN

AUTHORIZED IN ADVANCE IN A FINAL ORDER OF A COURT OF COMPETENT JURISDICTION

PURSUANT TO THE ACT.

Sec. 9. This act becomes operative on July 1, 2001.

Sec. 10. Original section 9-109, Uniform Commercial Code, is repealed.

Sec. 11. Since an emergency exists, this act takes effect when passed and

approved according to law.

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: § 407.1060 RSMo. (SB 1)

Enacted 7/13/1999

Effective 8/28/1999

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

Chapter 407
Merchandising Practices
Section 407.1060-1068

Definitions.

407.1060. As used in sections 407.1060 to 407.1068, the following terms mean:

(1) "Annuity issuer", an insurer that has issued an annuity contract to be used to fund periodic payments pursuant to a structured settlement;

(2) "Code", the United States Internal Revenue Code, United States Code Title 26, as amended from time to time;

(3) "Discounted present value", the fair present value of future payments, as determined by discounting such payments to the present using the most recently published applicable federal rate for determining the present value of an annuity, as issued by the United States Internal Revenue Service;

(4) "Disinterested counsel", legal counsel that has no business relationship with any transferee of structured settlement payment rights, will not receive any compensation directly or indirectly from any such transferee in connection with representing the payee, and whose compensation for representing the payee will not be affected by whether the transfer occurs or does not occur;

(5) "Interested parties", with respect to any structured settlement, the payee, any named beneficiary designated in the annuity contract or structured settlement to receive payments following the payee's death, or, if the named beneficiary is a minor, the named beneficiary's parent or guardian, the annuity issuer, and the structured settlement obligor;

(6) "Payee", an individual who is receiving tax-free damage payments pursuant to a structured settlement and who wants to make a transfer of payment rights pursuant to the structured settlement agreement;

(7) "Qualified assignment agreement", an agreement providing for a qualified assignment within the meaning of Section 130 of the Internal Revenue Code, 26 U.S.C. Sec. 130, as amended from time to time;

(8) "Settled claim", the original tort claim resolved by a structured settlement;

(9) "Structured settlement", an arrangement established by:

(a) a. Judgment or agreement in resolution of a tort claim providing for the periodic payment of damages excludable from the gross income of the recipient pursuant to Section 104(a)(2) of the Code; or

b. Agreement for the periodic payment of compensation pursuant to any workers' compensation act that is excludable from the gross income of the recipient pursuant to Section 104(a)(1) of the Code and which may be assigned pursuant to state law; and

(b) Where the periodic payments are:

a. Of the character described in subparagraphs (A) and (B) of Section 130(c)(2) of the Code; and

b. Payable by a person who is a party to the suit or agreement or to the workers' compensation claim or by a person who has assumed the liability for such periodic payments pursuant to a qualified assignment in accordance with Section 130 of the Code;

(10) "Structured settlement obligor", with respect to any structured settlement, the party that has the continuing periodic payment obligation to the payee pursuant to a structured settlement agreement or a qualified assignment agreement;

(11) "Structured settlement payment rights", rights to receive periodic payments, including lump sum payments pursuant to a structured settlement, whether from the settlement obligor or the annuity issuer, where:

(a) The payee is domiciled in this state; or

(b) The structured settlement was approved by a court of this state;

(12) "Transfer", any sale, assignment, pledge, hypothecation, or other form of alienation or encumbrance made for consideration;

(13) "Transfer agreement", the agreement providing for transfer of structured settlement payment rights from a payee to a transferee;

(14) "Transferee", a party acquiring or proposing to acquire structured settlement payment rights through a transfer from a payee.

Structured settlement payment transfers, requirements.

407.1062. No transfer of structured settlement payment rights shall be effective and no structured settlement obligor or annuity issuer shall be required to make any payment directly or indirectly to any transferee of any transfer of structured settlement payment rights unless the transfer has been approved in advance in an order of a court of competent jurisdiction, based on the court's express findings that:

(1) The transfer complies with the requirements of sections 407.1060 to 407.1068 and does not contravene other applicable law;

(2) Not less than ten days prior to the date on which the payee entered into the transfer agreement, the transferee has provided to the payee a disclosure statement in bold type, no smaller than fourteen point, setting forth:

(a) The amounts and due dates of the structured settlement payments to be transferred;

(b) The aggregate amount of the payments;

(c) The discounted present value of the payments, together with the discount rate or rates used in determining the discounted present value;

(d) The gross amount payable to the payee in exchange for the payments; and

(e) An itemized listing of all brokers' commissions, service charges, application or processing fees, closing costs, filing or administrative charges, legal fees, notary fees and other commissions, fees, costs, expenses and charges payable by the payee or deductible from the gross amount otherwise payable to the payee;

(3) The transfer is in the best interest of the payee and the payee's dependents;

(4) The transferee has given written notice of the transferee's name, address and taxpayer identification number to all interested parties and has filed a copy of the notice with the court;

(5) The payee has consented in writing to the transfer;

(6) The payee has been represented by disinterested counsel in connection with the transfer or the payee understands the nature of the transaction and the economic consequences of the transaction; and

(7) The payment to be made to the payee by the transferee is equal to the fair market value of the structured settlement rights being transferred.

Approval by court, notice.

407.1064. 1. An application pursuant to sections 407.1060 to 407.1068 for approval of a transfer of structured settlement payment rights may be brought in the circuit court in the county in which the payee is domiciled, or in any court which approved the structured settlement agreement.

2. Not less than twenty days prior to the scheduled hearing on any application for court approval of a transfer of structured settlement payment rights pursuant to section 407.1062, the transferee shall file with the court and serve on all interested parties a notice of the proposed transfer and the application for its approval, including in the notice:

(1) A copy of the transferee's application to the court;

(2) A copy of the disclosure statement required pursuant to subdivision (2) of section 407.1062; and

(3) Notification of the time and place of the hearing and notification of the manner in which and the time by which written responses to the application may be filed by interested parties, which shall be not less than ten days after service of the transferee's notice, in order to be considered by the court.

3. The provisions of sections 407.1060 to 407.1068 may not be waived.

Right to rescind--limitation of liability--limitation of jurisdiction.

407.1066. 1. A payee who enters into a transfer agreement shall have an absolute, irrevocable right to rescind and cancel such transfer agreement, with no penalty or other obligation, by giving written notice of rescission to the transferee at any time during the five days following the signing of the transfer agreement.

2. Any provision in a transfer agreement to pay liquidated damages, penalties, fees, actual or punitive damages, attorneys' fees or costs of any kind or nature to any person, firm, corporation or other entity which will be a party or third-party beneficiary to the transfer or transfer agreement shall be unenforceable.

3. Nothing contained in sections 407.1060 to 407.1068 shall be construed to authorize any transfer of structured settlement payment rights or other rights arising under a tort claim or a workers' compensation claim in contravention of applicable law or to give effect to any transfer of such rights that is invalid under applicable law.

4. Any provision in a transfer agreement that consents to jurisdiction in the courts of another state, requires appointment of an agent for service of process, confesses judgment, or selects a forum for resolution of disputes arising out of a transfer agreement shall be unenforceable.

Application of law.

407.1068. The provisions of sections 407.1060 to 407.1068 shall apply to any transfer of structured settlement payment rights pursuant to a transfer agreement reached on or after August 28, 1999.

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: Miss. Code Ann. § 11-57-3 (MS S.B. 2912)

Enacted 4/2/200

Effective 7/1/2002

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

SECTION 1. This act shall be known and may be cited as the "Structured

Settlement Protection Act."

SECTION 2. The following words and phrases shall have the meanings ascribed

herein, unless the context clearly indicates otherwise:

(a) "Annuity issuer" means an insurer that has issued a contract to fund

periodic payments under a structured settlement.

(b) "Dependents" include a payee's spouse and minor children and all other

persons for whom the payee is legally obligated to provide support, including

alimony.

(c) "Discounted present value" means the present value of future payments

determined by discounting such payments to the present using the most recently

published Applicable Federal Rate for determining the present value of an

annuity, as issued by the United States Internal Revenue Service.

(d) "Gross advance amount" means the sum payable to the payee or for the

payee's account as consideration for a transfer of structured settlement

payment rights before any reductions for transfer expenses or other deductions

to be made from such consideration.

(e) "Independent professional advice" means advice of an attorney, certified

public accountant, actuary or other licensed professional adviser.

(f) "Interested parties" means, with respect to any structured settlement, the

payee, any beneficiary irrevocably designated under the annuity contract to

receive payments following the payee's death, the annuity issuer, the

structured settlement obligor, and any other party that has continuing rights

or obligations under such structured settlement.

(g) "Net advance amount" means the gross advance amount less the aggregate

amount of the actual and estimated transfer expenses required to be disclosed

under Section 3(e) of this act.

 

(h) "Payee" means an individual who is receiving tax-free payments under a

structured settlement and proposes to make a transfer of payment rights

thereunder.

(i) "Periodic payments" includes both recurring payments and scheduled future

lump-sum payments.

(j) "Qualified assignment agreement" means an agreement providing for a

qualified assignment within the meaning of 26 USCS 130.

(k) "Responsible administrative authority" means, with respect to a structured

settlement, any government authority vested by law with exclusive jurisdiction

over the settled claim resolved by such structured settlement.

(l) "Settled claim" means the original tort claim or workers' compensation

claim resolved by a structured settlement.

(m) "Structured settlement" means an arrangement for periodic payment of

damages for personal injuries or sickness established by settlement or judgment

in resolution of a tort claim or for periodic payments in settlement of a

workers' compensation claim.

(n) "Structured settlement agreement" means the agreement, judgment,

stipulation or release embodying the terms of a structured settlement.

(o) "Structured settlement obligor" means, with respect to any structured

settlement, the party that has the continuing obligation to make periodic

payments to the payee under a structured settlement agreement or a qualified

assignment agreement.

(p) "Structured settlement payment rights" means rights to receive periodic

payments under a structured settlement, whether from the structured settlement

obligor or the annuity issuer, where:

(i) The payee is domiciled in, or the domicile or principal place of business

of the structured settlement obligor or the annuity issuer is located in, this

state;

(ii) The structured settlement agreement was approved by a court or responsible

administrative authority in this state; or

(iii) The structured settlement agreement is expressly governed by the laws of

this state.

(q) "Terms of the structured settlement" includes, with respect to any

structured settlement, the terms of the structured settlement agreement, the

annuity contract, any qualified assignment agreement and any order or other

approval of any court or responsible administrative authority or other

government authority that authorized or approved such structured settlement.

(r) " Transfer " means any sale, assignment, pledge, hypothecation or other

alienation or encumbrance of structured settlement payment rights made by a

payee for consideration; provided that the term " transfer " does not include

the creation or perfection of a security interest in structured settlement

payment rights under a blanket security agreement entered into with an insured

depository institution, in the absence of any action to redirect the structured

settlement payments to such insured depository institution, or an agent or

successor in interest thereof, or otherwise to enforce such blanket security

interest against the structured settlement payment rights.

(s) " Transfer agreement" means the agreement providing for a transfer of

structured settlement payment rights.

(t) " Transfer expenses" means all expenses of a transfer that are required

under the transfer agreement to be paid by the payee or deducted from the gross

advance amount, including, without limitation, court filing fees, attorney's

fees, escrow fees, lien recordation fees, judgment and lien search fees,

finder's fees, commissions, and other payments to a broker or other

intermediary; "transfer expenses" do not include preexisting obligations of the

payee payable for the payee's account from the proceeds of a transfer.

(u) "Transferee" means a party acquiring or proposing to acquire structured

settlement payment rights through a transfer.

SECTION 3. Not less than three (3) days before the date on which a payee

signs a transfer agreement, the transferee shall provide to the payee a

separate disclosure statement, in bold type no smaller than fourteen (14)

points, setting forth:

(a) The amounts and due dates of the structured settlement payments to be

transferred;

(b) The aggregate amount of such payments;

(c) The discounted present value of the payments to be transferred, which shall

be identified as the "calculation of current value of the transferred

structured settlement payments under federal standards for valuing annuities,"

and the amount of the Applicable Federal Rate used in calculating such

discounted present value;

(d) The gross advance amount;

(e) An itemized listing of all applicable transfer expenses, other than

attorney's fees and related disbursement payable in connection with the

transferee's application for approval of the transfer, and the transferee's

best estimate of the amount of any such fees and disbursements;

(f) The net advance amount;

(g) The amount of any penalties or liquidated damages payable by the payee in

the event of any breach of the transfer agreement by the payee; and

(h) A statement that the payee has the right to cancel the transfer agreement,

without penalty or further obligation, not later than the third business day

after the date the agreement is signed by the payee.

 

SECTION 4. No direct or indirect transfer of structured settlement payment

rights shall be effective and no structured settlement obligor or annuity

issuer shall be required to make any payment directly or indirectly to any

transferee of structured settlement payment rights unless the transfer has

been approved in advance in a final court order or order of a responsible

administrative authority based on express findings by such court or responsible

administrative authority that:

(a) The transfer is in the best interest of the payee, taking into account the

welfare and support of the payee's dependents;

(b) The payee has been advised in writing by the transferee to seek independent

professional advice regarding the transfer and has either received such advice

or knowingly waived such advice in writing; and

(c) The transfer does not contravene any applicable statute or the order of any

court or other government authority.

SECTION 5. Following a transfer of structured settlement payment rights under

this act:

(a) The structured settlement obligor and the annuity issuer shall, as to all

parties except the transferee, be discharged and released from any and all

liability for the transferred payments;

(b) The transferee shall be liable to the structured settlement obligor and the

annuity issuer:

(i) If the transfer contravenes the terms of the structured settlement,

for any taxes incurred by such parties as a consequence of the transfer; and

(ii) For any other liabilities or costs, including reasonable costs and

attorney's fees, arising from compliance by such parties with the order of the

court or responsible administrative authority or arising as a consequence of

the transferee's failure to comply with this act;

(c) Neither the annuity issuer nor the structured settlement obligor may be

required to divide any periodic payment between the payee and any transferee or

assignee or between two (2) or more transferees or assignees; and

(d) Any further transfer of structured settlement payment rights by the payee

may be made only after compliance with all of the requirements of this act.

SECTION 6. (1) An application under this act for approval of a transfer of

structured settlement payment rights shall be made by the transferee and may be

brought in the county in which the payee resides, in the county in which the

structured settlement obligor or the annuity issuer maintains its principal

place of business, or in any court or before any responsible administrative

authority which approved the structured settlement agreement.

(2) Not less than twenty (20) days prior to the scheduled hearing on any

application for approval of a transfer of structured settlement payment rights

under Section 4 of this act, the transferee shall file with the court or

responsible administrative authority and serve on all interested parties a

notice of the proposed transfer and the application for its authorization,

including with such notice:

(a) A copy of the transferee's application;

(b) A copy of the transfer agreement;

(c) A copy of the disclosure statement required under Section 3 of this act;

(d) A listing of each of the payee's dependents, together with each dependent's

age;

(e) Notification that any interested party is entitled to support, oppose or

otherwise respond to the transferee's application, either in person or by

counsel, by submitting written comments to the court or responsible

administrative authority or by participating in the hearing; and

(f) Notification of the time and place of the hearing and notification of the

manner in which and the time by which written responses to the application must

be filed which shall be not less than fifteen (15) days after service of the

transferee's notice in order to be considered by the court or responsible

administrative authority.

SECTION 7. (1) The provisions of this act may not be waived by any payee.

(2) Any transfer agreement entered into on or after the effective date of

this act by a payee who resides in this state shall provide that disputes under

such transfer agreement, including any claim that the payee has breached the

agreement, shall be determined in and under the laws of this state. No such

transfer agreement shall authorize the transferee or any other party to confess

judgment or consent to entry of judgment against the payee.

(3) No transfer of structured settlement payment rights shall extend to any

payments that are life-contingent unless, prior to the date on which the payee

signs the transfer agreement, the transferee has established and has agreed to

maintain procedures reasonably satisfactory to the annuity issuer and the

structured settlement obligor for (a) periodically confirming the payee's

survival, and (b) giving the annuity issuer and the structured settlement

obligor prompt written notice in the event of the payee's death.

(4) No payee who proposes to make a transfer of structured settlement payment

rights shall incur any penalty, forfeit any application fee or other payment,

or otherwise incur any liability to be proposed transferee or any assignee

based on any failure of such transfer to satisfy the conditions of this act.

(5) Nothing contained in this act shall be construed to authorize any

transfer of structured settlement payment rights in contravention of any law or

to imply that any transfer under a transfer agreement entered into before the

effective date of this act is valid or invalid.

(6) Compliance with the requirements set forth in Section 3 of this act and

fulfillment of the conditions set forth in Section 4 of this act shall be

solely the responsibility of the transferee in any transfer of structured

settlement payment rights, and neither the structured settlement obligor nor

the annuity issuer shall bear any responsibility for, or any liability arising

from, noncompliance with such requirements or failure to fulfill such

conditions.

SECTION 8. This act shall apply to any transfer of structured settlement

payment rights under a transfer agreement entered into on or after August 1,

2002; provided, however, that nothing contained herein shall imply that any

transfer under a transfer agreement reached before such date is either

effective or ineffective.

SECTION 9. This act shall take effect and be in force from and after July 1,

2002.

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: . Minn. Stat. §549.30 et seq. (SB 148)

Enacted 5/25/1999

Effective 7/1/1999

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

549.30 Definitions
Subdivision 1. Application. For purposes of sections 549.30 to 549.34, the terms defined in this section have the meanings given them.
Subd. 2. Annuity issuer. "Annuity issuer" means an insurer that has issued an annuity contract to be used to fund periodic payments under a structured settlement.
Subd. 3. Applicable law. "Applicable law" means: (1) the laws of the United States; (2) the laws of this state, including principles of equity applied in the courts of this state; and (3) the laws of any other jurisdiction: (i) which is the domicile of the payee or any other interested party; (ii) under whose laws a structured settlement agreement was approved by a court or responsible administrative authority; or (iii) in whose courts a settled claim was pending when the parties entered into a structured settlement agreement.
Subd. 4. Dependents. "Dependents" means a payee's spouse and minor children and all other family members and other persons for whom the payee is legally obligated to provide support, including spousal maintenance.
Subd. 5. Discounted present value. "Discounted present value" means, with respect to a proposed transfer of structured settlement payment rights, the fair present value of future payments, as determined by discounting the payments to the present using the most recently published applicable federal rate for determining the present value of an annuity, as issued by the United States Internal Revenue Service.
Subd. 6. Independent professional advice. "Independent professional advice" means advice of an attorney, certified public accountant, actuary, or other professional adviser: (1) who is engaged by a payee to render advice concerning the legal, tax, and financial implications of a transfer of structured settlement payment rights; (2) who is not in any manner affiliated with or compensated by the transferee of the transfer; and (3) whose compensation for providing the advice is not affected by whether a transfer occurs or does not occur.
Subd. 7. Interested parties. "Interested parties" means the payee, a beneficiary designated under the annuity contract to receive payments following the payee's death or, if the designated beneficiary is a minor, the designated beneficiary's parent or guardian, the annuity issuer, the structured settlement obligor, and any other party that has continuing rights or obligations under the structured settlement.
Subd. 8. Payee. "Payee" means an individual who is receiving tax free damage payments under a structured settlement and proposes to make a transfer of payment rights under the structured settlement.
Subd. 9. Qualified assignment agreement. "Qualified assignment agreement" means an agreement providing for a qualified assignment as provided by the United States Internal Revenue Code, title 26, section 130, as amended through December 31, 1998.
Subd. 10. Responsible administrative authority. "Responsible administrative authority" means a government authority vested by law with exclusive jurisdiction over the settled claim resolved by the structured settlement.
Subd. 11. Settled claim. "Settled claim" means the original tort claim or workers' compensation claim resolved by a structured settlement.
Subd. 12. Structured settlement. "Structured settlement" means an arrangement for periodic payment of damages for personal injuries established by settlement or judgment in resolution of a tort claim or for periodic payments in settlement of a workers' compensation claim.
Subd. 13. Structured settlement agreement. "Structured settlement agreement" means the agreement, judgment, stipulation, or release embodying the terms of a structured settlement, including the rights of the payee to receive periodic payments.
Subd. 14. Structured settlement obligor. "Structured settlement obligor" means the party that has the continuing periodic payment obligation to the payee under a structured settlement agreement or a qualified assignment agreement.
Subd. 15. Structured settlement payment rights. "Structured settlement payment rights" means rights to receive periodic payments, including lump sum payments, under a structured settlement, whether from the settlement obligor or the annuity issuer, where: (1) the payee or any other interested party is domiciled in the state; (2) the structured settlement agreement was approved by a court or responsible administrative authority in the state; or (3) the settled claim was pending before the courts of this state when the parties entered into the structured settlement agreement.
Subd. 16. Terms of the structured settlement. "Terms of the structured settlement" means the terms of the structured settlement agreement, the annuity contract, a qualified assignment agreement, and an order or approval of a court, responsible administrative authority, or other government authority authorizing or approving the structured settlement.
Subd. 17. Transfer. "Transfer" means a sale, assignment, pledge, hypothecation, or other form of alienation or encumbrance made by a payee for consideration.
Subd. 18. Transfer agreement. "Transfer agreement" means the agreement providing for transfer of structured settlement payment rights from a payee to a transferee.
Subd. 19. Transferee. "Transferee" means a person who is receiving or will receive structured settlement payment rights resulting from a transfer.

549.31 Conditions to transfers of structured settlement payment rights and structured settlement agreements
Subdivision 1. Generally. No direct or indirect transfer of structured settlement payment rights is effective and no structured settlement obligor or annuity issuer is required to make a payment directly or indirectly to a transferee of structured settlement payment rights unless the transfer has been authorized in advance in a final order of a court of competent jurisdiction or responsible administrative authority, based on the court's or responsible administrative authority's written express findings that:
(a) the transfer complies with the requirements of sections 549.31 to 549.34 and will not contravene other applicable law;
(b) not less than ten days before the date on which the payee first incurred an obligation with respect to the transfer, the transferee has provided to the payee a disclosure statement in bold type, no smaller than 14 points, specifying:
(1) the amounts and due dates of the structured settlement payments to be transferred;
(2) the aggregate amount of the payments;
(3) the discounted present value of the payments, together with the discount rate used in determining the discounted present value;
(4) the gross amount payable to the payee in exchange for the payments;
(5) an itemized listing of all brokers' commissions, service charges, application fees, processing fees, closing costs, filing fees, referral fees, administrative fees, legal fees, notary fees, and other commissions, fees, costs, expenses, and charges payable by the payee or deductible from the gross amount otherwise payable to the payee;
(6) the net amount payable to the payee after deduction of all commissions, fees, costs, expenses, and charges described in clause (5);
(7) the quotient, expressed as a percentage, obtained by dividing the net payment amount by the discounted present value of the payments; and
(8) the amount of any penalty and the aggregate amount of any liquidated damages, including penalties, payable by the payee in the event of a breach of the transfer agreement by the payee;
(c) the payee has established that the transfer is in the best interests of the payee and the payee's dependents;
(d) the payee has received independent professional advice regarding the legal, tax, and financial implications of the transfer;
(e) the transferee has given written notice of the transferee's name, address, and taxpayer identification number to the annuity issuer and the structured settlement obligor and has filed a copy of the notice with the court or responsible administrative authority; and
(f) that the transfer agreement provides that any disputes between the parties will be governed, interpreted, construed, and enforced in accordance with the laws of this state and that the domicile state of the payee is the proper place of venue to bring any cause of action arising out of a breach of the agreement. The transfer agreement must also provide that the parties agree to the jurisdiction of any court of competent jurisdiction located in this state.
If the transfer would contravene the terms of the structured settlement, upon the filing of a written objection by any interested party and after considering the objection and any response to it, the court or responsible administrative authority may grant, deny, or impose conditions upon the proposed transfer as the court or responsible administrative authority deems just and proper under the facts and circumstances in accordance with established principles of law. Any order approving a transfer must require that the transferee indemnify the annuity issuer and the structured settlement obligor for any liability including reasonable costs and attorney's fees arising from compliance by the issuer or obligor with the order of the court or responsible administrative authority.
Subd. 2. Unenforceable confessions of judgment. A provision in a transfer agreement giving a transferee power to confess judgment against a payee is unenforceable to the extent the amount of the judgment would exceed the amount paid by the transferee to the payee, less any payments received from the structured settlement obligor or the payee.
Subd. 3. Initial disclosure of structured settlement terms. In negotiating a structured settlement of claims brought by or on behalf of a claimant who is domiciled in this state, the structured settlement obligor shall disclose in writing to the claimant or the claimant's legal representative all of the following information that is not otherwise specified in the structured settlement agreement:
(1) the amounts and due dates of the periodic payments to be made under the structured settlement agreement. In the case of payments that will be subject to periodic percentage increases, the amounts of future payments may be disclosed by identifying the base payment amount, the amount and timing of scheduled increases, and the manner in which increases will be compounded;
(2) the amount of the premium payable to the annuity issuer;
(3) the discounted present value of all periodic payments that are not life-contingent, together with the discount rate used in determining the discounted present value;
(4) the nature and amount of any cost that may be deducted from any of the periodic payments;
(5) where applicable, that any transfer of the periodic payments is prohibited by the terms of the structured settlement and may otherwise be prohibited or restricted under applicable law; and
(6) that any transfer of the periodic payments by the claimant may subject the claimant to serious adverse tax consequences.

549.32 Jurisdiction; procedure for approval of transfers
Subdivision 1. Jurisdiction. The district court has nonexclusive jurisdiction over an application for authorization under section 549.31 of a transfer of structured settlement payment rights.
Subd. 2. Notice. Not less than 20 days before the scheduled hearing on an application for authorization of a transfer of structured settlement payment rights under section 549.31, the transferee shall file with the court or responsible administrative authority and serve on: any other government authority that previously approved the structured settlement; and all interested parties, a notice of the proposed transfer and the application for its authorization. The notice must include:
(1) a copy of the transferee's application to the court or responsible administrative authority;
(2) a copy of the transfer agreement;
(3) a copy of the disclosure statement required under section 549.31, subdivision 1, paragraph (b);
(4) notification that an interested party is entitled to support, oppose, or otherwise respond to the transferee's application, either in person or by counsel, by submitting written comments to the court or responsible administrative authority or by participating in the hearing; and
(5) notification of the time and place of the hearing and notification of the manner in which and the time by which written responses to the application must be filed, in order to be considered by the court or responsible administrative authority. Written responses to the application must be filed within 15 days after service of the transferee's notice.
549.33 No waiver; no penalties
Subdivision 1. No waiver. The provisions of sections 549.30 to 549.34 may not be waived.
Subd. 2. No penalty. No payee who proposes to make a transfer of structured settlement payment rights shall incur a penalty, forfeit an application fee or other payment, or otherwise incur any liability to the proposed transferee based on the failure of the transfer to satisfy the conditions of section 549.31.

549.34 Construction
Nothing contained in sections 549.30 to 549.34 may be construed to authorize the transfer of workers' compensation payment rights in contravention of applicable law or to give effect to the transfer of workers' compensation payment rights that is invalid under applicable law.

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: (SB 541)

Enacted 7/18/2006

Effective 9/1/2006

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

AN ACT to regulate the transfer of structured settlement rights; to place conditions on the transfer of structured settlement rights; to establish a procedure for approval of transfer of structured settlement rights; and to repeal acts and parts of acts.

The People of the State of Michigan enact:

Sec. 1. This act shall be known and may be cited as the "revised structured settlement protection act".

Sec. 2. As used in this act:

(a) "Annuity issuer" means an insurer that has issued a contract to fund periodic payments under a structured settlement.

(b) "Dependent" means a payee's spouse, minor child, or any other person for whom the payee is legally obligated to provide support, including alimony.

(c) "Discounted present value" means the present value of future payments determined by discounting the payments to the present using the most recently published applicable federal rate for determining the present value of an annuity, as issued by the internal revenue service.

(d) "Gross advance amount" means the sum payable to the payee or for the payee's account as consideration for a transfer of structured settlement payment rights before reduction in that sum for transfer expenses or other deductions.

(e) "Imminent financial hardship" means the inability of the payee, because of a change in the payee's circumstances after the execution of the initial structured settlement agreement, to purchase or pay for 1 or more of the following without the transfer:

(i) Medical care or a medical device for the payee or the payee's dependents.

(ii) Living quarters for the payee.

(iii) A motor vehicle necessary for the payee's transportation if the payee has no other suitable transportation options.

(iv) Education or job training expenses.

(v) Debts of the payee resulting from child support, alimony, a tax lien, funeral expenses, or a judgment.

(f) "Independent professional advice" means advice of an attorney, certified public accountant, actuary, or other licensed professional adviser.

(g) "Interested party" means, with respect to a structured settlement, the payee, a beneficiary irrevocably designated under an annuity contract to receive payments following the payee's death, an annuity issuer, a structured settlement obligor, or any other person that has continuing rights or obligations under the structured settlement.

(h) "Net advance amount" means the gross advance amount less the aggregate amount of the actual and estimated transfer expenses required to be disclosed under section 3(e).

(i) "Payee" means an individual who receives tax free payments under a structured settlement and who proposes to make a transfer of payment rights under the structured settlement.

(j) "Periodic payments" means both recurring payments and scheduled future lump sum payments.

(k) "Qualified assignment agreement" means an agreement providing for a qualified assignment as defined in section130 of the internal revenue code, 26 USC 130.

(l) "Settled claim" means the original tort claim resolved by a structured settlement.

(m) "Structured settlement" means an arrangement for periodic payment of damages for personal injuries or sickness established by settlement or judgment to resolve a tort claim. Structured settlement does not include an arrangement for periodic payments to settle a worker's compensation claim.

(n) "Structured settlement agreement" means an agreement, judgment, stipulation, or release embodying the terms of a structured settlement.

(o) "Structured settlement obligor" means, with respect to a structured settlement, a person that has a continuing obligation to make periodic payments to a payee under the structured settlement agreement or a qualified assignment agreement.

(p) "Structured settlement payment rights" means rights to receive periodic payments under a structured settlement, whether from the structured settlement obligor or the annuity issuer, if 1 or more of the following conditions exist:

(i) The payee is domiciled in, or the domicile or principal place of business of the structured settlement obligor or the annuity issuer is located in, this state.

(ii) The structured settlement agreement was approved by a court in this state.

(iii) The structured settlement agreement is expressly governed by the laws of this state.

(q) "Terms of the structured settlement" means, with respect to a structured settlement, the terms of the structured settlement agreement, an annuity contract, a qualified assignment agreement, or an order or other approval of a court that authorized or approved the structured settlement.

(r) "Transfer" means a sale, assignment, pledge, hypothecation, or other alienation or encumbrance of structured settlement payment rights a payee makes for consideration; except that "transfer" does not include the creation or perfection of a security interest in structured settlement payment rights under a blanket security agreement entered into with an insured depository institution, unless action has been taken to redirect the structured settlement payments to the insured depository institution or to an agent or successor in interest of the depository institution, or action has been taken to otherwise enforce the blanket security interest against the structured settlement payment rights.

(s) "Transfer agreement" means an agreement providing for a transfer of structured settlement payment rights.

(t) "Transfer expenses" means all expenses of a transfer that the transfer agreement requires the payee to pay or have deducted from the gross advance amount, including, but not limited to, court filing fees, attorney fees, escrow fees, lien recordation fees, judgment and lien search fees, finders' fees, commissions, and other payments to a broker or other intermediary. Transfer expenses do not include preexisting obligations of the payee that are payable for the payee's account from the proceeds of a transfer.

(u) "Transferee" means a person acquiring or proposing to acquire structured settlement payment rights through a transfer.

Sec. 3. Not less than 3 days before the date on which a payee signs a transfer agreement, the transferee shall provide to the payee a separate disclosure statement in bold type no smaller than 14 points setting forth all of the following:

(a) The amounts and due dates of the structured settlement payments to be transferred.

(b) The aggregate amount of the payments.

(c) The discounted present value of the payments to be transferred, which shall be identified as the calculation of current value of the transferred structured settlement payments under federal standards for valuing annuities, and the amount of the applicable federal rate used in calculating the discounted present value.

(d) The gross advance amount.

(e) An itemized listing of all applicable transfer expenses, other than attorney fees and related disbursements payable in connection with the transferee's application for approval of the transfer, and the transferee's best estimate of the amount of the fees and disbursements.

(f) The net advance amount.

(g) The amount of penalties or liquidated damages payable by the payee if the payee breaches the transfer agreement.

(h) A statement that the payee has the right to cancel the transfer agreement without penalty or further obligation not later than the third business day after the date that the payee signs the agreement.

Sec. 4. A direct or indirect transfer of structured settlement payment rights is not effective and a structured settlement obligor or annuity issuer is not required to make a payment directly or indirectly to a transferee of structured settlement payment rights unless the transfer has been approved in a final court order and the order is based on express findings of all of the following:

(a) The transfer is in the best interest of the payee, taking into account the welfare and support of the payee's dependents.

(b) The transferee has advised the payee, in writing, to seek independent professional advice regarding the transfer, and the payee has either received independent professional advice or knowingly waived in writing the opportunity to seek advice.

(c) The transfer does not contravene an applicable statute or order of the court or other government authority.

(d) The discount rate or rates used in determining the discounted present value of the structured settlement payments to be transferred do not exceed 25% per year.

(e) If the transfer is inconsistent with a restriction against assignment in the structured settlement agreement and if the structured settlement obligor objects to the transfer based on the restriction against assignment before the hearing on the application for approval of the transfer, all of the following:

(i) The payee will suffer imminent financial hardship if the transfer is not approved.

(ii) The transfer will not render the payee unable to pay current or future normal living expenses.

(iii) The transfer order will restrict payment of the gross advance amount to direct payment to the provider of the goods or services that are the subject of the imminent financial hardship. If the total cost of the goods or services cannot be readily determined at the time of or within a reasonable time after the transfer, the court may exercise reasonable discretion in ordering such direct payments.

Sec. 5. A transfer of structured settlement payment rights under this act has all of the following effects:

(a) The structured settlement obligor and the annuity issuer are discharged and released from all liability for the transferred payments as to any person except the transferee.

(b) The transferee is liable to the structured settlement obligor and the annuity issuer for both of the following:

(i) If the transfer contravenes the terms of the structured settlement, the taxes incurred by the structured settlement obligor and the annuity issuer as a consequence of the transfer.

(ii) Other liabilities or costs, including reasonable costs and attorney fees, arising from the structured settlement obligor's and the annuity issuer's compliance with the order of the court or from the transferee's failure to comply with this act.

(c) An annuity issuer or a structured settlement obligor is not required to divide a periodic payment between the payee and a transferee or assignee or between 2 or more transferees or assignees.

(d) A payee may make a further transfer of structured settlement payment rights only after complying with all of the requirements of this act.

Sec. 6. (1) The transferee may apply for approval of a transfer of structured settlement payment rights with the court in the county in which the payee resides, in the county in which the structured settlement obligor or the annuity issuer maintains its principal place of business, or with the court that approved the structured settlement agreement.

(2) Not less than 20 days before the scheduled hearing on an application for approval of a transfer of structured settlement payment rights under section 4, the transferee shall file with the court and serve on all interested parties a notice of the proposed transfer and the application for its authorization, and shall include with the notice all of the following:

(a) A copy of the transferee's application.

(b) A copy of the transfer agreement.

(c) A copy of the disclosure statement required under section 3.

(d) A listing of each of the payee's dependents and each dependent's age.

(e) Notice that any interested party is entitled to support, oppose, or otherwise respond to the transferee's application, either in person or by counsel, by submitting written comments to the court or by participating in the hearing.

(f) Notice of the time and place of the hearing and of the manner in which and the time by which written responses to the application must be filed to be considered by the court. The time for filing written responses shall be not less than 15 days after service of the transferee's notice.

Sec. 7. (1) A payee shall not waive a provision of this act.

(2) A transfer agreement entered into on or after the effective date of this act by a payee who resides in this state shall provide that disputes under the transfer agreement, including a claim that the payee has breached the agreement, shall be determined in and under the laws of this state. A transfer agreement shall not authorize the transferee or any other person to confess judgment or consent to entry of judgment against the payee.

(3) A transfer of structured settlement payment rights that are life-contingent is not effective unless, before the date on which the payee signs the transfer agreement, the transferee has established and has agreed to maintain procedures reasonably satisfactory to the annuity issuer and the structured settlement obligor for both of the following:

(a) Periodically confirming the payee's survival.

(b) Giving the annuity issuer and the structured settlement obligor prompt written notice in the event of the payee's death.

(4) A payee who proposes to make a transfer of structured settlement payment rights shall not incur a penalty, forfeit an application fee or other payment, or otherwise incur liability to the proposed transferee or assignee based on the failure of the transfer to satisfy the conditions of this act.

(5) This act does not authorize a transfer of structured settlement payment rights in contravention of law or validate or invalidate a transfer under a transfer agreement entered into before the effective date of this act.

(6) The transferee has sole responsibility for complying with the requirements in section 3 and fulfilling the conditions in section 4 in a transfer of structured settlement payment rights. A structured settlement obligor or annuity issuer shall not bear any responsibility or liability arising from a transferee's failure to comply with those requirements or to fulfill those conditions.

Sec. 8. This act applies to a transfer of structured settlement payment rights under any transfer agreement entered into on or after the thirtieth day after the effective date of this act.

Sec. 9. The structured settlement protection act, 2000 PA 330, MCL 691.1191 to 691.1197, is repealed effective 30days after the effective date of this act.

Sec. 10. This act takes effect September 1, 2006.

This act is ordered to take immediate effect.

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: Chapter 231C of the Massachusetts Code

Enacted 1/12/2001

Effective 4/12/2001

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

ALM GL ch. 231C, § 1 (2004)

§ 1. Definitions.
For the purposes of this chapter the following words shall have the following meanings unless the context otherwise requires:
"Annuity issuer", an insurer that has issued an annuity contract to be used to fund periodic payments under a structured settlement.
"Applicable law", any of the following, as applicable in interpreting the terms of a structured settlement:
(1) the laws of the United States;
(2) the laws of the commonwealth, including principles of equity applied in the courts of the commonwealth; and
(3) the laws of any other jurisdiction; (i) that is the domicile of the payee or any other interested party; (ii) under whose law a structured settlement agreement was approved by a court or responsible administrative authority; or (iii) in whose courts a settled claim was pending when the parties entered into a structured settlement agreement.
"Applicable federal rate", the most recently published applicable rate for determining the present value of an annuity, as issued by the United States Internal Revenue Service pursuant to section 7520 of the United States Internal Revenue Code.
"Assignee", a party that acquires structured settlement payment rights directly or indirectly from a transferee of such rights.
"Dependents", a payee's spouse and minor children and all other family members and other persons from whom the payee is legally obligated to provide support, including spousal maintenance.
"Discount/finance charge", the sum of all charges payable directly or indirectly from assigned structured settlement payments and imposed directly or indirectly by the transferee as an incident to a transfer of structured settlement payment rights, including:
(1) interest charges, discounts and other compensation for the time value of money;
(2) all application, origination, processing, underwriting, closing, filing and notary fees and all similar charges, however denominated; and
(3) all charges for commissions or brokerage, irrespective of the identity of the party to whom such charges are paid or payable.
The term discount/finance charge shall not include any fee or other obligation incurred by a payee in obtaining independent professional advice concerning a transfer of structured settlement payment rights.
"Discounted present value", with respect to a proposed transfer of structured settlement payment rights, the fair present value of future payments, as determined by discounting the payments to the present using the most recently published applicable federal rate as the discount rate.
"Independent professional advice", advice of an attorney, certified public accountant, actuary, or other licensed professional advisor:
(1) who is engaged by a payee to render advice concerning the legal, tax and financial implications of a transfer of structured settlement payment rights;
(2) who is not in any manner affiliated with or compensated by the transferee of the transfer; and
(3) whose compensation for providing the advice is not affected by whether or not a transfer occurs.
"Interested party", with respect to any structured settlement, the following:
(1) the payee;
(2) a beneficiary irrevocably designated under the annuity contract to receive payments following the payee's death or, if such designated beneficiary is a minor, the designated beneficiary's parent or guardian;
(3) the annuity issuer;
(4) the structured settlement obligor; and
(5) any other party that has continuing rights or obligations under the structured settlement.
"Payee", an individual who is receiving tax free damage payments under a structured settlement and proposes to make a transfer of payment rights under the structured settlement.
"Qualified assignment agreement", an agreement providing for a qualified assignment as provided by the United States Internal Revenue Code, Title 26, section 130.
"Responsible administrative authority", with respect to a structured settlement, a government authority vested by law with exclusive jurisdiction over the settled claim resolved by the structured settlement.
"Settled claim", the original tort claim or workers' compensation claim resolved by a structured settlement.
"Structured settlement", an arrangement for periodic payment of damages for personal injuries or sickness established by settlement or judgment in resolution of a tort claim or for periodic payments in settlement of a workers' compensation claim.
"Structured settlement agreement", the agreement, judgment, stipulation, or release embodying the terms of a structured settlement, including the rights of the payee to receive periodic payments.
"Structured settlement obligor", the party that has the obligation to make continuing periodic payments to the payee under a structured settlement agreement or a qualified assignment agreement.
"Structured settlement payment rights", rights to receive periodic payments, including lump sum payment under a structured settlement, whether from the settlement obligor or the annuity issuer, where:
(1) the payee or any other interested party is domiciled in the state;
(2) the structured settlement agreement was approved by a court or responsible administrative authority in the commonwealth; or
(3) the settled claim was pending before a court of the commonwealth when the parties entered into the structured settlement agreement.
"Terms of the structured settlement", the terms of the structured settlement agreement, the annuity contract, a qualified assignment agreement and an order or approval of a court, responsible administrative authority or other government authority authorizing or approving the structured settlement.
"Transfer", a sale, assignment, pledge, hypothecation, or other form of alienation or encumbrance made by a payee for consideration.
"Transfer agreement", the agreement providing for transfer of structured settlement payment rights from a payee to a transferee.
"Transferee", a person who is receiving or will receive structured settlement payment rights resulting from a transfer.

§ 2. Authorization; Requirements; Restrictions; Disclosure; Jurisdiction; Filing.
(a) No direct or indirect transfer of structured settlement payment rights shall be effective, and no structured settlement obligor or annuity issuer shall be required to make a payment directly or indirectly to a transferee of structured settlement payment rights, unless the transfer has been authorized in advance in a final order of a court of competent jurisdiction or responsible administrative authority, such as an administrative law judge, based on the court's or responsible administrative authority's written express findings that:
(1) the transfer complies with the requirements of this chapter and will not contravene other applicable law;
(2) not less than ten days before the date on which the payee first incurred an obligation with respect to the transfer, the transferee has provided to the payee a disclosure statement in bold type, no smaller than 14 points, specifying:
(i) the amounts and due dates of the structures settlement payments to be transferred;
(ii) the aggregate amount of the payments;
(iii) the discounted present value of the payments, together with the discount rate used in determining the discounted present value;
(iv) the gross amount payable to the payee in exchange for the payments;
(v) an itemized listing of all brokers' commissions, service charges, application fees, processing fees, closing costs, filing fees, referral fees, administrative fees, legal fees, notary fees, and other commissions, fees, costs, expenses and charges payable by the payee or deductible from the gross amount otherwise payable to the payee;
(vi) the net amount payable to the payee after deduction of all commissions, fees, costs, expenses and charges described in clause (v);
(vii) the quotient; expressed as a percentage, obtained by dividing the net payment amount by the discounted present value of the payments, which shall be disclosed in the statement as follows: "The net amount that you will receive from us in exchange for your future structured settlement payments represent ....% of the estimated current value of the payments";
(viii) the effective annual interest rate, which rate shall be disclosed in the statement as follows: "Based on the net amount that you receive from us and the amounts and timing of the structured settlement payments that you are turning over to us, you will, in effect, be paying interest to us at a rate of ....% per year"; and
(ix) the amount of any penalty and the aggregate amount of any liquidated damages, including penalties payable by the payee in the event of a breach of the transfer agreement by the payee;
(3) the payee has established that the transfer is in the best interests of the payee and the payee's dependents;
(4) the payee has received, or waived the right to receive independent professional advice regarding the legal, tax and financial implications of the transfer;
(5) the transferee has given written notice of the transferee's name, address, and taxpayer identification number to the annuity issuer and the structured settlement obligor and has filed a copy of the notice with the court or responsible administrative authority;
(6) the transfer agreement provides that if the payee is domiciled in the commonwealth, any disputes between the parties shall be governed, interpreted, construed, and enforced in accordance with the laws of the commonwealth and that the domicile state of the payee is the proper place of venue to bring any cause of action arising out of a breach of the agreement; and
(7) the court or responsible administrative agency has made a determination that the net amount payable to the payee is fair, just and reasonable under the circumstances then existing.
(b) The transfer agreement shall also provide that the parties agree to the jurisdiction of any court of competent jurisdiction located in the commonwealth. If the transfer would contravene the terms of the structured settlement, upon the filing of a written objection by any interested party and after considering the objection and any response to it, the court or responsible administrative authority may grant, deny or impose conditions upon the proposed transfer as the court or responsible administrative authority deems just and proper under the facts and circumstances in accordance with established principles of law. Any order approving the transfer shall require that the transferee indemnify the annuity issuer and the structured settlement obligor for any liability including reasonable costs and attorney's fees arising from compliance by the issuer or obligor with the order of the court or responsible administrative authority.
(c) A provision in a transfer agreement giving a transferee power to confess judgment against a payee shall be unenforceable to the extent the amount of the judgment would exceed the amount paid by the transferee to the payee, less any payments received from the structured settlement obligor or the payee.
(d) In negotiating a structured settlement of claims brought by or on behalf of a claimant who is domiciled in the commonwealth, the structured settlement obligor shall disclose in writing to the claimant or the claimant's legal representative all of the following information that is not otherwise specified in the structured settlement agreement:
(1) the amounts and due dates of the periodic payments to be made under the structured settlement agreement; in the case of payments that will be subject to periodic percentage increases, the amounts of future payments may be disclosed by identifying the base payment amount, the amount and timing of scheduled increases, and the manner in which increases will be compounded;
(2) the amount of the premium payable to the annuity issuer;
(3) the discounted present value of all periodic payments that are not life-contingent, together with the discount rate used in determining the discounted present value;
(4) the nature and amount of any cost that may be deducted from any of the periodic payments;
(5) where applicable, that any transfer of the periodic payments is prohibited by the terms of the structured settlement and may otherwise be prohibited or restricted under applicable law; and
(6) that any transfer of the periodic payments by the claimant may subject the claimant to serious adverse tax consequences.
(e) The district court shall have nonexclusive jurisdiction over an application for authorization of a transfer of structured settlement payment rights.
(f) Not less than 20 days before the scheduled hearing on an application for authorization of a transfer of structured settlement payment rights, the transferee shall file with the court or responsible administrative authority, any other government authority that previously approved the structured settlement, and all interested parties a notice of the proposed transfer and the application for its authorization. The notice shall include:
(1) a copy of the transferee's application to the court or responsible administrative authority;
(2) a copy of the transfer agreement;
(3) a copy of the disclosure statement required under this section;
(4) notification that an interested party is entitled to support, oppose, or otherwise respond to the transferee's application, either in person or by counsel, by submitting written comments to the court or responsible administrative authority or by participating in the hearing; and
(5) notification of the time and place of the hearing and notification of the manner in which and the time by which written responses to the application shall be filed, in order to be considered by the court or responsible administrative authority.
Written responses to the application shall be filed within 15 days after service of the transferee's notice.

§ 3. Limitations.
(a) The provisions of section 2 to 4, inclusive, shall not be waived.
(b) No payee who proposes to make a transfer of structured settlement payment rights shall incur a penalty, forfeit an application fee or other payment, or otherwise incur any liability to the proposed transferee based on the failure of the transfer to satisfy the conditions of section 2.

§ 4. Violations.
(a) If in connection with a transfer of structured settlement payment rights, a transferee has violated the discount/finance charge stipulation, neither the transferee nor any assignee shall be entitled to collect from the transferred payment rights, or from the payee, any amount in excess of the net advance amount, and the payee shall have a right to recover from the transferee or any assignee:
(1) a refund of any excess amounts previously received by the transferee or any assignee;
(2) a penalty in an amount determined by the court; and
(3) reasonable costs and attorney's fees.
(b) If in connection with a transfer of structured settlement payment rights, the transferee has violated the disclosure requirements in section 3, the transferee and any assignees shall be liable to the payee for:
(1) a penalty in an amount determined by the court; and
(2) reasonable costs and attorney's fees.
(c) A transferee or assignee shall not be liable for a penalty in any action brought under this section if the transferee or assignee establishes by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error, notwithstanding the transferee's maintenance of procedures reasonably designed to avoid such errors.
(d) No action may be brought under this section if:
(1) in the case of a violation of the discount/finance charge stipulation, more than one year after the due date of the last transferred structured settlement payment; and
(2) in the case of the disclosure requirements of section 2, more than one year after the due date of the first transferred structured settlement payment.
(e) If the attorney general has reason to believe that any transferee has violated this chapter, the attorney general may bring a civil action for injunctive relief and such penalties and other relief as may be appropriate to secure compliance with this chapter.

§ 5. Workers' Compensation.
Nothing contained in this chapter shall be construed to authorize any transfer of workers' compensation payment rights in contravention of applicable law or to give effect to any transfer of workers' compensation or other payment rights that is invalid under applicable law.

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: Md. Code Ann., Courts and Judicial Proceedings €€ 5-1101 - 5-1105 (HB 357)

Enacted 5/11/2000

Effective 10/1/2000

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

Maryland Structured Settlement Protection Act

5-1101.
(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS INDICATED.
(B) "DISCOUNTED PRESENT VALUE" MEANS THE FAIR PRESENT VALUE OF FUTURE
PAYMENTS, AS DETERMINED BY DISCOUNTING PAYMENTS TO THE PRESENT USING THE MOST
RECENTLY PUBLISHED APPLICABLE FEDERAL RATE FOR DETERMINING THE PRESENT VALUE OF
AN ANNUITY, AS ISSUED BY THE UNITED STATES INTERNAL REVENUE SERVICE.
(C) "INDEPENDENT PROFESSIONAL ADVICE" MEANS ADVICE OF AN ATTORNEY, CERTIFIED
PUBLIC ACCOUNTANT, ACTUARY, OR OTHER LICENSED PROFESSIONAL ADVISER:
(1) WHO IS ENGAGED BY A PAYEE TO RENDER ADVICE CONCERNING THE LEGAL, TAX, AND
FINANCIAL IMPLICATIONS OF A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS;
(2) WHO IS NOT AFFILIATED WITH OR COMPENSATED BY THE TRANSFEREE OF THE
TRANSFER; AND
(3) WHOSE COMPENSATION IS NOT AFFECTED BY WHETHER A TRANSFER OCCURS.
(D) "INTERESTED PARTIES" MEANS THE PAYEE, EACH BENEFICIARY DESIGNATED UNDER
THE ANNUITY CONTRACT TO RECEIVE PAYMENTS FOLLOWING THE PAYEE'S DEATH, THE
ANNUITY ISSUER, THE STRUCTURED SETTLEMENT OBLIGOR, AND ANY OTHER PARTY THAT HAS
CONTINUING RIGHTS OR OBLIGATIONS UNDER A STRUCTURED SETTLEMENT.
(E) "PAYEE" MEANS AN INDIVIDUAL WHO RECEIVES DAMAGE PAYMENTS THAT ARE NOT
SUBJECT TO INCOME TAXATION UNDER A STRUCTURED SETTLEMENT AND PROPOSES TO MAKE A
TRANSFER OF PAYMENT RIGHTS.
(F) "RESPONSIBLE ADMINISTRATIVE AUTHORITY" MEANS A GOVERNMENT AUTHORITY VESTED
WITH EXCLUSIVE JURISDICTION OVER THE SETTLED CLAIM RESOLVED BY A STRUCTURED
SETTLEMENT.
(G) (1) " STRUCTURED SETTLEMENT " MEANS AN ARRANGEMENT FOR PERIODIC PAYMENT OF
DAMAGES FOR PERSONAL INJURY ESTABLISHED BY A SETTLEMENT OR JUDGMENT IN
RESOLUTION OF A TORT CLAIM.
(2) " STRUCTURED SETTLEMENT " DOES NOT INCLUDE AN ARRANGEMENT FOR PERIODIC
PAYMENT OF DAMAGES FOR PERSONAL INJURY ESTABLISHED BY A JUDGMENT BY CONFESSION.
(H) " STRUCTURED SETTLEMENT AGREEMENT" MEANS AN AGREEMENT, JUDGMENT,
STIPULATION, OR RELEASE EMBODYING THE TERMS OF A STRUCTURED SETTLEMENT.
(I) " STRUCTURED SETTLEMENT OBLIGOR" MEANS A PARTY WHO HAS THE CONTINUING
PERIODIC PAYMENT OBLIGATION TO THE PAYEE UNDER A STRUCTURED SETTLEMENT
AGREEMENT OR A QUALIFIED ASSIGNMENT AGREEMENT.
(J) " STRUCTURED SETTLEMENT PAYMENT RIGHTS" MEANS THE RIGHTS TO RECEIVE
PERIODIC PAYMENTS, INCLUDING LUMP-SUM PAYMENTS UNDER A STRUCTURED SETTLEMENT,
WHETHER FROM THE SETTLEMENT OBLIGOR OR THE ANNUITY ISSUER, IF:
(1) AN INTERESTED PARTY IS DOMICILED IN THIS STATE;
(2) THE STRUCTURED SETTLEMENT AGREEMENT WAS APPROVED BY A COURT OR RESPONSIBLE
ADMINISTRATIVE AUTHORITY IN THIS STATE; OR
(3) THE SETTLED CLAIM WAS PENDING BEFORE A COURT OF THIS STATE WHEN THE
PARTIES ENTERED INTO THE STRUCTURED SETTLEMENT AGREEMENT.
(K) "TERMS OF THE STRUCTURED SETTLEMENT " INCLUDES THE TERMS OF THE
STRUCTURED SETTLEMENT AGREEMENT, THE ANNUITY CONTRACT, A QUALIFIED ASSIGNMENT,
AND AN ORDER OR APPROVAL OF A COURT OR RESPONSIBLE ADMINISTRATIVE AUTHORITY
AUTHORIZING OR APPROVING A STRUCTURED SETTLEMENT.
(L) "TRANSFER" MEANS A SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION, OR OTHER FORM
OF ALIENATION OR ENCUMBRANCE MADE BY A PAYEE FOR CONSIDERATION.
(M) "TRANSFER AGREEMENT" MEANS THE AGREEMENT PROVIDING FOR THE TRANSFER OF
STRUCTURED SETTLEMENT PAYMENT RIGHTS FROM A PAYEE TO A TRANSFEREE.

5-1102.
(A) A DIRECT OR INDIRECT TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS TO A
TRANSFEREE IS EFFECTIVE AS PROVIDED IN THIS SUBTITLE.
(B) A STRUCTURED SETTLEMENT OBLIGOR OR ANNUITY ISSUER SHALL MAY NOT MAKE
ANY PAYMENT DIRECTLY OR INDIRECTLY TO A TRANSFEREE OF STRUCTURED SETTLEMENT
PAYMENT RIGHTS IF UNLESS THE TRANSFER IS AUTHORIZED IN AN ORDER OF A COURT
BASED ON A FINDING THAT:
(1) THE TRANSFER IS AUTHORIZED IN AN ORDER OF A COURT BASED ON A FINDING
THAT THE TRANSFER IS NECESSARY, REASONABLE, OR APPROPRIATE;
(2) THE TRANSFER IS NOT EXPECTED TO SUBJECT THE PAYEE, THE PAYEE'S DEPENDENTS,
OR BOTH, TO UNDUE OR UNREASONABLE FINANCIAL HARDSHIP IN THE FUTURE;
(3) THE PAYEE RECEIVED INDEPENDENT PROFESSIONAL ADVICE REGARDING THE LEGAL,
TAX, AND FINANCIAL IMPLICATIONS OF THE TRANSFER; AND
(4) THE TRANSFEREE DISCLOSED TO THE PAYEE THE DISCOUNTED PRESENT VALUE.

5-1103.
(A) THE CIRCUIT COURT THAT HAS JURISDICTION OVER A PERSON AN INTERESTED
PARTY OR THE CIRCUIT COURT FOR THE COUNTY IN WHICH THE ORIGINAL CLAIM OCCURRED
SHALL HAVE NONEXCLUSIVE JURISDICTION OVER AN APPLICATION FOR A TRANSFER OF
STRUCTURED SETTLEMENT PAYMENT RIGHTS UNDER SECTION 5-1102 OF THIS SUBTITLE.
(B) A TRANSFEREE SHALL FILE WITH THE COURT AND SERVE ON THE INTERESTED PARTIES
AT LEAST 20 DAYS BEFORE THE HEARING ON THE APPLICATION, A NOTICE OF THE
PROPOSED TRANSFER AND AN APPLICATION FOR ITS AUTHORIZATION, INCLUDING:
(1) A COPY OF THE TRANSFEREE'S APPLICATION;
(2) A COPY OF THE TRANSFER AGREEMENT; AND
(3) NOTIFICATION:
(I) OF THE TIME AND PLACE OF THE HEARING; AND
(II) THAT EACH INTERESTED PARTY IS ENTITLED TO SUPPORT, OPPOSE, OR OTHERWISE
RESPOND TO THE TRANSFEREE'S APPLICATION, IN PERSON OR BY COUNSEL, BY SUBMITTING
WRITTEN COMMENTS TO THE COURT OR BY PARTICIPATING IN THE HEARING.

5-1104.
IF A PAYEE MAKES A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS IN
VIOLATION OF THIS SUBTITLE, THE STRUCTURED SETTLEMENT OBLIGOR OR ANNUITY ISSUER
MAY NOT INCUR ANY ADDITIONAL LIABILITY. IF A TRANSFER OF STRUCTURE SETTLEMENT
PAYMENT RIGHTS HAS BEEN AUTHORIZED UNDER THIS SUBTITLE, NEITHER THE ANNUITY
ISSUER NOR THE STRUCTURED SETTLEMENT OBLIGOR SHALL HAVE ANY LIABILITY TO THE
PAYEE OR TO ANY OTHER PARTY FOR ANY PAYMENT MADE TO THE TRANSFEREE IN
ACCORDANCE WITH THE AUTHORIZATION.

5-1105.
(A) THE PROVISIONS OF THIS SUBTITLE MAY NOT BE WAIVED.
(B) NOTHING CONTAINED IN THIS SUBTITLE MAY BE CONSTRUED TO AUTHORIZE A
TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS IN CONTRAVENTION OF APPLICABLE
LAW OR TO GIVE EFFECT TO A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS
THAT IS INVALID UNDER APPLICABLE LAW.
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall apply to any transfer
of structured settlement payment rights under a transfer agreement entered into
on or after the effective date of this Act; provided, however, that nothing
contained in this section shall imply that any transfer under a transfer
agreement entered into prior to the effective date of this Act is ineffective.
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect October
1, 2000.

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: 24-A M.R.S. € 2241 et seq. (SB 680)

Enacted 5/20/1999

Effective 6/1/1999

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

§ 2241. Definitions As used in this chapter, unless the context otherwise indicates, the following terms have the following meanings.

1. ANNUITY ISSUER. "Annuity issuer" means an insurer that has issued an insurance contract used to fund periodic payments under a structured settlement.

2. APPLICABLE LAW. "Applicable law" means:

A. Federal law;

B. The laws of this State, including principles of equity applied in
the courts of this State; and

C. The laws of any other jurisdiction:

1) That is the domicile of the payee or any other interested
party;

2) Under whose laws a structured settlement agreement was
approved by a court or responsible administrative authority; or

3) In whose courts a settled claim was pending when the parties
entered into a structured settlement agreement.

3. DEPENDENTS. "Dependents" means a payee's spouse and minor children and all other family members and other persons for whom the payee is legally obligated to provide support, including alimony.

4. DISCOUNTED PRESENT VALUE. "Discounted present value" means the fair present value of future payments as determined by discounting such payments to the present using the applicable federal rate for determining the present value of an annuity most recently published by the United States Internal Revenue Service.

5. FAVORABLE TAX DETERMINATION. "Favorable tax determination," with respect to a proposed transfer of structured settlement payment rights, means any of the following authorities that definitively establishes that the federal income tax treatment of the structured settlement for the parties, other than the payee, to the structured settlement agreement and any qualified assignment agreement will not be affected by that transfer:

A. A provision of the United States Internal Revenue Code or a United
States Treasury regulation adopted pursuant to the code;

B. A revenue ruling or revenue procedure issued by the United States
Internal Revenue Service;

C. A private letter ruling by the United States Internal Revenue
Service with respect to that transfer; or

D. A decision by the United States Supreme Court or a decision of a
lower federal court in which the United States Internal Revenue
Service has acquiesced.

6. FEDERAL HARDSHIP STANDARD. "Federal hardship standard" means a federal standard applicable to transfers of structured settlement payment rights based on findings of a court or responsible administrative authority regarding the payee's needs, as contained in the United States Internal Revenue Code or in a United States Treasury regulation adopted pursuant to the code.

7. INDEPENDENT PROFESSIONAL ADVICE. "Independent professional advice" means advice of an attorney, certified public accountant, actuary or other licensed professional advisor:

A. Who is engaged by a payee to render advice concerning the legal,
tax and financial implications of a transfer of structured settlement
payment rights;

B. Who is not in any manner affiliated with or compensated by the
transferee of that transfer; and

C. Whose compensation for rendering advice is not affected by whether
a transfer occurs or does not occur.

8. INTERESTED PARTIES. "Interested parties" means the payee, any beneficiary designated under the annuity contract to receive payments following the payee's death and any other party that has continuing rights or obligations under the contract. For purposes of this chapter, "interested parties" does not include the structured settlement obligor or the annuity issuer.

9. PAYEE. "Payee" means an individual who is receiving tax-free damage payments under a structured settlement and proposes to make a transfer of payment rights under that settlement.

10. QUALIFIED ASSIGNMENT AGREEMENT. "Qualified assignment agreement" means an agreement providing for a qualified assignment within the meaning of Section 130 of the United States Internal Revenue Code, United States Code, Title 26.

11. RESPONSIBLE ADMINISTRATIVE AUTHORITY. "Responsible administrative authority" means any government authority vested by law with exclusive jurisdiction over the settled claim resolved by a structured settlement.

12. SETTLED CLAIM. "Settled claim" means the original tort claim or workers' compensation claim resolved by a structured settlement.

13. STRUCTURED SETTLEMENT. "Structured settlement" means an arrangement for periodic payment of damages for personal injuries established by settlement or judgment in resolution of a tort claim or for periodic payments in settlement of a workers' compensation claim.

14. STRUCTURED SETTLEMENT AGREEMENT. "Structured settlement agreement" means the agreement, judgment, stipulation or release embodying the terms of a structured settlement, including the rights of the payee to receive periodic payments.

15. STRUCTURED SETTLEMENT OBLIGOR. "Structured settlement obligor" means the party that has the continuing periodic payment obligation to the payee under a structured settlement agreement or a qualified assignment agreement.

16. STRUCTURED SETTLEMENT PAYMENT RIGHTS. "Structured settlement payment rights" means rights to receive periodic payments, including lump sum payments, under a structured settlement, whether from the settlement obligor or the annuity issuer, when:

A. The payee, structured settlement obligor, annuity issuer or any
other interested party is domiciled in this State;

B. The structured settlement agreement was approved by a court or
responsible administrative authority in this State; or

C. The settled claim was pending before the courts of this State when
the parties entered into the structured settlement agreement.

17. TERMS OF STRUCTURED SETTLEMENT. "Terms of a structured settlement" means the terms of a structured settlement agreement, an annuity contract, any qualified assignment agreement and any order or approval of any court or responsible administrative authority or other government authority authorizing or approving the structured settlement.

18. TRANSFER. "Transfer" means any sale, assignment, pledge, hypothecation or other form of alienation or encumbrance made by a payee for consideration.

19. TRANSFER AGREEMENT. "Transfer agreement" means the agreement providing for transfer of structured settlement payment rights from a payee to a transferee.

20. TRANSFEREE. "Transferee" means a person that becomes entitled to receive structured settlement payment rights as a result of a transfer agreement.

§ 2242. Notice and registration requirements of transferees of structured settlements
1. NOTICE. A transferee of structured settlement payment rights that intends to do business in this State shall, prior to doing business, pay the appropriate fee at the rate established in section 601 and furnish notice to the superintendent to:

A. Identify the state in which the transferee is domiciled;

B. Identify the principal place of business of the group; and

C. Provide such other information as may be required by the
superintendent.

2. REGISTRATION. The transferee shall register with the superintendent and designate an agent solely for the purpose of receiving service of legal documents or process.

3. APPLICATION OF LAW. Any transferee that was doing business in this State prior to the effective date of this chapter within 30 days after the effective date of this chapter shall furnish notice to the superintendent pursuant to the requirements of subsection 1 and shall comply with the requirements of subsection 2.

4. NOTICE OF CHANGE. A transferee that intends to do business or is doing business in this State shall notify the superintendent within 10 days of any subsequent changes in any information or other items provided pursuant to this section.

§ 2243. Transfer of structured settlement payment rights
1. APPLICATION. This section applies to any transfer of structured settlement payment rights under a transfer agreement entered into on or after the effective date of this section. This section may not be construed to imply that any transfer under a transfer agreement reached prior to the effective date of this section is effective.

2. REQUIREMENTS FOR TRANSFER. A direct or indirect transfer of structured settlement payment rights is not effective and a structured settlement obligor or annuity issuer is not required to make any payment directly or indirectly to any transferee of structured settlement payment rights unless the transfer has been authorized in advance in a final order of a court of competent jurisdiction or a responsible administrative authority, based on express findings by that court or responsible administrative authority that:

A. The transfer complies with the requirements of this chapter and
does not contravene other applicable law;

B. Not less than 10 days prior to the date on which the payee first
incurred any obligation with respect to the transfer, the transferee
provided to the payee a disclosure statement in bold type, no smaller
than 14 points, setting forth:

1) The amounts and due dates of the structured settlement
payments to be transferred;

2) The aggregate amount of those payments;

3) The discounted present value of those payments together with
the discount rate used in determining that discounted present
value;

4) The gross amount payable to the payee in exchange for the
payments;

5) An itemized listing of all brokers' commissions, service
charges, application fees, processing fees, closing costs, filing
fees, administrative fees, legal fees, notary fees and other
commissions, fees, costs, expenses and charges payable by the
payee or deductible from the gross amount otherwise payable to
the payee;

6) The net amount payable to the payee after deduction of all
commissions, fees, costs, expenses and charges described in
subparagraph (5);

7) The quotient, expressed as a percentage, obtained by dividing
the net payment amount by the discounted present value of the
payments; and

8) The amount of any penalty and the aggregate amount of any
liquidated damages, inclusive of penalties, payable by the payee
in the event of any breach of the transfer agreement by the
payee;

C. The payee has established that the transfer is necessary to enable
the payee, the payee's dependents or both to avoid imminent financial
hardship, and the transfer is not expected to subject the payee, the
payee's dependents or both to undue financial hardship in the future,
except that if a federal hardship standard was in effect at the time
the payee and the transferee entered into the transfer agreement, in
lieu of the foregoing finding the court or responsible administrative
authority must make an express finding that the transfer qualifies
under that federal hardship standard;

D. The payee has received independent professional advice regarding
the legal, tax and financial implications of the transfer;

E. If the transfer would contravene the terms of the structured
settlement:

1) The transfer has been expressly approved in writing by:

a) Each interested party; and

b) Any court or government authority, other than the court or
responsible administrative authority from which authorization
of the transfer is sought under this chapter, that previously
approved the structured settlement; and

2) Signed originals of all approvals required under subparagraph
(1) have been filed with the court or responsible administrative
authority from which authorization of the transfer is sought
under this chapter and originals or copies have been furnished to
all interested parties;

F. If the transfer would contravene the terms of the structured
settlement, the transfer agreement does not have adverse tax
consequences to the structured settlement obligor or annuity issuer.
The structured settlement obligor or annuity issuer must demonstrate
to the court or responsible administrative authority that the
transfer agreement, if approved, will have adverse tax consequences;
and

G. The transferee has given written notice of the transferee's name,
address and taxpayer identification number to the annuity issuer and
the structured settlement obligor and has filed a copy of that notice
with the court or responsible administrative authority.

§ 2244. Jurisdiction; filing
1. JURISDICTION. The Superior Court has nonexclusive jurisdiction over any application for authorization under this chapter of a transfer of structured settlement payment rights.

2. FILING. Not less than 30 days prior to the scheduled hearing on any application for authorization of a transfer of structured settlement payment rights under this chapter, the transferee shall file with the court or responsible administrative authority and serve on any other government authority that previously approved the structured settlement, all interested parties, the structured settlement obligor and annuity issuer a notice of the proposed transfer and the application of its authorization, including in that notice:

A. A copy of the transferee's application;

B. A copy of the transfer agreement;

C. A copy of the disclosure statement required under section 2243,
subsection 2, paragraph B;

D. Notification that any interested party, structured settlement
obligor or annuity issuer is entitled to support, oppose or otherwise
respond to the transferee's application, either in person or by
counsel, by submitting written comments to the court or responsible
administrative authority or by participating in the hearing; and

E. Notification of the time and place of the hearing and notification
of the manner in which and the time by which written responses to the
application must be filed, which may be not less than 30 days after
service of the transferee's notice, in order to be considered by the
court or responsible administrative authority.

§ 2245. Prohibitions
1. PROHIBITION AGAINST WAIVER. The provisions of this chapter may not be waived.

2. PROHIBITION AGAINST PENALTY. A payee who proposes to make a transfer of structured settlement payment rights may not incur a penalty, forfeit an application fee or other payment or otherwise incur any liability to the proposed transferee based on the failure of that transfer to satisfy the conditions of section 2243.

§ 2246. Construction
Nothing contained in this chapter may be construed to authorize a transfer of structured settlement payment rights in contravention of applicable law or to give effect to a transfer of structured settlement payment rights that is invalid under applicable law.

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: La. R.S. 9:2715 (LA H.B. 179)

Enacted 6/27/2003

Effective 8/15/2003

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

Section 1. R.S. 9:2715(B)(1) is hereby amended and reenacted and R.S. 9:2715(J)

is hereby enacted to read as follows:

Section 2715. Transfer of structured settlement rights

B. The direct or indirect transfer of structured settlement payment rights

shall not be effective nor shall a structured settlement obligor or annuity

issuer be required to make a payment directly or indirectly to a transferee of

structured settlement payment rights unless all of the following requirements

are met:

(1) The transfer of structured settlement payment rights has been authorized in

advance by ex parte order of a court of competent jurisdiction which had

jurisdiction over the original tort or workers' compensation claim resolved by

the structured settlement or in which the original tort or workers'

compensation claim could have been brought , OR IN THE PARISH WHERE THE PAYEE

RESIDES AT THE TIME OF FILING THE EX PARTE PETITION . At least twenty days

prior to the issuance of the order, the transferee shall file a petition for

transfer with the caption "Ex Parte Petition for Transfer of Structured

Settlement Rights by (name of Transferee)."

J. ANY PERSON WHO ACQUIRES DIRECTLY OR INDIRECTLY STRUCTURED SETTLEMENT

PAYMENT RIGHTS IN A STRUCTURED SETTLEMENT FACTORING TRANSACTION IN ADVANCE OF

AN ORDER REQUIRED BY THIS SECTION MAY BE SUBJECT TO THE TAX IMPOSED UNDER THE

INTERNAL REVENUE CODE, 26 U.S.C. 5891.

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: KRS € 454.430 et seq. (HB 312)

Enacted 4/7/1998

Effective 7/15/1998

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

§ 454.430. Definitions for KRS 454.430 to 454.435 As used in KRS 454.430 to 454.435:
(1) "Annuity issuer" means an insurer that has issued an annuity contract to be used to fund periodic payments under a structured settlement;
(2) "Payee" means an individual who is receiving tax-free damage payments under a structured settlement and who wants to make a transfer of payment rights under the structured settlement agreement;
(3) "Protected parties" means, with respect to any structured settlement, the payee, any named beneficiary designated in the annuity contract or structured settlement to receive payments following the payee's death, or, if the named beneficiary is a minor, the named beneficiary's parent or guardian, the annuity issuer, and the structured settlement obligor;
(4) "Qualified assignment agreement" means an agreement providing for a qualified assignment that meets the requirements of Section 130 of the Internal Revenue Code, 26 U.S.C. sec. 130, as amended from time to time;
(5) "Settled claim" means the original tort claim resolved by a structured settlement;
(6) "Structured settlement" means an arrangement for periodic payment of damages for personal injuries established by settlement or judgment in resolution of a tort claim;
(7) "Structured settlement obligor" means, with respect to any structured settlement, the party that has the continuing periodic payment obligation to the payee under a structured settlement agreement or a qualified assignment agreement;
(8) "Structured settlement payment rights" means rights to receive periodic payments, including lump sum payments under a structured settlement, whether from the settlement obligor or the annuity issuer, where:
(a) The payee or any other protected party is domiciled in this state; or
(b) The settled claim was pending before the courts of this state when the structured settlement was reached;
(9) "Transfer" means any sale, assignment, pledge, hypothecation, or other form of alienation or encumbrance made for consideration; and
(10) "Transfer agreement" means the agreement providing for transfer of structured settlement payment rights from a payee to a transferee.

§ 454.431. Requirement for court approval of transfer of structured settlement payment rights -- Express findings that are required No transfer of structured settlement payment rights shall be effective and no structured settlement obligor or annuity issuer shall be required to make any payment directly or indirectly to any transferee of any transfer of structured settlement payment rights unless the transfer has been approved in advance in an order of a court of competent jurisdiction, based on the court's express findings that:
(1) The transfer complies with the requirements of KRS 454.430 to 454.435 and does not contravene other applicable law;
(2) Not less than ten (10) days prior to the date on which the payee entered into the transfer agreement, the transferee has provided to the payee a disclosure statement in bold type, no smaller than fourteen (14) point, setting forth:
(a) The amounts and due dates of the structured settlement payments to be transferred;
(b) The aggregate amount of the payments;
(c) The discounted present value of the payments, together with the discount rate or rates used in determining the discounted present value;
(d) The gross amount payable to the payee in exchange for the payments;
(e) An itemized listing of all brokers' commissions, service charges, application or processing fees, closing costs, filing or administrative charges, legal fees, notary fees and other commissions, fees, costs, expenses, and charges payable by the payee or deductible from the gross amount otherwise payable to the payee; and
(f) The amount of any penalty and the aggregate amount of any liquidated damages, including penalties, payable by the payee in the event of any breach of the transfer agreement by the payee;
(3) The payee has established that the transfer is necessary to enable the payee to avoid imminent financial hardship;
(4) The transferee has given written notice of the transferee's name, address, and taxpayer identification number to the annuity issuer and the structured settlement obligor and had filed a copy of the notice with the court; and
(5) The payee has consented in writing to the transfer.

454.435
(1) The Circuit Court in the county in which the original action was or could have been filed, or the county where the applicant resides, shall have jurisdiction over any application for approval of a transfer of structured settlement payment rights under KRS 454.431.
(2) Not less than twenty (20) days prior to the scheduled hearing on any application for court approval of a transfer of structured settlement payment rights under KRS 454.431, the payee or transferee shall file with the court and serve on all protected parties a notice of the proposed transfer and the application for its approval, including in the notice:
(a) A copy of the transferee's application to the court;
(b) A copy of the disclosure statement required under KRS 454.431(2); and
(c) Notification of the time and place of the hearing and notification of the manner in which and the time by which written responses to the application must be filed, which shall be not less than ten (10) days after service of the transferee's notice, in order to be considered by the court.
(3) The provisions of KRS 454.430 to 454.435 may not be waived.

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: H.B. 2160 )

Enacted 7/1/2005

Effective 7/1/2005

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

Kansas H.B. 2160
AN ACT concerning structured settlements; enacting the structured settlement protection act.

Be it enacted by the Legislature of the State of Kansas:

Section 1. For purposes of this act: (a) "Annuity issuer" means an insurer that
has issued a contract to fund periodic payments under a structured settlement.

(b) "Dependents" include a payee's spouse and minor children and all other
persons for whom the payee is legally obligated to provide support, including
alimony.

(c) "Discounted present value" means the present value of future payments
determined by discounting such payments to the present using the most recently
published applicable federal rate for determining the present value of an

annuity, as issued by the United States internal revenue service.

(d) "Gross advance amount" means the sum payable to the payee or for the
payee's account as consideration for a transfer of structured settlement
payment rights before any reductions for transfer expenses or other deductions
to be made from such consideration.

(e) "Independent professional advice" means advice of an attorney, certified
public accountant, actuary or other licensed professional adviser.

(f) "Interested parties" means, with respect to any structured settlement, the
payee, any beneficiary irrevocably designated under the annuity contract to
receive payments following the payee's death, the annuity issuer, the
structured settlement obligor and any other party that has continuing rights or
obligations under such structured settlement.

(g) "Net advance amount" means the gross advance amount less the aggregate
amount of the actual and estimated transfer expenses required to be disclosed
under subsection (e) of section 2 and amendments thereto.

(h) "Payee" means an individual who receives tax free payments under a
structured settlement and proposes to make a transfer of payment rights
thereunder.

(i) "Periodic payments" include both recurring payments and scheduled future
lump sum payments.

(j) "Qualified assignment agreement" means an agreement providing for a
qualified assignment within the meaning of section 130 of the United States
internal revenue code.

(k) "Responsible administrative authority" means, with respect to a structured
settlement, any government authority vested by law with exclusive jurisdiction
over the settled claim resolved by such structured settlement.

(l) "Settled claim" means the original tort claim or workers' compensation
claim resolved by a structured settlement.

(m) "Structured settlement" means an arrangement for periodic payment of
damages for personal injuries or sickness established by settlement or judgment
in resolution of a tort claim or for periodic payments in settlement of a
workers' compensation claim .

(n) "Structured settlement agreement" means the agreement, judgment,
stipulation or release embodying the terms of a structured settlement.

(o) "Structured settlement obligor" means, with respect to any structured
settlement, the party that has the continuing obligation to make periodic
payments to the payee under a structured settlement agreement or a qualified
assignment agreement.

(p) "Structured settlement payment rights" means rights to receive periodic
payments under a structured settlement, whether from the structured settlement
obligor or the annuity issuer, where:

(1) The payee is domiciled in this state or the domicile or principal place of
business of the structured settlement obligor or the annuity issuer is located
in this state;

(2) the structured settlement agreement was approved by a court or responsible
administrative authority in this state; or

(3) the structured settlement agreement is expressly governed by the laws of
this state.

(q) "Terms of the structured settlement" include the terms of the structured
settlement agreement, the annuity contract, any qualified assignment agreement
and any order or other approval of any court or responsible administrative
authority or other government authority that authorized or approved such
structured settlement.

(r) "Transfer" means any sale, assignment, pledge, hypothecation or other
alienation or encumbrance of structured settlement payment rights made by a
payee for consideration. Transfer does not include the creation or perfection
of a security interest in structured settlement payment rights under a blanket
security agreement entered into with an insured depository institution, in the
absence of any action to redirect the structured settlement payments to such
insured depository institution, or an agent or successor in interest thereof,
or otherwise to enforce such blanket security interest against the structured
settlement payment rights.

(s) "Transfer agreement" means the agreement providing for a transfer of
structured settlement payment rights.

(t) "Transfer expenses" means all expenses of a transfer that are required
under the transfer agreement to be paid by the payee or deducted from the gross
advance amount, including, without limitation, court filing fees, attorneys
fees, escrow fees, lien recordation fees, judgment and lien search fees,
finders' fees, commissions and other payments to a broker or other
intermediary. Transfer expenses do not include any preexisting obligations of
the payee payable for the payee's account from the proceeds of a transfer.

(u) "Transferee" means a party acquiring or proposing to acquire structured
settlement payment rights through a transfer.

Sec. 2. The transferee shall provide to the payee a separate disclosure
statement not less than three days prior to the date on which a payee signs a
transfer agreement. Such disclosure statement shall set forth in bold type no
smaller than 14 points:

(a) The amounts and due dates of the structured settlement payments to be
transferred.

(b) The aggregate amount of such payments.

(c) The discounted present value of the payments to be transferred, which shall
be identified as the calculation of current value of the transferred structured
settlement payments under federal standards for valuing annuities, and the
amount of the applicable federal rate used in calculating such discounted
present value.

(d) The gross advance amount.

(e) An itemized listing of all applicable transfer expenses, other than
attorneys' fees and related disbursements payable in connection with the
transferee's application for approval of the transfer, and the transferee's
best estimate of the amount of any such fees and disbursements.

(f) The net advance amount.

(g) The amount of any penalties or liquidated damages payable by the payee in
the event of any breach of the transfer agreement by the payee.

(h) A statement that the payee has the right to cancel the transfer agreement,
without penalty or further obligation, not later than the third business day
after the date the agreement is signed by the payee.

Sec. 3. (a) No direct or indirect transfer of structured settlement payment
rights shall be effective and no structured settlement obligor or annuity
issuer shall be required to make any payment directly or indirectly to any
transferee of structured settlement payment rights unless the transfer has been
approved in advance in a final court order or order of a responsible
administrative authority based on express findings by such court or responsible
administrative authority that the:

(1) Transfer is in the best interest of the payee, taking into account the
welfare and support of the payee's dependents;

(2) payee has been advised in writing by the transferee to seek independent
professional advice regarding the transfer and has either received such advice
or knowingly waived such advice in writing; and

(3) transfer does not contravene any applicable statute or the order of any
court or other government authority.

Sec. 4. Following a transfer of structured settlement payment rights under this
act: (a) The structured settlement obligor and the annuity issuer shall be
discharged and released from any and all liability for the transferred payments
as to all parties except the transferee.

(b) The transferee shall be liable to the structured settlement obligor and the
annuity issuer:

(1) If the transfer contravenes the terms of the structured settlement, for any
taxes incurred by such parties as a consequence of the transfer; and

(2) for any other liabilities or costs, including reasonable costs and
attorneys' fees, arising from compliance by such parties with the order of the
court or responsible administrative authority or arising as a consequence of
the transferee's failure to comply with this act.

(c) Neither the annuity issuer nor the structured settlement obligor may be
required to divide any periodic payment between the payee and any transferee or
assignee or between two or more transferees or assignees.

(d) Any further transfer of structured settlement payment rights by the payee
may be made only after compliance with all of the requirements of this act.

Sec. 5. (a) An application for approval of a transfer of structured settlement
payment rights shall be made by the transferee and may be brought in:

(1) The county in which the payee resides;

(2) the county in which the structured settlement obligor or the annuity issuer
maintains its principal place of business; or

(3) any court or before any responsible administrative authority which approved
the structured settlement agreement.

(b) The transferee shall file with the court or responsible administrative
authority and serve on all interested parties a notice of the proposed transfer
and the application for its authorization not less than 20 days prior to the
scheduled hearing on any application for approval of a transfer of structured
settlement payment rights under section 3 and amendments thereto. Such notice
shall include:

(1) A copy of the transferee's application;

(2) a copy of the transfer agreement;

(3) a copy of the disclosure statement required under section 2 and amendments
thereto;

(4) a listing of each of the payee's dependents, together with each dependent's
age;

(5) notification that any interested party is entitled to support, oppose or
otherwise respond to the transferee's application, either in person or by
counsel, by submitting written comments to the court or responsible
administrative authority or by participating in the hearing; and

(6) notification of the time and place of the hearing and notification of the
manner in which and the time, which shall not be less than 15 days after
service of the transferee's notice, by which written responses to the
application must be filed in order to be considered by the court or responsible
administrative authority.

Sec. 6. (a) The provisions of this act may not be waived by any payee.

(b) Any transfer agreement entered into by a payee who resides in this state on
or after the effective date of this act shall provide that disputes under such
transfer agreement, including any claim that the payee has breached the
agreement, shall be determined in and under the laws of this state. No such
transfer agreement shall authorize the transferee or any other party to confess
judgment or consent to entry of judgment against the payee.

(c) No transfer of structured settlement payment rights shall extend to any
payments that are life-contingent unless, prior to the date on which the payee
signs the transfer agreement, the transferee has established and has agreed to

maintain procedures reasonably satisfactory to the annuity issuer and the
structured settlement obligor for:

(1) Periodically confirming the payee's survival; and

(2) giving the annuity issuer and the structured settlement obligor prompt
written notice in the event of the payee's death.

(d) No payee who proposes to make a transfer of structured settlement payment
rights shall incur any penalty, forfeit any application fee or other payment,
or otherwise incur any liability to the proposed transferee or any assignee
based on any failure of such transfer to satisfy the conditions of this act.

(e) No provision of this act shall be construed to authorize any transfer of
structured settlement payment rights in contravention of any law or to imply
that the validity of any transfer under a transfer agreement entered into
prior to the effective date of this act.

(f) Compliance with the requirements of section 2, and amendments thereto, and
fulfillment of the conditions of section 3, and amendments thereto, shall be
solely the responsibility of the transferee in any transfer of structured
settlement payment rights. Neither the structured settlement obligor nor the
annuity issuer shall bear any responsibility for, or any liability arising
from, non-compliance with such requirements or failure to fulfill such
conditions.

Sec. 7. (A) Sections 1 through 7, and amendments thereto, shall be known as
and may be cited as the structured settlement protection act.

(B) NO PROVISION OF THIS ACT SHALL APPLY TO ANY SETTLEMENT OF ANY CLAIM FOR OR
AWARD OF WORKERS COMPENSATION.

Sec. 8. This act shall take effect and be in force from and after its
publication in the statute book. Be it enacted by the Legislature of the State of Kansas:

Section 1. For purposes of this act: (a) "Annuity issuer" means an insurer that
has issued a contract to fund periodic payments under a structured settlement.

(b) "Dependents" include a payee's spouse and minor children and all other
persons for whom the payee is legally obligated to provide support, including
alimony.

(c) " Discounted present value " means the present value of future payments
determined by discounting such payments to the present using the most recently
published applicable federal rate for determining the present value of an
annuity, as issued by the United States internal revenue service.

(d) "Gross advance amount" means the sum payable to the payee or for the
payee's account as consideration for a transfer of structured settlement
payment rights before any reductions for transfer expenses or other deductions
to be made from such consideration.

(e) "Independent professional advice" means advice of an attorney, certified
public accountant, actuary or other licensed professional adviser.

(f) "Interested parties" means, with respect to any structured settlement, the
payee, any beneficiary irrevocably designated under the annuity contract to
receive payments following the payee's death, the annuity issuer, the
structured settlement obligor and any other party that has continuing rights or
obligations under such structured settlement.

(g) "Net advance amount" means the gross advance amount less the aggregate
amount of the actual and estimated transfer expenses required to be disclosed
under subsection (e) of section 2 and amendments thereto.

(h) "Payee" means an individual who receives tax free payments under a
structured settlement and proposes to make a transfer of payment rights
thereunder.

(i) "Periodic payments" include both recurring payments and scheduled future
lump sum payments.

(j) "Qualified assignment agreement" means an agreement providing for a
qualified assignment within the meaning of section 130 of the United States
internal revenue code.

(k) "Responsible administrative authority" means, with respect to a
structured settlement, any government authority vested by law with exclusive
jurisdiction over the settled claim resolved by such structured settlement.

(l) " Settled claim" means the original tort claim resolved by a structured
settlement.

(m) " Structured settlement " means an arrangement for periodic payment of
damages for personal injuries or sickness established by settlement or
judgment in resolution of a tort claim.

(n) " Structured settlement agreement" means the agreement, judgment,
stipulation or release embodying the terms of a structured settlement.

(o) " Structured settlement obligor" means, with respect to any structured
settlement, the party that has the continuing obligation to make periodic
payments to the payee under a structured settlement agreement or a qualified
assignment agreement.

(p) " Structured settlement payment rights" means rights to receive periodic
payments under a structured settlement, whether from the structured settlement
obligor or the annuity issuer, where:

(1) The payee is domiciled in this state or the domicile or principal place of
business of the structured settlement obligor or the annuity issuer is located
in this state;

(2) the structured settlement agreement was approved by a court or responsible
administrative authority in this state; or

(3) the structured settlement agreement is expressly governed by the laws of
this state.

(q) "Terms of the structured settlement " include the terms of the structured
settlement agreement, the annuity contract, any qualified assignment agreement
and any order or other approval of any court or responsible administrative
authority or other government authority that authorized or approved such
structured settlement.

(r) "Transfer" means any sale, assignment, pledge, hypothecation or other
alienation or encumbrance of structured settlement payment rights made by a
payee for consideration. Transfer does not include the creation or perfection
of a security interest in structured settlement payment rights under a blanket
security agreement entered into with an insured depository institution, in the
absence of any action to redirect the structured settlement payments to such
insured depository institution, or an agent or successor in interest thereof,
or otherwise to enforce such blanket security interest against the structured
settlement payment rights.

(s) "Transfer agreement" means the agreement providing for a transfer of
structured settlement payment rights.

(t) "Transfer expenses" means all expenses of a transfer that are required
under the transfer agreement to be paid by the payee or deducted from the gross
advance amount, including, without limitation, court filing fees, attorneys
fees, escrow fees, lien recordation fees, judgment and lien search fees,
finders' fees, commissions and other payments to a broker or other
intermediary. Transfer expenses do not include any preexisting obligations of
the payee payable for the payee's account from the proceeds of a transfer.

(u) "Transferee" means a party acquiring or proposing to acquire structured
settlement payment rights through a transfer.

Sec. 2. The transferee shall provide to the payee a separate disclosure
statement not less than three days prior to the date on which a payee signs a
transfer agreement. Such disclosure statement shall set forth in bold type no
smaller than 14 points:

(a) The amounts and due dates of the structured settlement payments to be
transferred.

(b) The aggregate amount of such payments.

(c) The discounted present value of the payments to be transferred, which shall
be identified as the calculation of current value of the transferred
structured settlement payments under federal standards for valuing annuities,
and the amount of the applicable federal rate used in calculating such
discounted present value.

(d) The gross advance amount.

(e) An itemized listing of all applicable transfer expenses, other than
attorneys' fees and related disbursements payable in connection with the
transferee's application for approval of the transfer, and the transferee's
best estimate of the amount of any such fees and disbursements.

(f) The net advance amount.

(g) The amount of any penalties or liquidated damages payable by the payee in
the event of any breach of the transfer agreement by the payee.

(h) A statement that the payee has the right to cancel the transfer agreement,
without penalty or further obligation, not later than the third business day
after the date the agreement is signed by the payee.

Sec. 3. (a) No direct or indirect transfer of structured settlement payment
rights shall be effective and no structured settlement obligor or annuity
issuer shall be required to make any payment directly or indirectly to any
transferee of structured settlement payment rights unless the transfer has been
approved in advance in a final court order or order of a responsible
administrative authority based on express findings by such court or responsible
administrative authority that the:

(1) Transfer is in the best interest of the payee, taking into account the
welfare and support of the payee's dependents;

(2) payee has been advised in writing by the transferee to seek independent
professional advice regarding the transfer and has either received such advice
or knowingly waived such advice in writing; and

(3) transfer does not contravene any applicable statute or the order of any
court or other government authority.

Sec. 4. Following a transfer of structured settlement payment rights under this
act: (a) The structured settlement obligor and the annuity issuer shall be
discharged and released from any and all liability for the transferred payments
as to all parties except the transferee.

(b) The transferee shall be liable to the structured settlement obligor and the
annuity issuer:

(1) If the transfer contravenes the terms of the structured settlement, for any
taxes incurred by such parties as a consequence of the transfer; and

(2) for any other liabilities or costs, including reasonable costs and
attorneys' fees, arising from compliance by such parties with the order of the
court or responsible administrative authority or arising as a consequence of
the transferee's failure to comply with this act.

(c) Neither the annuity issuer nor the structured settlement obligor may be
required to divide any periodic payment between the payee and any transferee or
assignee or between two or more transferees or assignees.

(d) Any further transfer of structured settlement payment rights by the payee
may be made only after compliance with all of the requirements of this act.

Sec. 5. (a) An application for approval of a transfer of structured
settlement payment rights shall be made by the transferee and may be brought in:

(1) The county in which the payee resides;

(2) the county in which the structured settlement obligor or the annuity
issuer maintains its principal place of business; or

(3) any court or before any responsible administrative authority which approved
the structured settlement agreement.

(b) The transferee shall file with the court or responsible administrative
authority and serve on all interested parties a notice of the proposed transfer
and the application for its authorization not less than 20 days prior to the
scheduled hearing on any application for approval of a transfer of structured
settlement payment rights under section 3 and amendments thereto. Such notice
shall include:

(1) A copy of the transferee's application;

(2) a copy of the transfer agreement;

(3) a copy of the disclosure statement required under section 2 and amendments
thereto;

(4) a listing of each of the payee's dependents, together with each dependent's
age;

(5) notification that any interested party is entitled to support, oppose or
otherwise respond to the transferee's application, either in person or by
counsel, by submitting written comments to the court or responsible
administrative authority or by participating in the hearing; and

(6) notification of the time and place of the hearing and notification of the
manner in which and the time, which shall not be less than 15 days after
service of the transferee's notice, by which written responses to the
application must be filed in order to be considered by the court or responsible
administrative authority.

Sec. 6. (a) The provisions of this act may not be waived by any payee.

(b) Any transfer agreement entered into by a payee who resides in this state on
or after the effective date of this act shall provide that disputes under such
transfer agreement, including any claim that the payee has breached the
agreement, shall be determined in and under the laws of this state. No such
transfer agreement shall authorize the transferee or any other party to confess
judgment or consent to entry of judgment against the payee.

(c) No transfer of structured settlement payment rights shall extend to any
payments that are life-contingent unless, prior to the date on which the payee
signs the transfer agreement, the transferee has established and has agreed to
maintain procedures reasonably satisfactory to the annuity issuer and the
structured settlement obligor for:

(1) Periodically confirming the payee's survival; and

(2) giving the annuity issuer and the structured settlement obligor prompt
written notice in the event of the payee's death.

(d) No payee who proposes to make a transfer of structured settlement payment
rights shall incur any penalty, forfeit any application fee or other payment,
or otherwise incur any liability to the proposed transferee or any assignee
based on any failure of such transfer to satisfy the conditions of this act.

(e) No provision of this act shall be construed to authorize any transfer of
structured settlement payment rights in contravention of any law or to imply
the validity of any transfer under a transfer agreement entered into prior to
the effective date of this act.

(f) Compliance with the requirements of section 2, and amendments thereto, and
fulfillment of the conditions of section 3, and amendments thereto, shall be
solely the responsibility of the transferee in any transfer of structured
settlement payment rights. Neither the structured settlement obligor nor the
annuity issuer shall bear any responsibility for, or any liability arising
from, non-compliance with such requirements or failure to fulfill such
conditions.

Sec. 7. (a) Sections 1 through 7, and amendments thereto, shall be known as and
may be cited as the structured settlement protection act.

(b) No provision of this act shall apply to any settlement of any claim for or
award of workers compensation.

Sec. 8. This act shall take effect and be in force from and after its
publication in the statute book.

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: Iowa Code § 682.2 (IA S.B. 337)

Enacted 4/26/200

Effective 7/1/2001

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

Section 1. NEW SECTION. 682.1 SHORT TITLE.

This chapter shall be known and may be cited as the "Structured Settlement

Protection Act".

Sec. 2. NEW SECTION. 682.2 DEFINITIONS.

As used in this chapter, unless the context otherwise requires:

1. "Annuity issuer" means an issuer that has issued an insurance contract used

to fund periodic payments under a structured settlement.

2. "Dependents" means a payee's spouse and minor children and all other

family members and other persons for whom the payee is legally obligated to

provide support, including alimony.

3. "Discounted present value" means the fair present value of future payments,

as determined by discounting such payments to the present using the most

recently published applicable federal rate for determining the present value of

an annuity, as issued by the United States internal revenue service.

4. "Gross advance amount" means the sum payable to the payee or for the payee's

account as consideration for a transfer of structured settlement payment

rights before any reductions for transfer expenses or other deductions to be

made from such consideration.

5. "Independent professional advice" means advice of an attorney, certified

public accountant, actuary, or other licensed professional advisor.

6. "Interested parties" means, with respect to a structured settlement, the

payee, a beneficiary irrevocably designated under the annuity contract to

receive payments following the payee's death, the annuity issuer, the

structured settlement obligor, and any other party that has continuing rights

or obligations under the structured settlement.

7. "Net advance amount" means the gross advance amount less the aggregate

amount of the actual and estimated transfer expenses required to be disclosed

under section 682.3, subsection 5.

8. "Payee" means an individual who is receiving tax-free payments under a

structured settlement and proposes to make a transfer of payment rights.

9. "Periodic payments" means both recurring payments and scheduled future lump

sum payments.

10. "Qualified assignment agreement" means an agreement providing for a

qualified assignment within the meaning of section 130 of the Internal Revenue

Code.

11. "Responsible administrative authority" means, with respect to a structured

settlement, any government authority vested by law with exclusive jurisdiction

over the settled claim resolved by the structured settlement.

12. "Settled claim" means the original tort claim or workers' compensation

claim resolved by a structured settlement.

13. "Structured settlement" means an arrangement for periodic payment of

damages for personal injuries established by settlement or judgment in

resolution of a tort claim or for periodic payments in settlement of a workers'

compensation claim.

14. "Structured settlement agreement" means the agreement, judgment,

stipulation, or release embodying the terms of a structured settlement.

15. "Structured settlement obligor" means, with respect to a structured

settlement, the party that has the continuing periodic payment obligation to

the payee under a structured settlement agreement or a qualified assignment

agreement.

16. "Structured settlement payment rights" means rights to receive periodic

payments under a structured settlement, whether from the structured settlement

obligor or the annuity issuer, if any of the following exists:

a. One of the following is true:

(1) The payee is domiciled in this state.

(2) The domicile or principal place of business of a structured settlement

obligor or the annuity issuer is located in this state.

b. The structured settlement agreement was approved by a court or responsible

administrative authority in this state.

c. The structured settlement agreement is expressly governed by the laws of

this state.

17. "Terms of the structured settlement" means, with respect to a structured

settlement, the terms of the structured settlement agreement, the annuity

contract, any qualified assignment agreement, and any order or approval of any

court or responsible administrative authority or other government authority

authorizing or approving the structured settlement.

 

18. " Transfer " means any sale, assignment, pledge, hypothecation, or other

alienation or encumbrance of structured settlement payment rights made by a

payee for consideration. " Transfer " does not include the creation or

perfection of a security interest in structured settlement payment rights under

a blanket security agreement entered into with an insured depository

institution, in the absence of any action to redirect the structured settlement

payments to such insured depository institution, or an agent or successor in

interest thereof, or otherwise to enforce such blanket security interest

against the structured settlement payment rights.

19. " Transfer agreement" means the agreement providing for transfer of

structured settlement payment rights.

20. " Transfer expenses" means all expenses of a transfer that are required

under the transfer agreement to be paid by the payee or deducted from the gross

advance amount, including, without limitation, court filing fees, attorney

fees, escrow fees, lien recordation fees, judgment and lien search fees,

finders' fees, commissions, and other payments to a broker or other

intermediary. "Transfer expenses" does not include preexisting obligations of

the payee payable for the payee's account from the proceeds of a transfer.

21. "Transferee" means a party acquiring or proposing to acquire structured

settlement payment rights through a transfer.

Sec. 3. NEW SECTION. 682.3 REQUIRED DISCLOSURES TO PAYEE.

Not less than three days prior to the date on which a payee signs a transfer

agreement, the transferee shall provide to the payee a separate disclosure

statement, in bold type no smaller than fourteen points, setting forth all of

the following:

1. The amounts and due dates of the structured settlement payments to be

transferred.

2. The aggregate amount of the structured settlement payments.

3. The discounted present value of the payments to be transferred which shall

be identified as the "calculation of current value of the transferred

structured settlement payments under federal standards for valuing annuities",

and the amount of the applicable federal rate used in calculating the

discounted present value.

4. The gross advance amount.

5. An itemized listing of all applicable transfer expenses, other than attorney

fees and related disbursements payable in connection with the transferee's

application for approval of the transfer, and the transferee's best estimate of

the amount of any such fees and disbursements.

6. The net advance amount.

7. The amount of any penalties or liquidated damages payable by the payee in

the event of any breach of the transfer agreement by the payee.

8. A statement that the payee has the right to cancel the transfer agreement,

without penalty or further obligation, not later than the third business day

after the agreement is signed by the payee.

Sec. 4. NEW SECTION. 682.4 APPROVAL OF TRANSFERS OF STRUCTURED SETTLEMENT

PAYMENT RIGHTS.

1. A transfer of structured settlement payment rights shall not be effective

and a structured settlement obligor or annuity issuer shall not be required to

make any payment directly or indirectly to a transferee of structured

settlement payment rights unless the transfer has been approved in advance in a

final court order or order of a responsible administrative authority based on

express findings by such court or responsible administrative authority

regarding all of the following:

a. The transfer is in the best interest of the payee, taking into account the

welfare and support of the payee's dependents.

b. The payee has been advised in writing by the transferee to seek independent

professional advice regarding the transfer and has either received such advice

or knowingly waived such advice in writing.

c. The transfer does not contravene any applicable statute or the order of any

court or other government authority.

2. If the structured settlement agreement or transfer agreement includes a

provision requiring the terms of the structured settlement agreement or

transfer agreement to remain confidential, the court or responsible

administrative authority shall conduct in camera proceedings relating to the

approval of the transfer agreement and shall not include any financial terms

from the structured settlement agreement or the transfer agreement in the order

required under subsection 1.

Sec. 5. NEW SECTION. 682.5 EFFECTS OF TRANSFER OF STRUCTURED SETTLEMENT

PAYMENT RIGHTS.

1. The structured settlement obligor and the annuity issuer shall, as to all

parties except the transferee, be discharged and released from any and all

liability for the transferred payments.

2. The transferee shall be liable to the structured settlement obligor and the

annuity issuer for all of the following:

a. If the transfer contravenes the terms of the structured settlement, any

taxes incurred by the structured settlement obligor and the annuity issuer as a

consequence of the transfer.

b. Any other liabilities or costs, including reasonable costs and attorney

fees, arising from compliance by such parties with the order of the court or

responsible administrative authority or arising as a consequence of the

transferee's failure to comply with this chapter.

 

 

3. An annuity issuer and the structured settlement obligor shall not be

required to divide any periodic payment between the payee and any transferee or

assignee or between two or more transferees or assignees.

4. Any further transfer of structured settlement payment rights by the payee

may be made only after compliance with all of the requirements of this chapter.

Sec. 6. NEW SECTION. 682.6 PROCEDURE FOR APPROVAL OF TRANSFERS.

1. An application under this chapter for approval of a transfer of structured

settlement payment rights shall be made by the transferee and may be brought in

the county in which the payee resides, in the county in which the structured

settlement obligor or the annuity issuer maintains its principal place of

business, or in any court or before any responsible administrative authority

which approved the structured settlement agreement.

2. Not less than twenty days prior to the scheduled hearing on any application

for approval of a transfer of structured settlement payment rights under

section 682.4, the transferee shall file with the court or responsible

administrative authority and serve on all interested parties a notice of the

proposed transfer and the application for its authorization. All of the

following shall be included with the notice:

a. A copy of the transferee's application.

b. A copy of the transfer agreement.

c. A copy of the disclosure statement required under section 682.3.

d. A listing of each of the payee's dependents, together with each dependent's

age.

e. Notification that any interested party is entitled to support, oppose, or

otherwise respond to the transferee's application, either in person or by

counsel, by submitting written comments to the court or responsible

administrative authority, or by participating in the hearing.

f. Notification of the time and place of the hearing and notification of the

manner in which and the time by which written responses to the application must

be filed, which shall not be less than fifteen days after service of the

transferee's notice, in order to be considered by the court or responsible

administrative authority.

3. If a structured settlement agreement or transfer agreement includes a

provision requiring the terms of the structured settlement agreement or

transfer agreement to remain confidential, the financial terms of the

structured settlement agreement and the transfer agreement shall be made

available to the court or responsible administrative authority for purposes of

any in camera proceedings, but shall not be disclosed in the copies of the

transfer agreement and disclosure statement filed as a part of the public

record. Sec. 7. NEW SECTION. 682.7 GENERAL PROVISIONS -- CONSTRUCTION --

PENALTIES.

1. The provisions of this chapter shall not be waived by a payee.

2. A transfer agreement entered into on or after the thirtieth day after the

effective date of this Act by a payee who resides in this state shall provide

that disputes under the transfer agreement, including any claim that the payee

has breached the agreement, shall be determined under the laws of this state. A

transfer agreement shall not authorize the transferee or any other party to

confess judgment or consent to entry of judgment against the payee.

3. A transfer of structured settlement payment rights shall not extend to any

payments that are life-contingent unless, prior to the date on which the payee

signs the transfer agreement, the transferee has established and has agreed to

maintain procedures reasonably satisfactory to the annuity issuer and the

structured settlement obligor for both of the following:

a. Periodically confirming the payee's survival.

b. Giving the annuity issuer and the structured settlement obligor prompt

written notice in the event of the payee's death.

4. A payee who proposes to make a transfer of structured settlement payment

rights shall not incur any penalty, forfeit any application fee or other

payment, or otherwise incur any liability to the proposed transferee or any

assignee based on any failure of the transfer to satisfy the conditions of this

chapter.

5. This chapter shall not be construed to authorize any transfer of

structured settlement payment rights in contravention of any law or to imply

that any transfer under a transfer agreement entered into prior to the

effective date of this Act is valid or invalid.

6. Compliance with the requirements set forth in section 682.3 and fulfillment

of the conditions set forth in section 682.4 shall be solely the responsibility

of the transferee in any transfer of structured settlement

payment rights, and neither the structured settlement obligor nor the annuity

issuer shall bear any responsibility for, or any liability arising from,

noncompliance with the requirements or failure to fulfill the conditions.

Sec. 8. APPLICABILITY DATE. This Act shall apply to any transfer of

structured settlement payment rights under a transfer agreement entered into on

or after the thirtieth day after the effective date of this Act. Nothing

contained in this Act shall imply that any transfer under a transfer agreement

reached prior to the thirtieth day after the effective date of this Act is

effective.

MARY E. KRAMER President of the Senate

BRENT SIEGRIST Speaker of the House

I hereby certify that this bill originated in the Senate and is known as Senate

File 337, Seventy-ninth General Assembly.

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: Indiana Code ' 34-50-02 (HB 1837)

Enacted May 10, 2001

Effective July 1, 2001

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

     Chapter 2. Annuity Structured Settlements

IC 34-50-2-1
"Interested party" defined
 Sec. 1. As used in this chapter, "interested party" refers to:

        (1) the payee;
        (2) the annuity issuer;
        (3) the structured settlement agreement obligor;
        (4) the payee's counsel who assisted in the establishment of the structured settlement;
        (5) a dependent of the payee; or
        (6) a family member or relative who is acting as a caregiver for the payee.
As added by P.L.219-2001, SEC.6.

IC 34-50-2-2
"Structured settlement" defined
 Sec. 2. As used in this chapter, "structured settlement" means periodic payments of damages established by a settlement or a court judgment in resolution of a tort claim for personal injury.

As added by P.L.219-2001, SEC.6.

IC 34-50-2-3
"Transfer" defined
 Sec. 3. As used in this chapter, "transfer" means a:

        (1) sale;
        (2) assignment;
        (3) pledge;
        (4) hypothecation; or
        (5) any other form of alienation or encumbrance;
of structured settlement payment rights made by a payee for consideration.
As added by P.L.219-2001, SEC.6.

IC 34-50-2-4
"Transferee" defined
 Sec. 4. As used in this chapter, "transferee" means a party acquiring or proposing to acquire structured settlement payment rights through a transfer agreement.

As added by P.L.219-2001, SEC.6.

IC 34-50-2-5
Court approval of transfers required
 Sec. 5. A direct or indirect transfer of structured settlement payment rights is not effective, and a structured settlement obligor or annuity issuer is not required to make a payment directly or indirectly to a transferee, unless an Indiana court of competent jurisdiction has approved the transfer in a final order in accordance with sections 7 and 8 of this chapter.

 

As added by P.L.219-2001, SEC.6.

IC 34-50-2-6
Disclosure statements
 Sec. 6. Not less than ten (10) days before the date on which a payee becomes obligated under a transfer agreement, the transferee shall provide to the payee and other interested parties a disclosure statement, in boldface type of not less than fourteen (14) points in size, that includes the following:

        (1) The amounts and due dates of the structured settlement payments to be transferred under the transfer agreement.
        (2) The aggregate amount of the payments disclosed under subdivision (1).
        (3) An estimate of the present fair market value of the future periodic payments under the structured settlement agreement.
        (4) The gross amount payable to the payee as consideration for the transfer of the structured settlement payments disclosed under subdivision (1).
        (5) An itemized list of all:
            (A) commissions;
            (B) fees;
            (C) costs;
            (D) expenses; and
            (E) charges;
        payable by the payee or deductible from the gross amount payable to the payee, as disclosed under subdivision (4).
        (6) The net amount payable to the payee after any deduction is made from the gross amount payable to the payee, as described in subdivision (5).
        (7) The quotient, expressed as a percentage, obtained by dividing the net amount payable to the payee, as disclosed under subdivision (6), by the estimate of the present fair market value of the future periodic payments, as disclosed under subdivision (3).
        (8) The amount of any penalty and the aggregate amount of any liquidated damages, including penalties, payable by the payee in the event of a breach of the transfer agreement by the payee.
As added by P.L.219-2001, SEC.6.

IC 34-50-2-7
Final orders; findings
 Sec. 7. An Indiana court of competent jurisdiction may approve a transfer of structured settlement payment rights only in a final order that is based on the express findings of the court. The express findings must include all of the following:

        (1) The consideration that the payee will receive for the transfer reasonably reflects the present fair market value of the future periodic payments under the structured settlement agreement.
        (2) The transfer is in the best interest of the payee.
        (3) The transfer will not materially impair the payee's ability to

discharge the payee's obligations to the payee's dependents.
        (4) If the transferee is the applicant, the transferee has provided to the payee a disclosure statement in accordance with section 6 of this chapter.
As added by P.L.219-2001, SEC.6.

IC 34-50-2-8
Applications for approval of transfers
 Sec. 8. (a) An application under this chapter for approval of a transfer of structured settlement payment rights must be filed in:

        (1) the Indiana court in which the underlying tort action was pending; or
        (2) the court of general jurisdiction in the Indiana county in which the payee resides.
    (b) The following apply to an application filed under subsection (a):
        (1) Upon filing of the application, the court shall set a date and time for a hearing on the application not earlier than twenty (20) days after the application is filed and shall notify the applicant of the date, time, and place of the hearing. The court shall give precedence to a hearing set under this section in accordance with Indiana Trial Rule 40.
        (2) The applicant shall file with the court and shall serve on:
            (A) all interested parties;
            (B) the annuity issuer; and
            (C) the structured settlement obligor;
        in the manner prescribed in the rules of civil procedure for the service of process, a notice of the proposed transfer.
        (3) The notice required under subdivision (2) shall include:
            (A) a copy of the application;
            (B) a copy of the proposed transfer agreement, including the transferee's:
                (i) name;
                (ii) address; and
                (iii) taxpayer identification number;
            (C) a copy of the disclosure statement provided by the transferee under section 6 of this chapter whenever the application is filed by a person other than the payee;
            (D) notification of the date, time, and place of the hearing on the application; and
            (E) notification that an interested party may support, oppose, or otherwise respond to the application, either in person or by counsel, by:
                (i) submitting to the court a written response containing the interested party's support of, opposition to, or comments on the application; or
                (ii) participating in the hearing.
        (4) At the conclusion of the hearing on an application filed under subsection (a), the court may enter an order:
            (A) granting approval with or without modification; or
          (B) denying approval;
        of the transfer. If the court grants approval of the transfer, the court shall include in the order all of the express findings required under section 7 of this chapter. If the court denies the approval of the transfer, the court shall include in the order the reasons for the denial.
        (5) An order of the court made under subdivision (4) is a final and appealable order.
As added by P.L.219-2001, SEC.6.

IC 34-50-2-9
Effect of disapproval of transfers; waiver prohibited; unlawful transfers
 Sec. 9. (a) A payee who proposes to make a transfer of structured settlement payment rights does not:

        (1) incur a penalty;
        (2) forfeit an application fee or other payment; or
        (3) otherwise incur a liability to the proposed transferee;
if the transfer is not approved by a court under section 7 of this chapter.
    (b) A provision of this chapter may not be waived.
    (c) This chapter does not:
        (1) authorize a transfer of structured settlement payment rights in contravention of applicable law; or
        (2) give effect to a transfer of structured settlement payment rights that is void under applicable law.
As added by P.L.219-2001, SEC.6.

IC 34-50-2-10
Immunity
 Sec. 10. After a transfer that has been approved in accordance with this chapter, a structured settlement obligor and an annuity issuer are immune from liability to a payee, or to a party other than a transferee who is claiming through the payee, for paying structured settlement payments to a transferee.

As added by P.L.219-2001, SEC.6.

IC 34-50-2-11
Failure to provide disclosure statement as incurable deceptive act
 Sec. 11. Failure of a transferee of structured settlement payment rights to timely provide a true and complete disclosure statement to a payee under this chapter in connection with a direct or indirect transfer of structured settlement payment rights is an incurable deceptive act under IC 24-5-0.5.

As added by P.L.219-2001, SEC.6.

 

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: 215 ILCS 153/5 (IL H.B. 1268)

Enacted 8/5/2015

Effective 9/4/2015

Summary: Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court's review and approval based on showing that the proposed transfer is in the consumer's "best interests," taking into account the welfare of the consumer's dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

SB1268 Enrolled LRB099 07155 MLM 27243 b

AN ACT concerning regulation.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Structured Settlement Protection Act is amended by changing Sections 5, 10, 15, 20, 25, 30, and 35 as follows:

(215 ILCS 153/5)

Sec. 5. Definitions. For purposes of this Act:

"Annuity issuer" means an insurer that has issued a contract to fund periodic payments under a structured settlement.

"Dependents" include a payee's spouse and minor children and all other persons for whom the payee is legally obligated to provide support, including maintenance.

"Discounted present value" means the present value of future payments determined by discounting such payments to the present using the most recently published Applicable Federal Rate for determining the present value of an annuity, as issued by the United States Internal Revenue Service.

"Gross advance amount" means the sum payable to the payee or for the payee's account as consideration for a transfer of structured settlement payment rights before any reductions for transfer expenses or other deductions to be made from such consideration.

"Independent professional advice" means advice of an attorney, certified public accountant, actuary, or other licensed professional adviser.

"Interested parties" means, with respect to any structured settlement, the payee, any beneficiary irrevocably designated under the annuity contract to receive payments following the payee's death, the annuity issuer, the structured settlement obligor, and any other party to the structured settlement that has continuing rights or obligations to receive or make payments under such structured settlement.

"Net advance amount" means the gross advance amount less the aggregate amount of the actual and estimated transfer expenses required to be disclosed under item (5) of Section 10 of this Act.

"Payee" means an inpidual who is receiving tax free payments under a structured settlement and proposes to make a transfer of payment rights thereunder.

"Periodic payments" includes both recurring payments and scheduled future lump sum payments.

"Qualified assignment agreement" means an agreement providing for a qualified assignment within the meaning of Section 130 of the United States Internal Revenue Code, United States Code Title 26, as amended from time to time.

"Settled claim" means the original tort claim or workers' compensation claim resolved by a structured settlement.

"Structured settlement" means an arrangement for periodic payment of damages for personal injuries or sickness established by settlement or judgment in resolution of a tort claim.

"Structured settlement agreement" means the agreement, judgment, stipulation, or release embodying the terms of a structured settlement. "Structured settlement obligor" means, with respect to any structured settlement, the party that has the continuing obligation to make periodic payments to the payee under a structured settlement agreement or a qualified assignment agreement.

"Structured settlement payment rights" means rights to receive periodic payments under a structured settlement, whether from the structured settlement obligor or the annuity issuer, when:

(1)   the payee is domiciled in, or the domicile or principal place of business of the structured settlement obligor or the annuity issuer is located in, this State;

(2)   the structured settlement agreement was approved by a court in this State; or

(3)   the structured settlement agreement is expressly governed by the laws of this State.

"Terms of the structured settlement" include, with respect to any structured settlement, the terms of the structured settlement agreement, the annuity contract, any qualified assignment agreement, and any order or other approval of any court or other government authority that authorized or approved such structured settlement.

"Transfer" means any sale, assignment, pledge, hypothecation, or other alienation or encumbrance of structured settlement payment rights made by a payee for consideration; provided that the term "transfer" does not include the creation or perfection of a security interest in structured settlement payment rights under a blanket security agreement entered into with an insured depository institution in the absence of any action to redirect the structured settlement payments to such insured depository institution or an agent or successor in interest thereof or otherwise to enforce such blanket security interest against the structured settlement payment rights.

"Transfer agreement" means the agreement providing for a transfer of structured settlement payment rights.

"Transfer expenses" means all expenses of a transfer that are required under the transfer agreement to be paid by the payee or deducted from the gross advance amount, including, without limitation, court filing fees, attorneys fees, escrow fees, lien recordation fees, judgment and lien search fees, finders' fees, commissions, and other payments to a broker or other intermediary; "transfer expenses" do not include preexisting obligations of the payee payable for the payee's account from the proceeds of a transfer.

"Transferee" means a party acquiring or proposing to acquire structured settlement payment rights through a transfer.

(Source: P.A. 93-502, eff. 1-1-04.)

(215 ILCS 153/10)

Sec. 10. Required disclosures to payee. Not less than 10 days prior to the date on which a payee signs a transfer agreement, the transferee shall provide to the payee a separate disclosure statement, in bold type no smaller than 14 points, setting forth all of the following:

(1)   the amounts and due dates of the structured settlement payments to be transferred;

(2)   the aggregate amount of the payments;

(3)   the discounted present value of the payments to be transferred, which shall be identified as the "calculation of current value of the transferred structured settlement payments under federal standards for valuing annuities", and the amount of the Applicable Federal Rate used in calculating the discounted present value;

(4)    the gross advance amount;

(5)    an itemized listing of all applicable transfer expenses, other than attorneys' fees and related disbursements payable in connection with the transferee's application for approval of the transfer, and the transferee's best estimate of the amount of any such fees and disbursements;

(6)   the net advance amount;

(7)   the amount of any penalties or liquidated damages payable by the payee in the event of any breach of the transfer agreement by the payee; and

(8)   a statement that the payee has the right to cancel the transfer agreement, without penalty or further obligation, not later than the third business day after the date the agreement is signed by the payee; and .

(9)    the effective annual interest rate, which must be disclosed in the following statement: "Based on the net amount that you will receive from us and the amounts and timing of the structured settlement payments that you are turning over to us, you will, in effect, be paying interest to us at a rate of .... percent per year.".

(Source: P.A. 93-502, eff. 1-1-04.)

(215 ILCS 153/15)

Sec. 15. Approval of transfers of structured settlement payment rights. No direct or indirect transfer of structured settlement payment rights shall be effective and no structured settlement obligor or annuity issuer shall be required to make any payment directly or indirectly to any transferee of structured settlement payment rights unless the transfer has been approved in advance in a final court order based on express findings by such court that:

(1)   the transfer is in the best interest of the payee, taking into account the welfare and support of the payee's dependents;

(2)   the payee has been advised in writing by the transferee to seek independent professional advice regarding the transfer and has either received such advice or knowingly waived in writing the opportunity to seek and receive such advice; and

(3)   the transfer does not contravene any applicable statute or the order of any court or other government authority.

(Source: P.A. 93-502, eff. 1-1-04.)

(215 ILCS 153/20)

Sec. 20. Effects of transfer of structured settlement payment rights. Following a transfer of structured settlement payment rights approved under this Act:

(1)   the structured settlement obligor and the annuity issuer shall, as to all parties except the transferee or an assignee designated by the transferee, be discharged and released from any and all liability for the transferred payments, and the discharge and release shall not be affected by the failure of any party to the transfer to comply with this Act or with the order of the court approving the transfer;

(2)   the transferee shall be liable to the structured settlement obligor and the annuity issuer:

a.      if the transfer contravenes the terms of the structured settlement, for any taxes incurred by the parties as a consequence of the transfer; and

b.      for any other liabilities or costs, including reasonable costs and attorneys' fees, arising from compliance by the structured settlement obligor or annuity issuer with the order of the court or from failure of any party to the transfer to comply with this Act;

(3)   neither the annuity issuer nor the structured settlement obligor may be required to pide any periodic payment between the payee and any transferee or assignee or between 2 or more transferees or assignees; and

(4)   any further transfer of structured settlement payment rights by the payee may be made only after compliance with all of the requirements of this Act.

(Source: P.A. 93-502, eff. 1-1-04.)

(215 ILCS 153/25)

Sec. 25. Procedure for approval of transfers.

(a)   No annuity issuer or structured settlement obligor may make payments on a structured settlement to anyone other than the payee or beneficiary of the payee without prior approval of the circuit court. No payee or beneficiary of a payee of a structured settlement may assign in any manner the structured settlement payment rights without the prior approval of the circuit court.

(b)   An application under this Act for approval of a transfer of structured settlement payment rights shall be made by the transferee and shall be brought in the circuit court of the county in which the payee is domiciled, except that, if the payee is not domiciled in this State, the application may be filed in the court in this State that approved the structured settlement agreement or in the circuit court of the county in this State in which the structured settlement obligor or annuity issuer has its principal place of business.

(c)   A hearing shall be held on an application for approval of a transfer of structured settlement payment rights. The payee shall appear in person at the hearing unless the court determines that good cause exists to excuse the payee from appearing. Not less than 20 days prior to the scheduled hearing on an application, the transferee shall file with the court and serve on all interested parties a notice of the proposed transfer and the application, including the information and documentation required under subsection (d) of this Section.

(d)   In addition to complying with the other requirements of this Act, the application shall include:

(1)   the payee's name, age, and county of domicile and the number and ages of the payee's dependents;

(2)   a copy of the transfer agreement and disclosure statement;

(3)   a description of the reasons why the payee seeks to complete the proposed transfer;

(4)   a summary of:

1.      any prior transfers by the payee to the transferee or an affiliate, or through the transferee or an affiliate to an assignee, within the 4 years preceding the date of the transfer agreement and any proposed transfers by the payee to the transferee or an affiliate, or through the transferee or an affiliate to an assignee, applications for approval of which were denied within the 2 years preceding the date of the transfer agreement;

2.      any prior transfers by the payee to any person or entity other than the transferee or an affiliate or an assignee of a transferee or affiliate within the 3 years preceding the date of the transfer agreement and any prior proposed transfers by the payee to any person or entity other than the transferee or an affiliate or an assignee of a transferee or affiliate, applications for approval which were denied within the one year preceding the date of the current transfer agreement, to the extent that the transfers or proposed transfers have been disclosed to the transferee by the payee in writing or otherwise are actually known by the transferee;

(5)   notification that any interested party is entitled to support, oppose, or otherwise respond to the transferee's application, either in person or by counsel, by submitting written comments to the court or by participating in the hearing; and

(6)    notification of the time and place of the hearing and notification of the manner in which and the time by which written responses to the application must be filed, which shall be not less than 5 days prior to the hearing, in order to be considered by the court.

(Source: P.A. 93-502, eff. 1-1-04.)

(215 ILCS 153/30)

Sec. 30. General provisions; construction.

(a)   The provisions of this Act may not be waived by any payee.

(b)   Any transfer agreement entered into on or after the effective date of this Act by a payee who is domiciled in this State shall provide that disputes under the transfer agreement, including any claim that the payee has breached the agreement, shall be determined in and under the laws of this State. No such transfer agreement shall authorize the transferee or any other party to confess judgment or consent to entry of judgment against the payee.

(c)   No transfer of structured settlement payment rights shall extend to any payments that are life-contingent unless, prior to the date on which the payee signs the transfer agreement, the transferee has established and has agreed to maintain procedures reasonably satisfactory to the annuity issuer and the structured settlement obligor for (1) periodically confirming the payee's survival, and (2) giving the annuity issuer and the structured settlement obligor prompt written notice in the event of the payee's death.

(d)   No payee who proposes to make a transfer of structured settlement payment rights shall incur any penalty, forfeit any application fee or other payment, or otherwise incur any liability to the proposed transferee or any assignee based on any failure of the transfer to satisfy the conditions of this Act.

(e)   Nothing contained in this Act shall be construed to authorize any transfer of structured settlement payment rights in contravention of any law. A court shall not be precluded from hearing an application for approval of a transfer of payment rights under a structured settlement where the terms of the structured settlement prohibit sale, assignment, or encumbrance of such payment rights, nor shall the interested parties be precluded from waiving or asserting their rights under those terms. The court hearing an application for approval of a transfer of payment rights under such a settlement shall have authority to rule on the merits of the application and any objections to such application.

(f)     Compliance with the requirements set forth in Section 10 of this Act and fulfillment of the conditions set forth in Section 15 of this Act shall be solely the responsibility of the transferee in any transfer of structured settlement payment rights, and neither the structured settlement obligor nor the annuity issuer shall bear any responsibility for, or any liability arising from, non-compliance with those requirements or failure to fulfill those conditions.

(g)   Following issuance of a court order approving a transfer of structured settlement payment rights under this Act, the structured settlement obligor and annuity issuer may rely on the court order in redirecting future structured settlement payments to the transferee or an assignee in accordance with the order.

(h)   The changes made to this Section by this amendatory Act of the 99th General Assembly are declarative of existing law.

(Source: P.A. 93-502, eff. 1-1-04.)

(215 ILCS 153/35)

Sec. 35. Applicability. This Act shall apply to any transfer of structured settlement payment rights under a transfer agreement entered into on or after the 30th day after the effective date of this Act, including any transfer in which the structured settlement obligor and annuity issuer have affirmatively waived, or have not objected to the transfer based upon, the terms of the settlement prohibiting sale, assignment, or encumbrance of the payee's structured settlement payment rights. The changes made to this Section by this amendatory Act of the 99th General Assembly are declarative of existing law.

(Source: P.A. 93-502, eff. 1-1-04.)

Section 99. Effective date. This Act takes effect upon becoming law.

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: Idaho Code ' 28-9-109 (HB 205)

Enacted 3/26/2001

Effective 7/1/2001

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

COMMERCIAL TRANSACTIONS
CHAPTER 9
SECURED TRANSACTIONS
PART 1.
GENERAL PROVISIONS
28-9-109. SCOPE. (a) Except as otherwise provided in subsections (c) and (d), this chapter
applies to:
(1) A transaction, regardless of its form, that creates a security interest in personal
property or fixtures by contract;
(2) An agricultural lien;
(3) A sale of accounts, chattel paper, payment intangibles or promissory notes;
(4) A consignment;
(5) A security interest arising under section 28-2-401, 28-2-505, 28-2-711(3) or
28-12-508(5), as provided in section 28-9-110; and
(6) A security interest arising under section 28-4-210 or 28-5-120.
(b) The application of this chapter to a security interest in a secured obligation is not
affected by the fact that the obligation is itself secured by a transaction or interest to which this
chapter does not apply.
(c) This chapter does not apply to the extent that:
(1) A statute, regulation, or treaty of the United States preempts this chapter;
(2) Another statute of this state expressly governs the creation, perfection, priority or
enforcement of a security interest created by this state or a governmental unit of this state;
(3) A statute of another state, a foreign country, or a governmental unit of another state
or a foreign country, other than a statute generally applicable to security interests,
expressly governs creation, perfection, priority or enforcement of a security interest
created by the state, country or governmental unit; or
(4) The rights of a transferee beneficiary or nominated person under a letter of credit are
independent and superior under section 28-5-114.
(d) This chapter does not apply to:
(1) A landlord's lien, other than an agricultural lien;
(2) A lien, other than an agricultural lien, given by statute or other rule of law for
services or materials, but section 28-9-333 applies with respect to priority of the lien;
(3) An assignment of a claim for wages, salary or other compensation of an employee;
(4) A sale of accounts, chattel paper, payment intangibles or promissory notes as part of a
sale of the business out of which they arose;
(5) An assignment of accounts, chattel paper, payment intangibles or promissory notes
which is for the purpose of collection only;
(6) An assignment of a right to payment under a contract to an assignee that is also
obligated to perform under the contract;
(7) An assignment of a single account, payment intangible or promissory note to an
assignee in full or partial satisfaction of a preexisting indebtedness;
(8) A transfer of an interest in or an assignment of a claim under a policy of insurance,
other than an assignment by or to a health care provider of a health care insurance
receivable and any subsequent assignment of the right to payment, but sections 28-9-315
and 28-9-322 apply with respect to proceeds and priorities in proceeds;
(9) An assignment of a right represented by a judgment, other than a judgment taken on a
right to payment that was collateral;
(10) A right of recoupment or set-off, but:
(A) section 28-9-340 applies with respect to the effectiveness of rights of recoupment or set-off against deposit accounts; and
(B) section 28-9-404 applies with respect to defenses or claims of an account debtor;
(11) The creation or transfer of an interest in or lien on real property, including a lease or rents thereunder, except to the extent that provision is made for:
(A) liens on real property in sections 28-9-203 and 28-9-308;
(B) fixtures in section 28-9-334;
(C) fixture filings in sections 28-9-501, 28-9-502, 28-9-512, 28-9-516 and 28-9-519; and
(D) security agreements covering personal and real property in section 28-9-604;
(12) An assignment of a claim arising in tort, other than a commercial tort claim, but
sections 28-9-315 and 28-9-322 apply with respect to proceeds and priorities in proceeds;
(13) (A) A claim or right to receive compensation for injuries or sickness as described in
(i) 26 U.S.C. section 104(a)(1) and (ii) on and after the effective date of this
chapter, in 26 U.S.C. section 104(a)(2), as those sections may be amended from
time to time. Notwithstanding the foregoing, this chapter (other than sections
28-9-406(d) and 28-9-408(a) and (c), Idaho Code, in the case of transfers made on
and after the effective date of this chapter) shall apply to such compensation as
described in 26 U.S.C. section 104(a)(2) if the sale, pledge, assignment or other
transfer of rights to receive such compensation under a structured settlement is
approved by the final order of a court pursuant to, and otherwise complies with,
the requirements of paragraph (B) of this subsection.
(B) (i) Definitions. For purposes of this subsection:
1. "annuity issuer" means an insurer that has issued a contract to fund periodic payments under a structured settlement;
2. "dependents" include a payee's spouse and minor children and all other persons for whom the payee is legally obligated to provide support, including alimony;
3. "discounted present value" means the present value of future payments determined by discounting such payments to the present using the most recently published applicable federal rate for determining the present value of an annuity, as issued by the United States internal revenue service;
4. "gross advance amount" means the sum payable to the payee or for the payee's account as consideration for a transfer of structured settlement payment rights before any
reductions for transfer expenses or other deductions to be made from such consideration;
5. "independent professional advice" means advice of an attorney, certified public accountant, actuary or other licensed professional adviser;
6. "interested parties" means, with respect to any structured settlement, the payee, any beneficiary irrevocably designated under the annuity contract to receive payments
following the payee's death, the annuity issuer, the structured settlement obligor, and any
other party that has continuing rights or obligations under such structured settlement;
7. "net advance amount" means the gross advance amount less the aggregate amount of the actual and estimated transfer expenses required to be disclosed under
paragraph (B)(ii)5. of this subsection;
8. "payee" means an individual who is receiving tax free payments under a structured settlement and proposes to make a transfer of payment rights thereunder;
9. "periodic payments" includes both recurring payments and scheduled future lump sum payments;
10. "qualified assignment agreement" means an agreement providing for a qualified
assignment within the meaning of 26 U.S.C. section 130, as amended from time to time;
11. "settled claim" means the original tort claim resolved by a structured settlement;
12. "structured settlement" means an arrangement for periodic payment of damages for personal injuries or sickness established by settlement or judgment in resolution of a tort
claim;
13. "structured settlement agreement" means the agreement, judgment, stipulation, or release embodying the terms of a structured settlement;
14. "structured settlement obligor" means, with respect to any structured settlement, the party that has the continuing obligation to make periodic payments to the payee under a structured settlement agreement or a qualified assignment agreement;
15. "structured settlement payment rights" means rights to receive periodic payments under a structured settlement, whether from the structured settlement obligor or the
annuity issuer, where:
A. the payee is domiciled in, or the domicile or principal place of business of the structured settlement obligor or the annuity issuer is located in, this state; or
B. the structured settlement agreement was approved by a court in this state; or
C. the structured settlement agreement is expressly governed by the laws of this state;
16. "terms of the structured settlement" include, with respect to any structured settlement, the terms of the structured settlement agreement, the annuity contract, any qualified
assignment agreement and any order or other approval of any court or other government
authority that authorized or approved such structured settlement;
17. "transfer" means any sale, assignment, pledge, hypothecation or other alienation or encumbrance of structured settlement payment rights made by a payee for consideration; provided that the term "transfer" does not include the creation or perfection of a security interest in structured settlement payment rights under a blanket security agreement
entered into with an insured depository institution, in the absence of any action to redirect
the structured settlement payments to such insured depository institution, or an agent or
successor in interest thereof, or otherwise to enforce such blanket security interest against
the structured settlement payment rights;
18. "transfer agreement" means the agreement providing for a transfer of structured settlement payment rights;
19. "transfer expenses" means all expenses of a transfer that are required under the transfer agreement to be paid by the payee or deducted from the gross advance amount,
including, without limitation, court filing fees, attorney's fees, escrow fees, lien
recordation fees, judgment and lien search fees, finder's fees, commissions, and other
payments to a broker or other intermediary; "transfer expenses" do not include preexisting
obligations of the payee payable for the payee's account from the proceeds of a transfer;
20. "transferee" means a party acquiring or proposing to acquire structured settlement
payment rights through a transfer.
(ii) Required disclosures to payee. Not less than three (3) days prior to the date on which a payee signs a transfer agreement, the transferee shall provide to the payee a separate disclosure statement, in bold type no smaller than fourteen (14) points, setting forth:
1. the amounts and due dates of the structured settlement payments to be transferred;
2. the aggregate amount of such payments;

3. the discounted present value of the payments to be transferred, which shall be identified as the "calculation of current value of the transferred structured settlement payments under federal standards for valuing annuities," and the amount of the applicable federal rate used in calculating such discounted present value;
4. the gross advance amount;
5. an itemized listing of all applicable transfer expenses, other than attorney's fees and related disbursements payable in connection with the transferee's application for approval of the transfer, and the transferee's best estimate of the amount of any such fees and disbursements;
6. the net advance amount;
7. the amount of any penalties or liquidated damages payable by the payee in the event of any breach of the transfer agreement by the payee; and
8. a statement that the payee has the right to cancel the transfer agreement, without penalty or further obligation, not later than the third business day after the date the agreement is signed by the payee.
(iii) Approval of transfers of structured settlement payment rights.
1. No direct or indirect transfer of structured settlement payment rights shall be effective and no structured settlement obligor or annuity issuer shall be required to make any payment directly or indirectly to any transferee of structured settlement payment rights unless the transfer has been approved in advance in a final court order based on express findings by such court that:
A. the transfer is in the best interest of the payee, taking into account the welfare and support of the payee's dependents;
B. the payee has been advised in writing by the transferee to seek independent professional advice regarding the transfer and has either received such advice or knowingly waived such advice in writing; and
C. the transfer does not contravene any applicable statute or the order of any court or other government authority.
(iv) Effects of transfer of structured settlement payment rights. Following a transfer of structured settlement payment rights under this subsection:
1. The structured settlement obligor and the annuity issuer shall, as to all parties except the transferee, be discharged and released from any and all liability for the transferred payments;
2. The transferee shall be liable to the structured settlement obligor and the annuity issuer:
A. if the transfer contravenes the terms of the structured settlement, for any taxes incurred by such parties as a consequence of the transfer; and
B. for any other liabilities or costs, including reasonable costs and attorney's fees, arising from compliance by such parties with the order of the court or arising as a consequence of the transferee's failure to comply with this subsection;
3. Neither the annuity issuer nor the structured settlement obligor may be required to divide any periodic payment between the payee and any transferee or assignee or between two (2) or more transferees or assignees; and
4. Any further transfer of structured settlement payment rights by the payee may be made only after compliance with all of the requirements of this subsection.
(v) Procedure for approval of transfers.
1. An application under this subsection for approval of a transfer of structured settlement payment rights shall be made by the transferee and may be brought in the county in which the payee resides, in the county in which the structured settlement obligor or the annuity issuer maintains its principal place of business, or in any court which approved the
structured settlement agreement.
2. Not less than twenty (20) days prior to the scheduled hearing on any application for approval of a transfer of structured settlement payment rights under paragraph (B)(iii) of this subsection, the transferee shall file with the court and serve on all interested parties a notice of the proposed transfer and the application for its authorization, including with such notice:
A. a copy of the transferee's application;
B. a copy of the transfer agreement;
C. a copy of the disclosure statement required under paragraph (B)(ii) of this subsection;
D. a listing of each of the payee's dependents, together with each dependent's age;
E. notification that any interested party is entitled to support, oppose or otherwise respond to the transferee's application, either in person or by counsel, by submitting written comments to the court or by participating in the hearing; and
F. notification of the time and place of the hearing and notification of the manner in which and the time by which written responses to the application must be filed (which shall be not less than fifteen (15) days after service of the transferee's notice) in order to be considered by the court.
(vi) General provisions -- construction.
1. The provisions of this subsection may not be waived by any payee.
2. Any transfer agreement entered into on or after the effective date of this subsection by a payee who resides in this state shall provide that disputes under such transfer agreement, including any claim that the payee has breached the agreement, shall be
determined in and under the laws of this state. No such transfer agreement shall authorize
the transferee or any other party to confess judgment or consent to entry of judgment
against the payee.
3. No transfer of structured settlement payment rights shall extend to any payments that are life-contingent unless, prior to the date on which the payee signs the transfer agreement, the transferee has established and has agreed to maintain procedures reasonably satisfactory to the annuity issuer and the structured settlement obligor for (i) periodically confirming the payee's survival, and (ii) giving the annuity issuer and the
structured settlement obligor prompt written notice in the event of the payee's death.
4. No payee who proposes to make a transfer of structured settlement payment rights shall incur any penalty, forfeit any application fee or other payment, or otherwise incur any liability to the proposed transferee or any assignee based on any failure of such transfer to satisfy the conditions of this subsection.
5. Nothing contained in this subsection shall be construed to authorize any transfer of structured settlement payment rights in contravention of any law or to imply that any transfer under a transfer agreement entered into prior to the effective date of this subsection is valid or invalid.
6. Compliance with the requirements set forth in paragraph (B)(ii) of this subsection and fulfillment of the conditions set forth in paragraph (B)(iii) of this subsection shall be solely the responsibility of the transferee in any transfer of structured settlement payment rights, and neither the structured settlement obligor nor the annuity issuer shall bear any responsibility for, or any liability arising from, noncompliance with such requirements or failure to fulfill such conditions.
(vii) Effective date. This subsection shall apply to any transfer of structured settlement payment rights under a transfer agreement entered into on or after the thirtieth day after the date of enactment of this subsection; provided however, that nothing contained herein shall imply that any transfer under a transfer agreement reached prior to such date is either effective or ineffective; or
(14) A claim or right to receive benefits under a special needs trust as described in 42 U.S.C. section 1396p(d)(4), as amended from time to time.

THE IDAHO CODE IS MADE AVAILABLE ON THE INTERNET BY THE IDAHO LEGISLATURE AS A PUBLIC SERVICE. THIS INTERNET VERSION OF THE IDAHO CODE MAY NOT BE USED FOR COMMERCIAL PURPOSES, NOR MAY THIS DATABASE BE PUBLISHED OR REPACKAGED FOR COMMERCIAL SALE WITHOUT EXPRESS WRITTEN PERMISSION

Yes, you can trade structured settlement payments for upfront cash.

Statute and Bill #: HB1977

Enacted 5/26/2006

Effective 5/26/2006

Summary: Permits the sale or assignment of structured settlement payment rights, subject to a court’s review and approval based on showing that the proposed transfer is in the consumer’s "best interests," taking into account the welfare of the consumer’s dependents (if any). Requires certain disclosures and other consumer protections.

Full Text Of Bill:

Report Title:
Structured Settlement Payment Rights; Transfer
Description:
Establishes procedures for the transfer of structured settlement payment rights. (SD2)

HOUSE OF REPRESENTATIVES
TWENTY-THIRD LEGISLATURE, 2006
STATE OF HAWAII

H.B. NO. 1977 H.D. 1 S.D. 2

A BILL FOR AN ACT
RELATING TO STRUCTURED SETTLEMENTS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter
structured settlement protection act

§ -1 Definitions. As used in this chapter, unless the context otherwise requires:

"Annuity issuer" means an insurer that has issued a contract to fund periodic payments under a structured settlement.

"Dependents" include a payee's spouse and minor children and all other persons for whom the payee is legally obligated to provide support, including alimony.

"Discounted present value" means the present value of future payments, determined by discounting the payments to the present using the most recently published applicable federal rate for determining the present value of an annuity, as issued by the United States Internal Revenue Service.

"Gross advance amount" means the sum payable to the payee or for the payee's account as consideration for a transfer of structured settlement payment rights before any reductions for transfer expenses or other deductions to be made from the consideration.

"Independent professional advice" means advice of an attorney, certified public accountant, actuary, or other licensed professional adviser.

"Interested party" means, with respect to any structured settlement, the payee, any beneficiary irrevocably designated under the annuity contract to receive payments following the payee's death, the annuity issuer, the structured settlement obligor, and any other party that has continuing rights or obligations under the structured settlement.

"Net advance amount" means the gross advance amount less the aggregate amount of the actual and estimated transfer expenses required to be disclosed under section -2(5).

"Payee" means an individual who is receiving tax free payments under a structured settlement and proposes to make a transfer of the payment rights.

"Periodic payments" includes both recurring payments and scheduled future lump sum payments.

"Qualified assignment agreement" means an agreement providing for a qualified assignment within the meaning of Section 130 of the United States Internal Revenue Code, United States Code Title 26, as amended from time to time.

"Responsible administrative authority" means, with respect to a structured settlement, any government authority vested by law with exclusive jurisdiction over the settled claim resolved by the structured settlement.

"Settled claim" means the original tort claim resolved by a structured settlement.

"Structured settlement" means an arrangement for periodic payment of damages for personal injuries or sickness established by settlement or judgment in resolution of a tort claim.

"Structured settlement agreement" means the agreement, judgment, stipulation, or release embodying the terms of a structured settlement.

"Structured settlement obligor" means, with respect to any structured settlement, the party that has the continuing obligation to make periodic payments to the payee under a structured settlement agreement or a qualified assignment agreement.

"Structured settlement payment rights" means rights to receive periodic payments under a structured settlement, whether from the structured settlement obligor or the annuity issuer, where:

(1) The payee is domiciled in, or the domicile or principal place of business of the structured settlement obligor or the annuity issuer is located in, this State;

(2) The structured settlement agreement was approved by a court or responsible administrative authority in this State; or

(3) The structured settlement agreement is expressly governed by the laws of this State.

"Terms of the structured settlement" include, with respect to any structured settlement, the terms of the structured settlement agreement, the annuity contract, any qualified assignment agreement, and any order or other approval of any court or responsible administrative authority or other government authority that authorized or approved the structured settlement.

"Transfer" means any sale, assignment, pledge, hypothecation, or other alienation or encumbrance of structured settlement payment rights made by a payee for consideration; provided that the term "transfer" shall not include the creation or perfection of a security interest in structured settlement payment rights under a blanket security agreement entered into with an insured depository institution, in the absence of any action to redirect the structured settlement payments to such insured depository institution, or an agent or successor in interest, or otherwise to enforce the blanket security interest against the structured settlement payment rights.

"Transfer agreement" means the agreement providing for a transfer of structured settlement payment rights.

"Transfer expenses" means all expenses of a transfer that are required under the transfer agreement to be paid by the payee or deducted from the gross advance amount, including, without limitation, court filing fees, attorneys fees, escrow fees, lien recordation fees, judgment and lien search fees, finders' fees, commissions, and other payments to a broker or other intermediary. "Transfer expenses" shall not include preexisting obligations of the payee payable for the payee's account from the proceeds of a transfer.

"Transferee" means a party acquiring or proposing to acquire structured settlement payment rights through a transfer.

§ -2 Required disclosures to payee. Not less than three days prior to the date on which a payee signs a transfer agreement, the transferee shall provide to the payee a separate disclosure statement, in bold type no smaller than fourteen points, setting forth:

(1) The amounts and due dates of the structured settlement payments to be transferred;

(2) The aggregate amount of the payments in paragraph (1);

(3) The discounted present value of the payments to be transferred, which shall be identified as the "calculation of current value of the transferred structured settlement payments under federal standards for valuing annuities", and the amount of the applicable federal rate used in calculating the discounted present value;

(4) The gross advance amount;

(5) An itemized listing of all applicable transfer expenses, other than attorneys' fees and related disbursements payable in connection with the transferee's application for approval of the transfer, and the transferee's best estimate of the amount of any of the fees and disbursements stated in this paragraph;

(6) The net advance amount;

(7) The amount of any penalties or liquidated damages payable by the payee in the event of any breach of the transfer agreement by the payee; and

(8) A statement that the payee has the right to cancel the transfer agreement, without penalty or further obligation, not later than the third business day after the date the agreement is signed by the payee.

§ -3 Approval of transfers of structured settlement payment rights. No direct or indirect transfer of structured settlement payment rights shall be effective and no structured settlement obligor or annuity issuer shall be required to make any payment directly or indirectly to any transferee of structured settlement payment rights, unless the transfer has been approved in advance in a final court order or order of a responsible administrative authority based upon express findings by the court or responsible administrative authority that:

(1) The transfer is in the best interest of the payee, taking into account the welfare and support of the payee's dependents;

(2) The payee has been advised in writing by the transferee to seek independent professional advice regarding the transfer and has either received the advice or knowingly waived the advice in writing; and

(3) The transfer does not contravene any applicable statute or the order of any court or other government authority.

§ -4 Effects of transfer of structured settlement payment rights. Following a transfer of structured settlement payment rights under this chapter:

(1) The structured settlement obligor and the annuity issuer, as to all parties except the transferee, shall be discharged and released from any and all liability for the transferred payments;

(2) The transferee shall be liable to the structured settlement obligor and the annuity issuer:

(A) For any taxes incurred by the parties as a consequence of the transfer, if the transfer contravenes the terms of the structured settlement; and

(B) For any other liabilities or costs, including reasonable costs and attorneys' fees, arising from compliance by the parties with the order of the court or responsible administrative authority, or arising as a consequence of the transferee's failure to comply with this chapter;

(3) Neither the annuity issuer nor the structured settlement obligor may be required to divide any periodic payment between the payee and any transferee or assignee or between two or more transferees or assignees; and

(4) Any further transfer of structured settlement payment rights by the payee may be made only after compliance with all of the requirements of this chapter.

§ -5 Procedure for approval of transfers. (a) An application under this chapter for approval of a transfer of structured settlement payment rights shall be made by the transferee and may be brought in any court or before any responsible administrative authority:

(1) In the county in which the payee resides;

(2) In the county in which the structured settlement obligor or the annuity issuer maintains its principal place of business; or

(3) That approved the structured settlement agreement.

(b) To apply for approval of a transfer of structured settlement payment rights under section -3, the transferee shall file with the court or responsible administrative authority and serve on all interested parties a notice of the proposed transfer and the application for its authorization. The notice shall include:

(1) A copy of the transferee's application;

(2) A copy of the transfer agreement;

(3) A copy of the disclosure statement required under section -2;

(4) A listing of each of the payee's dependents, together with each dependent's age;

(5) Notification that any interested party is entitled to support, oppose, or otherwise respond to the transferee's application, either in person or by counsel, by submitting written comments to the court or responsible administrative a