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Alabama

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

Bill #: HB 288

Enacted 4/27/2006

Effective 8/1/2006

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:

ENROLLED, An Act, BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:Section 1. This act shall be known and referred to as the "Structured Settlement Protection Act." Section 2. As used in this act the following words and terms shall have the following meanings:

(1) ANNUITY ISSUER. An insurer that has issued a contract to fund periodic payments under a structured settlement.

(2) DEPENDENTS. 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. 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. 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. Advice of an attorney, certified public accountant, actuary, or other licensed professional adviser.

(6) INTERESTED PARTIES. 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. 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.

(8) PAYEE. 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. 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. 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. The original tort claim or workers' compensation claim resolved by a structured settlement.

(13) 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.

(14) STRUCTURED SETTLEMENT AGREEMENT. The agreement, judgment, stipulation, or release embodying the terms of a structured settlement.

(15) STRUCTURED SETTLEMENT OBLIGOR. 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. 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. 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 the structured settlement.

(18) TRANSFER. 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 does not include the creation or perfection of a security interest in structured settlement payment rights under a security agreement entered into with a bank or other insured depository institution or a subsidiary or affiliate of a bank or other insured depository institution ("secured party") until and unless the secured party redirects the structured settlement payments to such secured party, or an agent or successor in interest thereof, or otherwise enforces the security interest against the structured settlement payment rights.

(19) TRANSFER AGREEMENT. The agreement providing for a transfer of structured settlement payment rights.

(20) TRANSFER EXPENSES. 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; the term does not include preexisting obligations of the payee payable for the payee's account from the proceeds of a transfer.

(21) TRANSFEREE. A party acquiring or proposing to acquire structured settlement payment rights through a transfer; provided that the term does not include a secured party who has not received a transfer of the structured settlement payment rights as the term "transfer" is defined in subdivision (18).

Section 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 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 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.

(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. 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 determined after a factual hearing that include all of the following:

(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.

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

Section 5. (a) Following a transfer of structured settlement payment rights under this act:

(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 in the following cases: a. If the transfer contravenes the terms of the structured settlement, for any federal or state income taxes, interest, fees, and penalties incurred by the parties, including the annuity issuer and structured settlement obligor, as a consequence of the transfer. 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.

(b) 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. (c) 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. (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 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 a notice of the proposed transfer and the application for its authorization. Such notice and application shall include all of the following:

(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 a written response to the court or responsible administrative authority or by participating in the hearing.

(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 15 days after service of the transferee's notice, in order to be considered by the court or responsible administrative authority.

(c) The notice and application required by Section 6(b) above shall be served on all interested parties in the manner provided by the Alabama Rules of Civil Procedure for the service of process.

Section 7. (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 the 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 shall not 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 conditions of this act.

(e) Nothing contained in this act shall be constructed 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 the requirements or failure to fulfill the conditions. Section 8. 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; 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. Section 9. Nothing in this act shall be construed to circumvent the purposes of the Alabama Workers' Compensation Law. Section 10. Nothing in this act is intended to, or shall, require or allow the disclosure, publication, or dissemination of the terms of a settlement which is confidential, whether the confidentiality is created by agreement of the parties or by order of the court, or by both. Section 11. This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.

Alaska

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

Statute and Bill #: Alaska Stat. §09.60.200 (AK H.B. 64)

Enacted 5/14/2003

Effective 8/12/2003

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:

TITLE 9. CODE OF CIVIL PROCEDURE CHAPTER 60. COSTS AND ATTORNEY FEES; SETTLEMENTS ARTICLE 2. STRUCTURED SETTLEMENTS Alaska Stat. § 09.60.200 (2004) Sec. 09.60.200. Conditions to transfers of structured settlement payment rights and structured settlement agreements

(a) A 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 by a superior court based on the court's written express findings that

(1) the structured settlement arose from an action filed in Alaska or that could have been filed in Alaska, or the payee of the structured settlement is domiciled in Alaska;

(2) the transfer complies with the requirements of AS 09.60.200 -- 09.60.230, other applicable state and federal law, and the orders of any court;

(3) not less than 10 days before the date on which the payee first incurred an obligation with respect to the transfer, the payee has received by certified mail, return receipt requested, or other means that provide a comparable record of delivery, a disclosure statement in bold type, no smaller than 14 points, specifying

(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 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 broker's 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;

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

(E) of this paragraph;

(G) the quotient, expressed as a percentage, obtained by dividing the net payment amount by the discounted present value of the payments; and

(H) 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;

(4) the payee has established that the transfer is in the best interests of the payee and the payee's dependents;

(5) the payee has received independent professional advice regarding the legal, tax, and financial implications of the transfer;

(6) 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; and (7) 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 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.

(b) 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 may grant, deny, or impose conditions upon the proposed transfer as the court considers 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 fees arising from compliance by the issuer or obligor with the order of the court.

(c) 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.

ALASKA STATUTES TITLE 9. CODE OF CIVIL PROCEDURE CHAPTER 60.

COSTS AND ATTORNEY FEES; SETTLEMENTS ARTICLE 2. STRUCTURED SETTLEMENTS

Alaska Stat. § 09.60.210 (2004) Sec. 09.60.210. Jurisdiction; procedure for approval of transfers

(a) The superior court where the action giving rise to the structured settlement was maintained or could have been maintained or where the payee is domiciled has jurisdiction over an application for approval under AS 09.60.200 of a transfer of structured settlement payment rights.

(b) Not less than 30 days before the scheduled hearing on an application for authorization of a transfer of structured settlement payment rights under AS 09.60.200, the transferee shall file with the court 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;

(2) a copy of the transfer agreement;

(3) a copy of the disclosure statement required under AS 09.60.200;

(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 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.

(c) Written responses to the application must be filed within 15 days after service of the transferee's notice.

ALASKA STATUTES TITLE 9. CODE OF CIVIL PROCEDURE CHAPTER 60.

COSTS AND ATTORNEY FEES; SETTLEMENTS ARTICLE 2. STRUCTURED SETTLEMENTS

Alaska Stat. § 09.60.220 (2004) Sec. 09.60.220. No waiver and no penalty (a) The provisions of AS 09.60.200 -- 09.60.230 may not be waived. (b) 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 the transfer to satisfy the conditions of AS 09.60.200 -- 09.60.230.

ALASKA STATUTES TITLE 9. CODE OF CIVIL PROCEDURE CHAPTER 60.

COSTS AND ATTORNEY FEES; SETTLEMENTS ARTICLE 2. STRUCTURED SETTLEMENTS

Alaska Stat. § 09.60.230 (2004) Sec. 09.60.230. Definitions In AS 09.60.200 -- 09.60.230,

(1) "annuity issuer" means an insurer that has issued an annuity contract to be 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 spousal maintenance;

(3) "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;

(4) "independent professional advice" means advice of an attorney, certified public accountant, actuary, or other professional 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 the transfer; and

(C) whose compensation for providing the advice is not affected by whether a transfer occurs or does not occur;

(5) "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;

(6) "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;

(7) "qualified assignment agreement" means an agreement providing for a qualified assignment as provided by 26 U.S.C. 130 (United States Internal Revenue Code), as amended through December 31, 1998; (8) "settled claim" means the original tort claim or workers' compensation 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 or for periodic payments in settlement of a workers' compensation 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 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 or any other interested party is domiciled in the state;

(B) the structured settlement agreement was approved by a court in the 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" 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;

(14) "transfer" means a 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;

(16) "transferee" means a person who is receiving or will receive structured settlement payment rights resulting from a transfer.

Arizona

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

Statute and Bill #: A.R.S. § 12-2901 (AZ H.B. 2192)

Enacted 5/20/2002 Effective 8/22/2002

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

Be it enacted by the Legislature of the State of Arizona: Section 1. Title 12, Arizona Revised Statutes, is amended by adding chapter 20, to read:

CHAPTER 20 STRUCTURED SETTLEMENTS ARTICLE 1. GENERAL PROVISIONS 12-2901. DEFINITIONS IN THIS CHAPTER, UNLESS THE CONTEXT OTHERWISE REQUIRES:

1. "ANNUITY ISSUER" MEANS AN INSURER THAT HAS ISSUED A CONTRACT THAT IS USED TO FUND PERIODIC PAYMENTS UNDER A STRUCTURED SETTLEMENT.

2. "DEPENDENTS" INCLUDES 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 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.

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 THE 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 THIS CHAPTER.

8. "PAYEE" MEANS AN INDIVIDUAL WHO RECEIVES TAX-FREE DAMAGE PAYMENTS UNDER A STRUCTURED SETTLEMENT AND WHO 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 THAT PROVIDES FOR A QUALIFIED ASSIGNMENT WITHIN THE MEANING OF SECTION 130 OF THE INTERNAL REVENUE CODE AS DEFINED BY SECTION 42-1001.

11. "RESPONSIBLE ADMINISTRATIVE AUTHORITY" MEANS, WITH RESPECT TO A STRUCTURED SETTLEMENT, ANY GOVERNMENT AUTHORITY THAT IS VESTED BY LAW WITH EXCLUSIVE JURISDICTION OVER THE SETTLED CLAIM THAT IS RESOLVED BY THE STRUCTURED SETTLEMENT.

12. "SETTLED CLAIM" MEANS THE ORIGINAL TORT CLAIM OR WORKERS' COMPENSATION CLAIM THAT IS RESOLVED BY A STRUCTURED SETTLEMENT.

13. "STRUCTURED SETTLEMENT" MEANS AN ARRANGEMENT FOR PERIODIC PAYMENT OF DAMAGES FOR PERSONAL INJURIES OR SICKNESS THAT IS 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 THAT EMBODIES THE TERMS OF A STRUCTURED SETTLEMENT.

15. "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.

16. "STRUCTURED SETTLEMENT PAYMENT RIGHTS" MEANS THE RIGHT TO RECEIVE PERIODIC PAYMENTS UNDER A STRUCTURED SETTLEMENT, WHETHER FROM THE SETTLEMENT OBLIGOR OR THE ANNUITY ISSUER, IF ANY OF THE FOLLOWING APPLY: (A) THE PAYEE, THE STRUCTURED SETTLEMENT OBLIGOR, THE 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. (C) THE LAWS OF THIS STATE EXPRESSLY GOVERN THE STRUCTURED SETTLEMENT AGREEMENT.

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 THE STRUCTURED SETTLEMENT.

18. "TRANSFER" MEANS ANY SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER FORM OF ALIENATION OR ENCUMBRANCE OF STRUCTURED SETTLEMENT PAYMENT RIGHTS. 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 THE BLANKET SECURITY INTEREST AGAINST THE STRUCTURED SETTLEMENT PAYMENT RIGHTS.

19. "TRANSFER AGREEMENT" MEANS THE AGREEMENT THAT PROVIDES FOR TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS FROM A PAYEE TO A TRANSFEREE.

20. "TRANSFER EXPENSES" MEANS ALL EXPENSES OF A TRANSFER 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 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. 12-2902. PAYMENT RIGHTS; TRANSFER CONDITIONS A. DIRECT OR INDIRECT 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 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 RESPONSIBLE ADMINISTRATIVE AUTHORITY. B. BEFORE ISSUING A FINAL ORDER PURSUANT TO SUBSECTION A, THE COURT OR RESPONSIBLE ADMINISTRATIVE AUTHORITY SHALL EXPRESSLY FIND THAT:

1. THE TRANSFER COMPLIES WITH THE REQUIREMENTS OF THIS CHAPTER AND WILL NOT CONTRAVENE ANY OTHER APPLICABLE LAW.

2. NOT LESS THAN THREE DAYS BEFORE THE DATE ON WHICH THE PAYEE SIGNED THE TRANSFER AGREEMENT, THE TRANSFEREE PROVIDED TO THE PAYEE A 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 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 THAT IS PAYABLE TO THE PAYEE IN EXCHANGE FOR THE PAYMENTS.

(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 ATTORNEY FEES AND RELATED DISBURSEMENTS. (F) THE NET ADVANCE AMOUNT THAT IS PAYABLE TO THE PAYEE AFTER DEDUCTION OF ALL COMMISSIONS, FEES, COSTS, EXPENSES AND CHARGES LISTED IN SUBDIVISION (E) OF THIS PARAGRAPH.

(G) 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.

(H) THE AMOUNT OF ANY PENALTY AND THE AGGREGATE AMOUNT OF ANY LIQUIDATED DAMAGES INCLUSIVE OF PENALTIES THAT ARE 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, TAKING INTO ACCOUNT THE WELFARE AND SUPPORT OF THE PAYEE'S DEPENDENTS.

4. 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.

5. IF THE TRANSFER WOULD CONTRAVENE ANY APPLICABLE STATUTE OR THE ORDER OF ANY COURT OR OTHER GOVERNMENT AUTHORITY. C. 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.

(B) FOR 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 ACT. 12-2903. JURISDICTION: TRANSFER APPROVAL A. THE SUPERIOR COURT HAS JURISDICTION OVER ANY APPLICATION FOR AUTHORIZATION TO TRANSFER STRUCTURED SETTLEMENT PAYMENT RIGHTS PURSUANT TO SECTION 12-2902. B. NOT LESS THAN TWENTY DAYS BEFORE THE SCHEDULED HEARING ON ANY APPLICATION FOR AUTHORIZATION TO TRANSFER STRUCTURED SETTLEMENT PAYMENT RIGHTS, THE TRANSFEREE SHALL FILE WITH THE COURT A NOTICE OF THE PROPOSED TRANSFER AND THE APPLICATION FOR ITS AUTHORIZATION AND SHALL SERVE A COPY OF THE NOTICE ON ANY OTHER GOVERNMENT AUTHORITY THAT PREVIOUSLY APPROVED THE STRUCTURED SETTLEMENT, ON ALL INTERESTED PARTIES. 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 12-2902.

4. A LISTING OF EACH OF THE PAYEE'S DEPENDENTS, TOGETHER WITH EACH DEPENDENT'S AGE.

5. A STATEMENT 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 OTHER RESPONSIBLE ADMINISTRATIVE AUTHORITY OR BY PARTICIPATING IN THE HEARING.

6. THE TIME AND PLACE OF THE HEARING AND 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. AN INTERESTED PARTY SHALL HAVE AT LEAST FIFTEEN DAYS AFTER SERVICE OF THE TRANSFEREE'S NOTICE IN WHICH TO RESPOND. 12-2904. WAIVER; PENALTIES A. THE PROVISIONS OF THIS CHAPTER SHALL NOT BE WAIVED. B. A PAYEE WHO PROPOSES TO MAKE A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS SHALL NOT INURE ANY PENALTY, FORFEIT ANY APPLICATION FEE OR OTHER PAYMENT OR OTHERWISE INCUR ANY LIABILITY TO THE PROPOSED TRANSFEREE BASED ON ANY FAILURE OF THE TRANSFER TO SATISFY THE CONDITIONS SPECIFIED IN SECTION 12-2902. C. 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. A TRANSFER AGREEMENT SHALL NOT AUTHORIZE THE TRANSFEREE OR ANY OTHER PARTY TO CONFESS JUDGMENT OR CONSENT TO ENTRY OF JUDGMENT AGAINST THE PAYEE. D. A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS SHALL 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 BOTH OF THE FOLLOWING:

1. PERIODICALLY CONFIRMING THE PAYEE'S SURVIVAL.

2. GIVING THE ANNUITY ISSUER AND THE STRUCTURED SETTLEMENT OBLIGOR PROMPT WRITTEN NOTICE IF THE PAYEE DIES. E. COMPLIANCE WITH THE REQUIREMENTS AND FULFILLMENT OF THE CONDITIONS SET FORTH IN THIS CHAPTER IS THE SOLE RESPONSIBILITY OF THE TRANSFEREE IN ANY TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS, AND THE STRUCTURED SETTLEMENT OBLIGOR OR THE ANNUITY ISSUER IS NOT RESPONSIBLE FOR, OR ANY LIABILITY ARISING FROM, NON-COMPLIANCE WITH THE REQUIREMENTS OR FAILURE TO FULFILL THE REQUIREMENTS OF THIS CHAPTER.

Sec. 2. Construction Title 12, chapter 20, Arizona Revised Statutes, as added by this act, shall not 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. Sec. 3. Applicability Title 12, chapter 20, Arizona Revised Statutes, as added by this act, applies to any transfer of structured settlement payment rights under a transfer agreement that is entered into on or after the effective date of this act, except that this act shall not imply that any transfer under a transfer agreement that is reached before the effective date of this act is effective.

Arkansas

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

Statute and Bill #: Act 2215 (AR H.B. 2614)

Enacted 4/13/2005

Effective 8/12/2005

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 CONCERNING STRUCTURED SETTLEMENT PROTECTION.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:

SECTION 1. THE PURPOSE OF THIS ACT IS TO ESTABLISH PROVISIONS CONCERNING
STRUCTURED SETTLEMENT PROTECTION. [A>SECTION 1. Arkansas Code Title 23, Chapter 81, is amended to add an
additional subchapter to read as follows:<A]

[A>23-81-701. Title.
This subchapter shall be known and may be cited as the "Structured
Settlement Protection Act".
23-81-702. Definitions.
As used 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;
(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 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 are 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 § 23-81-703(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 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 of 1986, as in existence on January 1, 2005;
(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, when:
(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” 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 the structured
settlement;
(18)(A) “Transfer” means any sale, assignment, pledge,
hypothecation, or other alienation or encumbrance of structured settlement
payment rights made by a payee for consideration.
(B) However, “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, or otherwise to enforce the 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)(A) “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.
(B) “Transfer expenses” does 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.
23-81-703. 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 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 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.
23-81-704. 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 on 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.
23-81-705. 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 be discharged and released from any and all liability for the
transferred payments as to all parties except the transferee;
(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 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
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 (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 subchapter.
23-81-706. 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 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 § 23-83-704, 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 § 23-83-
703;
(4) A listing of each of the payee's dependents and 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)(A) Notification of:
(i) The time and place of the hearing; and
(ii) 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.
(B) The time by which written responses to the application
must be filed shall be not less than twenty (20) days after service of the
transferee’s notice.
23-81-707. General provisions — Construction.
(a) The provisions of this subchapter may not be waived by any payee.
(b)(1) 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 the transfer agreement, including any claim that the
payee has breached the agreement, shall be determined in and under the laws
of the State of Arkansas.
(2) 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 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 § 23-83-703 and
fulfillment of the conditions set forth in § 23-83-704 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.<A][A>SECTION 1. Arkansas Code Title 23, Chapter 81, is amended to add an
additional subchapter to read as follows:<A]

[A>23-81-701. Title.
This subchapter shall be known and may be cited as the "Structured
Settlement Protection Act".
23-81-702. Definitions.
As used 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;
(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 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 are 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 § 23-81-703(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 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 of 1986, as in existence on January 1, 2005;
(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, when:
(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” 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 the structured
settlement;
(18)(A) “Transfer” means any sale, assignment, pledge,
hypothecation, or other alienation or encumbrance of structured settlement
payment rights made by a payee for consideration.
(B) However, “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, or otherwise to enforce the 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)(A) “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.
(B) “Transfer expenses” does 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.
23-81-703. 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 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 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.
23-81-704. 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 on 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.
23-81-705. 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 be discharged and released from any and all liability for the
transferred payments as to all parties except the transferee;
(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 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
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 (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 subchapter.
23-81-706. 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 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 § 23-83-704, 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 § 23-83-
703;
(4) A listing of each of the payee's dependents and 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)(A) Notification of:
(i) The time and place of the hearing; and
(ii) 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.
(B) The time by which written responses to the application
must be filed shall be not less than twenty (20) days after service of the
transferee’s notice.
23-81-707. General provisions — Construction.
(a) The provisions of this subchapter may not be waived by any payee.
(b)(1) 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 the transfer agreement, including any claim that the
payee has breached the agreement, shall be determined in and under the laws
of the State of Arkansas.
(2) 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 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 § 23-83-703 and
fulfillment of the conditions set forth in § 23-83-704 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.<A]

California

State Statute for CA

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

Enacted10/11/2009

Effective 1/5/2010

Summary: Permits the sale or assignment of California 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, notices, and other consumer protections.

Full Text Of Bill:

California Senate Bill 510, Approved by the Governor October 11, 2009, effective January 2010.

SECTION 1. Section 10134 of the Insurance Code is amended to read:
10134. For the purposes of this article, the following terms have the following meanings:
(a) “Buyer’s first right of refusal” means any provision in the transfer agreement or related documents that obligate the payee to give to the buyer the first choice or option to purchase any remaining structured settlement rights belonging to the payee. (b) “Dependents” include the 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.
(c) “Discounted present value” means the fair present value of future payments, as 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.
(d) “Effective equivalent interest rate,” with respect to a transfer of structured settlement payment rights, means the annualized rate of interest on the net advance amount, calculated by treating the transferred structured settlement payments as if they were installment payments on a loan, with each payment applied first to accrued unpaid interest and then to principal.
(e) “Expenses” means all broker’s commissions, service charges, application or processing fees, closing costs, filing or administrative charges, legal fees, notary fees and other commissions, fees, costs, and charges that a payee would have to pay to transfer the structured settlement payment rights of a structured settlement agreement or that would be deducted from the gross consideration that would be paid to the payee in connection with the transfer of the structured settlement payment rights of a structured settlement agreement.
(f) “Independent professional advice” means advice of an attorney, certified public accountant, actuary, or other licensed professional adviser meeting all of the following requirements:
(1) The adviser is engaged by a claimant or payee to render advice concerning the legal, tax, or financial implications of a structured settlement or a transfer of structured settlement payment rights.
(2) The adviser’s compensation for rendering independent professional advice is not affected by occurrence or lack of occurrence of a settlement or transfer.
(3) 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.
(g) “Interested parties” means, with respect to a structured settlement agreement, the payee, the payee’s attorney, 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 who has continuing rights or obligations under the structured settlement agreement. If the designated beneficiary is a minor, the beneficiary’s parent or guardian shall be an interested party.
(h) “Payee” means an individual who received tax-free payments pursuant to a structured settlement agreement.
(i) “Qualified assignment agreement” means an agreement providing for a qualified assignment within the meaning of Section 130 of Title 26 of the United States Code, as amended from time to time.
(j) “Structured settlement agreement” means an arrangement for periodic payment of damages established by settlement or judgment in resolution of a tort claim in which the payment of the judgment or award is paid in whole, or in part, in periodic tax-free payments rather than a lump-sum payment. A structured settlement agreement entered into pursuant to Section 667.7 of the Code of Civil Procedure or Section 970.6 or 984 of the Government Code is not subject to the provisions of this article other than the requirements of Section 10138.
(k) “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.
(l) “Structured settlement payment rights” means rights to receive periodic payments, including lump-sum payments, pursuant to a structured settlement agreement, whether from the settlement obligor or an annuity issuer.
(m) “Terms of the structured settlement” include, with respect to a structured settlement agreement, the terms of the structured settlement agreement, annuity contract, qualified assignment agreement, and any order or approval of a court or responsible administrative authority or other governmental authority authorizing or approving the structured settlement.
(n) “Transfer” means any sale, assignment, pledge, hypothecation, or other form of alienation or encumbrance made for consideration.
(o) “Transfer agreement” means the agreement providing for the transfer, and any other document used to effectuate the transfer, from the payee to the transferee of structured settlement payment rights of a structured settlement agreement.
(p) “Transferee” means any person receiving structured settlement payment rights resulting from a transfer.

SEC. 2. Section 10135 of the Insurance Code is amended to read: 10135. (a) This article is only applicable to transfers entered into on or after January 1, 2000. (b) Notwithstanding subdivision (a), the changes to this article made by the act amending this section in the 2001–02 Regular Session shall only be applicable to transfers entered into on or after January 1, 2002. (c) This article is only applicable to transfers of structured settlement payment rights if one of the following requirements is met: (1) The payee is domiciled in California at the time the transfer agreement is signed by the payee. (2) The payee is not domiciled in California at the time the transfer agreement is signed and the state where the payee is domiciled does not have a structured settlement transfer statute, but either the structured settlement obligor or annuity issuer is domiciled in California.

SEC. 3. Section 10136 of the Insurance Code is amended to read: 10136. (a) No direct or indirect transfer of structured settlement payment rights shall be effective by a payee to which this article applies and no structured settlement obligor or annuity issuer shall be required to make any payment directly or indirectly to a transferee, unless all of the provisions of this section are satisfied. (b) Ten or more days before the payee executes a transfer agreement, the transferee shall provide the payee with a separate written disclosure statement, accurately completed with the information that applies to the transfer agreement, in substantially the following form, in at least 12-point type unless otherwise indicated (bracketed instructions shall not appear in the form):
“Disclosure Notice Required By Law
You are selling (technically called ’transferring’) your right to receive your payments under a structured settlement. You should get this disclosure notice at least 10 days before you sign any contract.
IMPORTANT TERMS:
You have agreed to sell to the transferee future payments totaling ____ dollars ($____) in exchange for a purchase price of ____ dollars ($____). Those future payments have a discounted present value equal to ____ dollars ($____), calculated by applying the discount rate of ____ percent utilized by the Internal Revenue Service to value annuities in probate proceedings.
The purchase price to be paid to you was calculated using a discount rate of ____ percent.
The purchase price payable to you is less than the present value of the future payments stated above because the discount rate of your transaction is greater than the rate utilized by the Internal Revenue Service.
For comparison purposes:
If you did not sell your right to receive structured settlement payments, but instead borrowed the net amount of $____ and paid that loan back in installments with each of the payments you are now selling, the equivalent interest rate you would be paying for that loan would be ____% per year.
[The text and information set forth above under ‘IMPORTANT TERMS’ shall be in 14-point type and circumscribed by a box with a bold border]
To figure the net amount we are paying, we have charged you for the following expenses:
[itemize in a list by type and amount]
for a total of $____ in expenses.
You should get independent professional advice about whether selling your structured settlement payments is a good idea for you and for your dependents.
You are advised to seek independent legal or financial advice regarding the transaction and, under the law, the cost of that advice, up to one thousand five hundred dollars ($1,500) will be paid by the transferee, the person or entity to whom you have agreed to transfer and assign the payments in question. The transferee or purchaser’s accountant, counsel, or actuary may not advise you in this transaction.
You also should get independent professional advice from an accountant or lawyer experienced in tax matters about any income tax consequences from selling your structured settlement payments. We cannot give you the name of anyone to advise you.
Court approval is needed [14-point boldface type]. A court must approve any agreement you sign to sell your rights under a structured settlement. You will not receive any money until the court approves the sale. Court approval could take more than 30 days following the day you sign an agreement selling your rights under a structured settlement.
A sale of future structured settlement payments will mean that you will no longer receive the future payments that are sold. You are advised to enter into this transaction only after you have carefully considered the consequences of the transaction.
You may cancel the contract before court approval [14-point boldface type]. You may cancel the agreement selling (or transferring) your rights under a structured settlement without any cost or obligation. You may cancel at any time before the court approves the contract. You will get notice of the date of the court hearing.
If you want to cancel, you do not need any special form. But, you must cancel in writing. Send your cancellation to: [insert transferee’s name and address].
If you believe that you have been treated unfairly or have been misled, you should contact your local district attorney or the state Attorney General.”
(c) The transfer agreement shall be written in at least 12-point type and shall be complete and without blank spaces to be completed after the payee’s signature. The transfer agreement shall set forth clear and conspicuously, and in no less than 12-point type, all of the following:
(1) A statement that the agreement is not effective until the date on which a court enters a final order approving the transfer agreement and that payment to the payee pursuant to the transfer agreement will be delayed up to 30 days or more after the date the payee signed the transfer agreement in order for the court to review and approve the transfer agreement.
(2) The amounts and due dates of the structured settlement payments to be transferred.
(3) The aggregate amount of the structured settlement payments to be transferred. This amount shall be disclosed in the form prescribed in subdivision (b).
(4) The aggregate amount of all expenses, if any, to be deducted from the purchase price to be paid to the payee in exchange for the payments to be transferred, and an itemization of all expenses by type and amount.
(5) The amount payable to the payee, net of all expenses, in exchange for the payments to be transferred. This amount shall be disclosed in the form prescribed in subdivision (b).
(6) The discounted present value of all structured settlement payments to be transferred and a statement that “This is the value of your structured settlement in current dollars.” This amount shall be disclosed in the form prescribed in subdivision (b).
(7) The federal rate, as described in subdivision (c) of Section 10134, used in determining the discounted present value.
(8) The effective equivalent interest rate, which shall be disclosed in the following statement:
“YOU WILL BE PAYING THE EQUIVALENT OF AN INTEREST RATE OF ____% PER YEAR.
Based on the net amount that you will receive from us and the amounts and timing of the structured settlement payments that you are transferring to us, if the transferred structured settlement payments were installment payments on a loan, with each payment applied first to accrued unpaid interest and then to principal, it would be as if you were paying interest to us of ____% per year, assuming funding on the effective date of transfer.” This percentage amount shall be disclosed in the form prescribed in subdivision (b) in the space for “the equivalent interest rate you would be paying for this loan would be ____% per year.”
(9) The quotient (expressed as a percentage) obtained by dividing the net payment amount by the discounted present value of the payments.
(10) A statement that the payee should obtain independent professional advice regarding any federal and state income tax consequences arising from the proposed transfer, and that the transferee may not refer the payee to any specific adviser for that purpose.
(11) A statement that the court approving the transfer agreement retains continuing jurisdiction to interpret and monitor implementation of the agreement as justice may require.
(12) The following statement: “If you believe you were treated unfairly or were misled as to the nature of the obligations you assumed upon entering into this agreement, you should report those circumstances to your local district attorney or the office of the Attorney General.”
(13) The following statement printed in 14-point type, circumscribed by a box with a bold border, and set forth immediately above or adjacent to the space reserved for the payee’s signature: “You have the right to cancel this agreement without any cost or obligation until the date the court approves this agreement. You will receive notice of the court hearing date when approval may occur. You must cancel in writing and send your cancellation to [insert transferee’s name and address].”
(d) The contract for transferring the structured settlement payment rights may not violate Section 10138.
(e) At any time before the date on which a court enters a final order approving the transfer agreement pursuant to Section 10139.5, the payee may cancel the transfer agreement, without cost or further obligation, by providing written notice of cancellation to the transferee.

SEC. 4. Section 10137 of the Insurance Code is amended to read: 10137. A transfer of structured settlement payment rights is void unless a court reviews and approves the transfer and finds the following conditions are met:
(a) The transfer of the structured settlement payment rights is fair and reasonable and in the best interest of the payee, taking into account the welfare and support of his or her dependents.
(b) The transfer complies with the requirements of this article, will not contravene other applicable law, and the court has reviewed and approved the transfer as provided in Section 10139.5.

SEC. 5. Section 10138 of the Insurance Code is amended to read:
10138. (a) A transfer agreement, as defined in subdivision (o) of Section 10134, shall not include any provision described in the paragraphs below. Any inclusion of a prohibited provision, with respect to a seller who is a California resident, shall make the provision void and unenforceable.
(1) Any provision that waives the seller’s right to sue under any law, or in which the seller agrees not to sue, or that waives jurisdiction or standing to sue under the contract.
(2) Any provision that requires the seller to indemnify and hold harmless the buyer, or to pay the buyer’s costs of defense, in any claim or action brought by the seller or on the seller’s behalf contesting the sale for any reason.
(3) Any provision that waives benefits or rights conferred by law with respect to garnishment of wages.
(4) Any provision providing that the contract is confidential or proprietary, belonging to the buyer.
(5) Any provision in which the seller stipulates to a confession of judgment.
(6) Any provision requiring the seller to pay the buyer’s attorney’s fees and costs if the purchase agreement is not completed.
(7) Any provision requiring the seller to pay any tax liability arising under the federal tax laws, other than the seller’s own tax liability, if any, that results from the transfer.
(8) Any provision providing for brokerage fees incurred in the contract to be deducted from the purchase price disclosed pursuant to paragraph (5) of subdivision (b) of Section 10136.
(9) If the payee is domiciled in California at the time that the transfer agreement is signed by the payee, any forum selection provision providing for jurisdiction to be in a court outside of California for any action arising under the contract.
(10) If the payee is domiciled in California at the time that the transfer agreement is signed by the payee, any choice-of-law provision that provides for controlling law to be other than California law in any action arising under the contract.
(11) A provision that provides the transferee with a security interest or collateral interest in any structured settlement payment rights that exceed the actual dollar amount of the structured settlement payment rights being transferred.
(12) Any provision that creates a “buyer’s first right of refusal” to purchase any remaining structured payment rights that the payee may desire to sell in the future.
(b) The provisions in this section may not be waived by agreement of the parties.

SEC. 6. Section 10139 of the Insurance Code is amended to read:
10139. (a) At the time of filing a petition pursuant to Section 10139.5 for court approval, the transferee shall file with the Attorney General a copy of the transferee’s petition for approval, a copy of the written disclosure statement required by subdivision (a) of Section 10136, a copy of the transfer agreement as defined in subdivision (o) of Section 10134, and, unless excepted pursuant to subparagraph (H) of paragraph (2) of subdivision (f) of Section 10139.5, a copy of the annuity contract, any qualified assignment agreement, the underlying structured settlement agreement, or any order or approval of any court or responsible administrative authority authorizing or approving the structured settlement, and a copy and proof of notice to the interested parties, and a verified statement from the transferee stating that all of the conditions set forth in Sections 10136, 10137, and 10138 have been met.
(b) The Attorney General may, but is not required to, review any transfer agreement in order to ensure that the transfer meets the requirements of this article.
(c) The Attorney General may charge a reasonable fee for the filing of the transfer agreement as provided in this section. The fee shall be paid by the transferee.
(d) This section does not apply to a transfer by a payee who is not a resident of California at the time the payee executes the transfer agreement.

SEC. 7. Section 10139.3 of the Insurance Code is amended to read:
10139.3. (a) None of the provisions of this article may be waived by the payee. (b) Compliance with the requirements set forth in Sections 10136, 10137, and 10138 shall be solely the responsibility of the transferee in any transfer of structured settlement payment rights.
(c) A payee who proposes to make a transfer of structured settlement payment rights shall not incur any penalty, shall not forfeit any application fee or other payment, and shall not otherwise incur any liability to the proposed transferee based on any failure of that transfer to satisfy the requirements of Sections 10136, 10137, and 10138.
(d) The transferee and any assignee shall be liable to the structured settlement obligor and the annuity issuer for any and all taxes incurred as a consequence of the transfer or as a consequence of any failure of the transferee or assignee to comply with this article or the terms of the structured settlement agreement.
(e) 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.

SEC. 8. Section 10139.5 of the Insurance Code is amended to read: 10139.5. (a) 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 based on express written 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 that advice or knowingly waived, in writing, the opportunity to receive the advice.
(3) The transferee has complied with the notification requirements pursuant to paragraph (2) of subdivision (f), the transferee has provided the payee with a disclosure form that complies with Section 10136, and the transfer agreement complies with Sections 10136 and 10138.
(4) The transfer does not contravene any applicable statute or the order of any court or other government authority.
(5) The payee understands the terms of the transfer agreement, including the terms set forth in the disclosure statement required by Section 10136.
(6) The payee understands and does not wish to exercise the payee’s right to cancel the transfer agreement.
(b) When determining whether the proposed transfer should be approved, including whether the transfer is fair, reasonable, and in the payee’s best interest, taking into account the welfare and support of the payee’s dependents, the court shall consider the totality of the circumstances, including, but not limited to, all of the following:
(1) The reasonable preference and desire of the payee to complete the proposed transaction, taking into account the payee’s age, mental capacity, legal knowledge, and apparent maturity level.
(2) The stated purpose of the transfer.
(3) The payee’s financial and economic situation.
(4) The terms of the transaction, including whether the payee is transferring monthly or lump sum payments or all or a portion of his or her future payments.
(5) Whether, when the settlement was completed, the future periodic payments that are the subject of the proposed transfer were intended to pay for the future medical care and treatment of the payee relating to injuries sustained by the payee in the incident that was the subject of the settlement and whether the payee still needs those future payments to pay for that future care and treatment.
(6) Whether, when the settlement was completed, the future periodic payments that are the subject of the proposed transfer were intended to provide for the necessary living expenses of the payee and whether the payee still needs the future structured settlement payments to pay for future necessary living expenses.
(7) Whether the payee is, at the time of the proposed transfer, likely to require future medical care and treatment for the injuries that the payee sustained in connection with the incident that was the subject of the settlement and whether the payee lacks other resources, including insurance, sufficient to cover those future medical expenses.
(8) Whether the payee has other means of income or support, aside from the structured settlement payments that are the subject of the proposed transfer, sufficient to meet the payee’s future financial obligations for maintenance and support of the payee’s dependents, specifically including, but not limited to, the payee’s child support obligations, if any. The payee shall disclose to the transferee and the court his or her court-ordered child support or maintenance obligations for the court’s consideration. (9) Whether the financial terms of the transaction, including the discount rate applied to determine the amount to be paid to the payee, the expenses and costs of the transaction for both the payee and the transferee, the size of the transaction, the available financial alternatives to the payee to achieve the payee’s stated objectives, are fair and reasonable.
(10) Whether the payee completed previous transactions involving the payee’s structured settlement payments and the timing and size of the previous transactions and whether the payee was satisfied with any previous transaction.
(11) Whether the transferee attempted previous transactions involving the payee’s structured settlement payments that were denied, or that were dismissed or withdrawn prior to a decision on the merits, within the past five years.
(12) Whether, to the best of the transferee’s knowledge after making inquiry with the payee, the payee has attempted structured settlement payment transfer transactions with another person or entity, other than the transferee, that were denied, or which were dismissed or withdrawn prior to a decision on the merits, within the past five years.
(13) Whether the payee, or his or her family or dependents, are in or are facing a hardship situation.
(14) Whether the payee received independent legal or financial advice regarding the transaction. The court may deny or defer ruling on the petition for approval of a transfer of structured settlement payment rights if the court believes that the payee does not fully understand the proposed transaction and that independent legal or financial advice regarding the transaction should be obtained by the payee.
(15) Any other factors or facts that the payee, the transferee, or any other interested party calls to the attention of the reviewing court or that the court determines should be considered in reviewing the transfer.
(c) Every petition for approval of a transfer of structured settlement payment rights, except as provided in subdivision (d), shall include, to the extent known after the transferee has made reasonable inquiry with the payee, all of the following:
(1) The payee’s name, address, and age.
(2) The payee’s marital status, and, if married or separated, the name of the payee’s spouse.
(3) The names, ages, and place or places of residence of the payee’s minor children or other dependents, if any.
(4) The amounts and sources of the payee’s monthly income and financial resources and, if presently married, the amounts and sources of the monthly income and financial resources of the payee’s spouse.
(5) Whether the payee is currently obligated under any child support or spousal support order, and, if so, the names, addresses, and telephone numbers of any individual, entity, or agency that is receiving child or spousal support from the payee under that order or that has jurisdiction over the order or the payments in question.
(6) Information regarding previous transfers or attempted transfers, as described in paragraph (11), (12), or (13) of subdivision (b). The transferee or payee may choose to provide this information by providing copies of pleadings, transaction documents, or orders involving any previous attempted or completed transfer or by providing the court a summary of available information regarding any previous transfer or attempted transfer, such as the date of the transfer or attempted transfer, the payments transferred or attempted to be transferred by the payee in the earlier transaction, the amount of money received by the payee in connection with the previous transaction, and generally the payee’s reasons for pursuing or completing a previous transaction. The transferee’s inability to provide the information required by this paragraph shall not preclude the court from approving the proposed transfer, if the court determines that the information is not available to the transferee after the transferee has made a reasonable effort to secure the information, including making an inquiry with the payee.
(d) With respect to the information required to be included in every petition for approval of a transfer of structured settlement payment rights pursuant to paragraphs (2), (3), (4), (5), and (6) of subdivision (c), that information shall be deemed to be included in the petition if it is provided at the scheduled hearing on the proposed transfer through oral testimony or documentary evidence filed with the court and made a part of the record consistent with the rules of evidence and procedure.
(e) Following a transfer of structured settlement payment rights under this article:
(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 if the transfer contravenes the terms of the structured settlement for the following:
(A) Any taxes incurred by those parties as a consequence of the transfer.
(B) 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 article.
(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 article.
(f) (1) A petition under this article for approval of a transfer of structured settlement payment rights shall be made by the transferee and brought in the county in which the payee resides at the time the transfer agreement is signed by the payee, or, if the payee is not domiciled in California, in the county in which the payee resides or in the county where the structured settlement obligor or annuity issuer is domiciled.
(2) Not less than 20 days prior to the scheduled hearing on any petition for approval of a transfer of structured settlement payment rights under this article, the transferee shall file with the court and serve on all interested parties a notice of the proposed transfer and the petition for its authorization, and shall include the following with that notice:
(A) A copy of the transferee’s current petition and any other prior petition, whether approved or withdrawn, that was filed with the court in accordance with paragraph (6) of subdivision (c).
(B) A copy of the proposed transfer agreement and disclosure form required by paragraph (3) of subdivision (a).
(C) A listing of each of the payee’s dependents, together with each dependent’s age.
(D) A copy of the disclosure required in subdivision (b) of Section 10136.
(E) A copy of the annuity contract, if available.
(F) A copy of any qualified assignment agreement, if available.
(G) A copy of the underlying structured settlement agreement, if available.
(H) If a copy of a document described in subparagraph (E), (F), or (G) is unavailable or cannot be located, then the transferee is not required to attach a copy of that document to the petition or notice of the proposed transfer if the transferee satisfies the court that reasonable efforts to locate and secure a copy of the document have been made, including making inquiry with the payee. If the documents are available, but contain a confidentiality or nondisclosure provision, then the transferee shall summarize in the petition the payments due and owing to the payee, and, if requested by the court, shall provide copies of the documents to the court at a scheduled hearing.
(I) Proof of service showing compliance with the notification requirements of this section.
(J) Notification that any interested party is entitled to support, oppose, or otherwise respond to the transferee’s petition, either in person or by counsel, by submitting written comments to the court or by participating in the hearing.
(K) 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 may not be less than 15 days after service of the transferee’s notice, in order to be considered by the court.
(L) If the payee entered into the structured settlement at issue within five years prior to the date of the transfer agreement, then the transferee shall provide the following notice to the payee’s attorney of record at the time the structured settlement was created, if the attorney is licensed to practice in California, at the attorney’s address on file with the State Bar of California. The notice shall be delivered by regular mail and shall contain the following language:
“Your former client, (insert name, address and telephone number of payee), the ‘payee,’ has entered into a contract with (insert name of transferee) to transfer and assign certain future structured settlement payment rights. The transaction is subject to court review and approval under California law. As the payee’s former attorney, you are entitled to receive this notice. You are not required to represent, advise, or consult with the payee in connection with the proposed transaction. You are not required to take any action at all in response to this notice. You may, but are not required to, contact the payee regarding the transaction. The payee is not required to consult with you or provide you any information regarding the transaction, but the payee may do so if he or she wishes.”
The notice to the former attorney described in this section is not required to be provided if the payee in the transaction was not a party to the original structured settlement at issue (for example, if the payee is an heir or beneficiary of the person who was a party to the original structured settlement). Also, if the payee cannot recall or identify his or her former attorney and if the identity of the former attorney cannot be ascertained from the available structured settlement documents, then the notice described in this subparagraph is not required to be provided and the transfer may proceed without the notice.
(g) All court costs and filing fees shall be paid by the transferee.
(h) No later than the time of filing the petition for court approval, the transferee shall advise the payee of the payee’s right to seek independent counsel and financial advice in connection with the transferee’s petition for court approval of the transfer agreement, and shall further advise the payee that if the payee retains counsel, a licensed certified public accountant, or a licensed actuary in connection with a petition for an order approving the transfer agreement, that the transferee shall pay the fees of the payee’s counsel, accountant, or actuary, regardless of whether the transfer agreement is approved, and regardless of whether the attorney, accountant, or actuary files any document or appears at the hearing on the petition for transfer, in an aggregate amount not to exceed one thousand five hundred dollars ($1,500). The transferee’s accountant, counsel, or actuary may not advise the payee.
(i) The court shall retain continuing jurisdiction to interpret and monitor the implementation and closing of the transaction that is the subject of the transfer agreement as justice requires.


Colorado

State Statute for CO

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

Statute and Bill #: SB 98

Enacted 4/20/2004

Effective 7/1/2004

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:

CONCERNING THE ESTABLISHMENT OF A " STRUCTURED SETTLEMENT PROTECTION ACT".

DIGEST: Bill Summary
(Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments that may be subsequently adopted.)
For the transfer of rights under a structured settlement agreement:
* Specifies required disclosures to the payee;
* Requires approval of the transfer by a court or responsible administrative authority;
* Specifies effects of the transfer on interested parties; and
* Establishes a procedure for approval of the transfer.

Text:
Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. Title 13, Colorado Revised Statutes, is amended BY THE ADDITION OF A
NEW ARTICLE to read: ARTICLE 23 Structured Settlement Protection Act

13-23-101. Short title. THIS ARTICLE SHALL BE KNOWN AND MAY BE CITED AS THE "
STRUCTURED SETTLEMENT PROTECTION ACT".

13-23-102. Definitions. AS USED IN THIS ARTICLE, UNLESS THE CONTEXT OTHERWISE
REQUIRES:
(1) "ANNUITY ISSUER" MEANS AN INSURER THAT HAS ISSUED A CONTRACT TO FUND
PERIODIC PAYMENTS UNDER A STRUCTURED SETTLEMENT.
(2) "DEPENDENT" MEANS A PAYEE'S SPOUSE, MINOR CHILD, OR ANY PERSON FOR WHOM THE
PAYEE IS LEGALLY OBLIGATED TO PROVIDE SUPPORT, INCLUDING MAINTENANCE.
(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
ARE 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 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 WHO HAS CONTINUING RIGHTS OR OBLIGATIONS UNDER SUCH STRUCTURED
SETTLEMENT. IF A DELEGATE CHILD SUPPORT ENFORCEMENT UNIT IS ENFORCING A PAYEE'S
LEGAL OBLIGATION TO SUPPORT HIS OR HER DEPENDENT CHILDREN, PURSUANT TO SECTION
26-13-105, C.R.S., "INTERESTED PARTIES" SHALL ALSO INCLUDE THE DELEGATE CHILD
SUPPORT ENFORCEMENT UNIT.
(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 13-23-103.
(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
THEREUNDER.
(9) "PERIODIC PAYMENT" MEANS A RECURRING PAYMENT OR A SCHEDULED FUTURE LUMP SUM
PAYMENT.
(10) "QUALIFIED ASSIGNMENT AGREEMENT" MEANS AN AGREEMENT PROVIDING FOR A
QUALIFIED ASSIGNMENT WITHIN THE MEANING OF SECTION 130 OF THE FEDERAL "INTERNAL
REVENUE CODE OF 1986", AS AMENDED.
(11) "RESPONSIBLE ADMINISTRATIVE AUTHORITY" MEANS 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 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.
(14) " STRUCTURED SETTLEMENT AGREEMENT" MEANS THE AGREEMENT, JUDGMENT,
STIPULATION, OR RELEASE EMBODYING THE TERMS OF A STRUCTURED SETTLEMENT.
(15) " STRUCTURED SETTLEMENT OBLIGOR" MEANS THE PARTY WHO 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 RIGHT" MEANS THE RIGHT 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 COLORADO, OR THE DOMICILE OR PRINCIPAL PLACE OF
BUSINESS OF THE STRUCTURED SETTLEMENT OBLIGOR OR THE ANNUITY ISSUER IS
COLORADO; OR
(b) THE STRUCTURED SETTLEMENT AGREEMENT WAS APPROVED BY A COURT OR RESPONSIBLE
ADMINISTRATIVE AUTHORITY IN COLORADO; OR
(c) THE STRUCTURED SETTLEMENT AGREEMENT IS EXPRESSLY GOVERNED BY THE LAWS OF
COLORADO.
(17) "TERMS OF THE STRUCTURED SETTLEMENT " MEANS THE TERMS OF THE STRUCTURED
SETTLEMENT AGREEMENT, THE ANNUITY CONTRACT, A QUALIFIED ASSIGNMENT AGREEMENT,
AND ANY ORDER OR OTHER APPROVAL OF A COURT OR RESPONSIBLE ADMINISTRATIVE
AUTHORITY OR OTHER GOVERNMENT AUTHORITY THAT AUTHORIZED OR APPROVED SUCH
STRUCTURED SETTLEMENT.
(18) "TRANSFER" MEANS A SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION, OR OTHER
ALIENATION OR ENCUMBRANCE OF A STRUCTURED SETTLEMENT PAYMENT RIGHT MADE BY A
PAYEE FOR CONSIDERATION; EXCEPT THAT THE TERM "TRANSFER" 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 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 A
STRUCTURED SETTLEMENT PAYMENT RIGHT.
(20) "TRANSFEREE" MEANS A PARTY ACQUIRING OR PROPOSING TO ACQUIRE A
STRUCTURED SETTLEMENT PAYMENT RIGHT THROUGH A TRANSFER.
(21) "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.

13-23-103. Required disclosures to payee. (1) NOT FEWER 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:
(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 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 ATTORNEY FEES AND RELATED DISBURSEMENTS;
(f) THE NET ADVANCE AMOUNT;
(g) 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; 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.

13-23-104. Approval of transfers of structured settlement payment rights.
(1) A DIRECT OR INDIRECT TRANSFER OF A STRUCTURED SETTLEMENT PAYMENT RIGHT SHALL NOT
BE EFFECTIVE AND A STRUCTURED SETTLEMENT OBLIGOR OR ANNUITY ISSUER SHALL NOT
BE REQUIRED TO MAKE A PAYMENT DIRECTLY OR INDIRECTLY TO A TRANSFEREE OF A
STRUCTURED SETTLEMENT PAYMENT RIGHT 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 INTERESTS 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 AND WILLINGLY 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.

13-23-105. Effect of transfer of structured settlement payment right.
(1) FOLLOWING A TRANSFER OF A STRUCTURED SETTLEMENT PAYMENT RIGHT PURSUANT TO THIS ARTICLE:
(a) THE STRUCTURED SETTLEMENT OBLIGOR AND THE ANNUITY ISSUER SHALL, AS TO ALL
PARTIES EXCEPT THE TRANSFEREE, BE DISCHARGED AND RELEASED FROM 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 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 THE PROVISIONS OF THIS ARTICLE;
(c) NEITHER THE ANNUITY ISSUER NOR THE STRUCTURED SETTLEMENT OBLIGOR MAY BE
REQUIRED TO DIVIDE ANY PERIODIC PAYMENT BETWEEN THE PAYEE AND A 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 ARTICLE.

13-23-106. Procedure for approval of transfer.
(1) AN APPLICATION UNDER THIS
ARTICLE FOR APPROVAL OF A TRANSFER OF A STRUCTURED SETTLEMENT PAYMENT RIGHT
SHALL BE MADE BY THE TRANSFEREE AND MAY BE BROUGHT:
(a) IN THE DISTRICT COURT FOR THE COUNTY IN WHICH THE PAYEE RESIDES;
(b) IN THE DISTRICT COURT FOR THE COUNTY IN WHICH THE STRUCTURED SETTLEMENT
OBLIGOR OR THE ANNUITY ISSUER MAINTAINS ITS PRINCIPAL PLACE OF BUSINESS; OR
(c) IN ANY COURT OR BEFORE ANY RESPONSIBLE ADMINISTRATIVE AUTHORITY THAT
APPROVED THE STRUCTURED SETTLEMENT AGREEMENT.
(2) NOT FEWER THAN TWENTY DAYS PRIOR TO THE SCHEDULED HEARING ON AN APPLICATION
FOR APPROVAL OF A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS UNDER
SECTION 13-23-104, 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 TRANSFEREE
SHALL FILE AND SERVE:
(a) A COPY OF THE TRANSFEREE'S APPLICATION;
(b) A COPY OF THE TRANSFER AGREEMENT;
(c) A COPY OF THE DISCLOSURE STATEMENT REQUIRED PURSUANT TO SECTION 13-23-103;
(d) A LISTING OF EACH OF THE PAYEE'S DEPENDENTS, TOGETHER WITH EACH DEPENDENT'S
AGE;
(e) A 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) A 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 FEWER THAN FIFTEEN DAYS AFTER SERVICE OF THE
TRANSFEREE'S NOTICE, IN ORDER TO BE CONSIDERED BY THE COURT OR RESPONSIBLE
ADMINISTRATIVE AUTHORITY.

13-23-107. General provisions - construction.
(1) THE PROVISIONS OF THIS
ARTICLE MAY NOT BE WAIVED BY ANY PAYEE.
(2) ANY TRANSFER AGREEMENT ENTERED INTO ON OR AFTER JULY 1, 2004, BY A PAYEE
WHO RESIDES IN COLORADO 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 COLORADO. 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) 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 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.
(4) A PAYEE WHO PROPOSES TO MAKE A TRANSFER OF A STRUCTURED SETTLEMENT PAYMENT
RIGHT 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 A FAILURE OF SUCH TRANSFER TO SATISFY THE CONDITIONS OF THIS
ARTICLE.
(5) NOTHING CONTAINED IN THIS ARTICLE SHALL BE CONSTRUED TO AUTHORIZE A
TRANSFER OF A STRUCTURED SETTLEMENT PAYMENT RIGHT IN CONTRAVENTION OF ANY LAW
OR TO IMPLY THAT A TRANSFER UNDER A TRANSFER AGREEMENT ENTERED INTO PRIOR TO
JULY 1, 2004, IS VALID OR INVALID.
(6) COMPLIANCE WITH THE REQUIREMENTS SET FORTH IN SECTION 13-23-103 AND
FULFILLMENT OF THE CONDITIONS SET FORTH IN SECTION 13-23-104 SHALL BE SOLELY
THE RESPONSIBILITY OF THE TRANSFEREE IN A TRANSFER OF STRUCTURED SETTLEMENT
PAYMENT RIGHTS, AND NEITHER THE STRUCTURED SETTLEMENT OBLIGOR NOR THE ANNUITY
ISSUER SHALL BEAR RESPONSIBILITY FOR, OR ANY LIABILITY ARISING FROM,
NON-COMPLIANCE WITH SUCH REQUIREMENTS OR FAILURE TO FULFILL SUCH CONDITIONS.

13-23-108. Exceptions - judgment for periodic payment against a health care
professional or institution - assignment of workers' compensation benefits.
NOTHING IN THIS ARTICLE SHALL APPLY TO A JUDGMENT ENTERED PURSUANT TO THE
PROVISIONS OF PART 2 OF ARTICLE 64 OF THIS TITLE OR TO COMPENSATION OR BENEFITS
DUE UNDER ARTICLES 40 TO 47 OF TITLE 8, C.R.S.
SECTION 2. Effective date - applicability. This act shall take effect July 1,
2004, and shall apply to agreements to transfer a structured settlement
payment right executed on or after said date.
SECTION 3. Safety clause. The general assembly hereby finds, determines, and
declares that this act is necessary for the immediate preservation of the
public peace, health, and safety.
Sponsor:
Hanna

Connecticut

State Statute for CT

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

Statute and Bill #: Conn. Gen. Stat. § 52-225f (CT S.B. 1059)

Enacted 6/18/2003 5/14/2003 5/14/2003

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:

convened:

Section 1. (NEW) (Effective October 1, 2003) For the purposes of sections 1 to

6, inclusive, of this act:

(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 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 subdivision (5) of section 2 of this act;

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

structured settlement and proposes to transfer 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 of 1986, or any subsequent corresponding internal revenue code of the

United States, as from time to time 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

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, but 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, but not limited to, 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, but does 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.

Sec. 2. (NEW) (Effective October 1, 2003) Not less than three days prior to the

date on which the payee signs a transfer agreement, the transferee shall

provide to the payee a separate disclosure statement, in boldface type at least

fourteen points in size, 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.

Sec. 3. (NEW) (Effective October 1, 2003) 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 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.

Sec. 4. (NEW) (Effective October 1, 2003) Following a transfer of structured

settlement payment rights under sections 1 to 6, inclusive, of this act:

(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 responsible administrative authority or arising as a consequence of

the transferee's failure to comply with sections 1 to 6, inclusive, of this act;

(3) 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

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

may be made only after compliance with all of the requirements of sections 1 to

6, inclusive, of this act.

Sec. 5. (NEW) (Effective October 1, 2003) (a) An application under sections 1

to 6, inclusive, of this act for approval of a transfer of structured

settlement payment rights shall be made by the transferee and may be brought in

the superior court for the judicial district in which the payee resides or in

which the structured settlement obligor or annuity issuer maintains its

principal place of business or in the superior court or before the responsible

administrative authority that approved the structured settlement agreement.

(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

section 3 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 approval, 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 2 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 days after service of the

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

administrative authority.

Sec. 6. (NEW) (Effective October 1, 2003) (a) The provisions of sections 1 to

6, inclusive, of this act may not be waived by any payee.

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

section 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 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) 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 sections 1 to 6,

inclusive, of this act.

(e) Nothing contained in sections 1 to 6, inclusive, of 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 section is valid or

invalid.

(f) Compliance with the requirements set forth in section 2 of this act and

fulfillment of the conditions set forth in section 3 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.

(g) The provisions of sections 1 to 6, inclusive, of this act shall be

applicable to transfer agreements executed on and after October 1, 2003.

Sec. 7. Section 52-225f of the general statutes is repealed and the following

is substituted in lieu thereof (Effective October 1, 2003):

(a) For purposes of this section:

(1) 'Annuity issuer' means an insurer that has issued any insurance contract

used to fund periodic payments under a structured settlement;

(2) 'Expenses' means all broker's commissions, service charges, application or

processing fees, closing costs, filing or administrative charges, legal fees,

notary fees and other commissions, fees, costs and charges payable by the payee

in connection with the proposed transfer or deductible from the gross

consideration that would be paid to the payee in connection with the transfer;

(3) 'Interested parties' means, with respect to any structured settlement, the

payee, any beneficiary designated 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 and the structured

settlement obligor;

(4) 'Payee' means an individual who is receiving payments under a structured

settlement and proposes to make a transfer of payment rights thereunder;

(5) 'Structured settlement' means an arrangement for periodic payment of

damages established by settlement or judgment in resolution of a tort claim or

for periodic payments in settlement of a workers' compensation claim;

(6) '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 under an agreement

providing for a qualified assignment within the meaning of Section 130 of the

Internal Revenue Code of 1986, or any subsequent corresponding internal revenue

code of the United States, as from time to time amended;

(7) '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;

(8) 'Transfer' means any sale, assignment, pledge, hypothecation or other form

of alienation or encumbrance made for consideration;

 

(9) 'Transfer agreement' means the agreement providing for transfer of

structured settlement payment rights from a payee to a transferee; and

(10) 'Transferee' means any person receiving structured settlement payment

rights resulting from a transfer.

(b) No transfer of structured settlement payment rights, either directly or

indirectly, shall be effective by any payee domiciled in this state or by any

payee entitled to receive payments under a structured settlement funded by an

insurance contract issued by an insurer domiciled in this state or owned by an

insurer or corporation domiciled in this state and no structured settlement

obligor or annuity issuer shall be required to make any payment directly or

indirectly to any transferee of any such transfer unless (1) not less than ten

days prior to the date on which the payee entered into the transfer agreement,

the transferee provided to the payee a written disclosure statement 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 gross amount of

all expenses; (D) the amount payable to the payee, net of all expenses, in

exchange for the payments; (E) the discounted present value of all structured

settlement payments to be transferred and the discount rate used in determining

such discounted present value; and (F) a statement that the payee may be

subject to adverse federal and state income tax consequences as a result of the

proposed transfer; and (2) such transfer has been approved by a court pursuant

to subsection (c) of this section.

(c) (1) Prior to any transfer, the payee entitled to receive payments under

such structured settlement shall commence a declaratory judgment action under

section 52-29 for a determination as to whether the transfer of such structured

settlement payment rights is in the best interests of the payee and is fair and

reasonable to all interested parties under all of the circumstances then

existing. The annuity issuer and the structured settlement obligor shall be

made parties to such action. If the court determines, after hearing, that such

transfer should be allowed, it shall approve such transfer upon such terms and

conditions as it deems appropriate.

(2) The court in which the original action was or could have been filed or the

court which has jurisdiction where the applicant resides shall have

jurisdiction over any such action.

(3) The payee shall cause notice of the action to be served on all

interested parties by a proper officer or other person lawfully empowered to

make service. The notice of the action shall include (A) a copy of the payee's

application to the court for approval of the transfer, (B) a copy of the

disclosure statement required under subsection (b) of this section and (C)

notice of the hearing.

(4) The payee may seek an order setting the deadline for the filing of written

objections. The payee shall give notice to all interested parties of the

deadline for filing objections whether such deadline has been established by

court order or by operation of the general statutes or court rule. Notice shall

be mailed to all interested parties at least ten days before such deadline.

 

(5) The court shall hold a hearing on the application. The payee shall give

notice of the hearing to all interested parties.

(d) Nothing contained in this section shall imply that any transfer under a

transfer agreement dated prior to October 1, 1998, is binding upon any

interested party or that any annuity issuer or structured settlement obligor is

under any obligation to make transferred payments to the transferee of any such

prior transfer.

(e) The provisions of this section may not be waived.

(F) THE PROVISIONS OF THIS SECTION SHALL BE APPLICABLE TO TRANSFER AGREEMENTS

EXECUTED ON AND AFTER OCTOBER 1, 1998, AND PRIOR TO OCTOBER 1, 2003.

Approved June 18, 2003

Delaware

State Statute for DE

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

Statute and Bill #: 10 Del. C. € 6601, et. seq., (HB 392)

Enacted 5/26/2000

Effective 6/27/2000

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:

Delaware Structured Settlement Protection Act

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend Part IV, Title 10 of the Delaware Code by adding thereto a new
Chapter, designated as Chapter 66, which new Chapter shall read as follows:

"CHAPTER 66. STRUCTURED SETTLEMENTS

Section 6601. Conditions to 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
authorized in advance in a final order of a court of competent jurisdiction or
responsible administrative authority, based on express findings by such court
or responsible administrative authority that:
(1) the transfer complies with the requirements of this Chapter and will not
contravene other applicable law;
(2) not less than ten (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 small than 14
points, setting forth:
(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 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 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;
(vi) the net amount payable to the payee after deduction of all commissions,
fees, costs, expenses and charges described in subparagraph (v) of this
paragraph;
(vii) the quotient (expressed as a percentage) obtained by dividing the net
payment amount by the discounted present value of the payments; and
(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 transfer is fair and reasonable and in the best interests of the payee
and the payee's dependents;"
(4) the payee has received independent professional advice regarding the legal,
tax and financial implications 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. each interested party; provided, however, that the approval of the annuity
issuer and the structured settlement obligor shall not be required if all other
interested parties approve the transfer and waive any and all rights to require
that the transferred payments be made to the payee in accordance with the terms
of the structured settlement; 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, which previously approved the structured settlement; and
(ii) signed originals of all approvals required under subparagraph (I) of this
paragraph 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;
and
(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 6602. Definitions
The following words, terms and phrases, when used in this Chapter, shall have
the meanings ascribed to them, except where the context clearly indicates a
different meaning:
(a) "Annuity issuer" shall mean an insurer that has issued an insurance
contract used to fund periodic payments under a structured settlement;
(b) "Applicable law" shall mean:
(i) the federal laws of the United States;
(ii)the laws of this State, including principles of equity applied in the
courts of this State; and
(iii) the laws of any other jurisdiction:
a. which is the domicile of the payee or any other interested party;
b. under whose laws a structured settlement agreement was approved by a court;
or
c. in whose courts a settled claim was pending when the parties entered into a
structured settlement agreement;
(c) "Dependents" shall 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;
(d) "Discounted present value" shall mean 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;
(e) "Favorable tax determination" shall mean, with respect to a proposed
transfer of structured settlement payment rights, any of the following
authorities 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:
(i) a provision of the United States Internal Revenue Code, United States Code
Title 26, as amended from time to time, or a United States Treasury regulation
adopted pursuant thereto;
(ii) a revenue ruling or revenue procedure issued by the United States Internal
Revenue Service;
(iii) a private letter ruling by the United States Internal Revenue Service
with respect to such transfer;
(iv) a decision of the United States Supreme Court or a decision of a lower
federal court in which the United States Internal Revenue Service has
acquiesced;
(f) "Federal hardship standard" shall mean a federal standard applicable to
transfers of structured settlement payment rights based on findings of a court
or responsible administrative authority regarding the payees' needs, as
contained in the United States Internal Revenue Code, United States Code Title
26, as amended from time to time, or in a United States Treasury regulation
adopted pursuant thereto;
(g) "Independent professional advice" shall mean the advice of an attorney,
certified public accountant, actuary or other licensed professional adviser:
(i) who is engaged by a payee to render advice concerning the legal, tax and
financial implications of a transfer of structured settlement payment rights;
(ii) who is not in any manner affiliated with or compensated by the transferee
of such transfer; and
(iii) whose compensation for rendering such advice is not affected by whether a
transfer occurs or does not occur.
(h) "Interested parties" shall mean, 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 such structured settlement;
(i) "Payee" shall mean an individual who is receiving tax-free damage payments
under a structured settlement and proposes to make a transfer of payment rights
thereunder;
(j) "Qualified assignment agreement" shall mean 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" shall mean, 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" shall mean the original tort claim or workers' compensation
claim resolved by a structured settlement;
(m) " Structured settlement " shall mean 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;
(n) " Structured settlement agreement" shall mean the agreement, judgment,
stipulation, or release embodying the terms of a structured settlement,
including the rights of the payee to receive periodic payments;
(o) " Structured settlement obligor" shall mean, 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;
(p) " Structured settlement payment rights" shall mean rights to receive
periodic payments (including lump sum payments) under a structured settlement,
whether from the settlement obligor or the annuity issuer, where:
(i) the payee, the settlement obligor, the annuity issuer, or any other
interested party is domiciled in this State;
(ii) the structured settlement agreement was approved by a court or responsible
administrative authority in this State; or
(iii) the settled claim was pending before the courts of this State when the
parties entered into the structured settlement agreement;
(q) " Transfer " shall mean any sale, assignment, pledge, hypothecation, or
other form of alienation or encumbrance made by a payee for consideration; and
(r) "Terms of the structured settlement " shall 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;
(s) " Transfer agreement" shall mean the agreement providing for transfer of
structured settlement payment rights from a payee to a transferee.

Section 6603. Jurisdiction; procedure for approval of transfers.
(a) The Superior Court shall have non-exclusive jurisdiction over any
application for authorization, under Section 6601 of this Chapter, 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 6601 of this Chapter, the transferee shall file with the
court and serve on any other government authority which previously approved
the structured settlement, on all interested parties, and on the Office of the
Attorney General, the Director of the Consumer Affairs Unit, the Insurance
Commissioner and any known State official who is vested with discretionary
authority to be heard in proceedings under this Chapter, a notice of the
proposed transfer and the application for its authorization, including in 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 6601(b) of this
Chapter;
(iv) 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
(v) 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) Those parties, persons and officials named in Section 6603(b) 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 Chapter.

Section 6604. No waiver; no penalties.
(a) The provisions of this Chapter shall not be waived.
(b) No payee who proposes to make a transfer of structured settlement payment
rights shall inure 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 6601 of this
Chapter.

Section 2. CONSTRUCTION.
Nothing contained in this Chapter 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 3. EFFECTIVE DATE.
This Chapter 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 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 effective.
Sponsor:
Van Sant

Florida

State Statute for FL

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

Statute and Bill #: Fla. Stat. § 626.99296 (FL S.B. 108)

Enacted 6/13/2001

Effective 10/1/2001

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:

Fla. Stat. § 626.99296 (2005)

§ 626.99296.  Transfers of structured settlement payment rights

   (1)  PURPOSE. --The purpose of this section is to protect recipients of structured settlements who are involved in the process of transferring structured settlement payment rights.

(2)  DEFINITIONS. --As used in this section, the term:

   (a) "Annuity issuer" means an insurer that has issued an annuity contract to be 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:

      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:

         a. That is the domicile of the payee or any other interested party;

         b. Under whose laws a structured settlement agreement was approved by a court; or

         c. In whose courts a settled claim was pending when the parties entered into a structured settlement agreement.

   (c) "Applicable federal rate" means 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 s. 7520 of the United States Internal Revenue Code, as amended.

   (d) "Assignee" means any party that acquires structured settlement payment rights directly or indirectly from a transferee of such rights.

   (e) "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.

   (f) "Discount and finance charge" means the sum of all charges that are payable directly or indirectly from assigned structured settlement payments and imposed directly or indirectly by the transferee and that are incident to a transfer of structured settlement payment rights, including:

      1. Interest charges, discounts, or 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, regardless of the identity of the party to whom such charges are paid or payable.

The term does not include any fee or other obligation incurred by a payee in obtaining independent professional advice concerning a transfer of structured settlement payment rights.

   (g) "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 as the discount rate.

   (h) "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 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.

   (i) "Interested parties" means:

      1. The payee;

      2. 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;

      3. The annuity issuer;

      4. The structured settlement obligor; or

      5. Any other party who has continuing rights or obligations under the structured settlement.

   (j) "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.

   (k) "Qualified assignment agreement" means an agreement providing for a qualified assignment, as authorized by 26 U.S.C. s. 130 of the United States Internal Revenue Code, as amended.

   (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 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, including the rights of the payee to receive periodic payments.

   (o) "Structured settlement obligor" means the party who is obligated to make continuing 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, including lump-sum payments under a structured settlement, whether from the structured settlement obligor or the annuity issuer, if:

      1. The payee or any other interested party is domiciled in this state;

      2. The structured settlement agreement was approved by a court of this state; or

      3. The settled claim was pending before the courts of this state when the parties entered into the structured settlement agreement.

   (q) "Terms of the structured settlement" means the terms of the structured settlement agreement; the annuity contract; a qualified assignment agreement; or an order or approval of a court or other government authority authorizing or approving the structured settlement.

   (r) "Transfer" means a sale, assignment, pledge, hypothecation, or other form of alienation or encumbrance made by a payee for consideration.

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

   (t) "Transferee" means a person who is receiving or who will receive structured settlement payment rights resulting from a transfer.

(3)  CONDITIONS TO TRANSFERS OF STRUCTURED SETTLEMENT PAYMENT RIGHTS AND STRUCTURED SETTLEMENT AGREEMENTS.

   (a) 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 is authorized in advance in a final order by a court of competent jurisdiction which is based on the written express findings by the court that:

      1. The transfer complies with this section and does not contravene other applicable law;

      2. At least 10 days before the date on which the payee first incurred an obligation with respect to the transfer, the transferee provided to the payee a disclosure statement in bold type, no smaller than 14 points in size, which specifies:

         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 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 fees, processing fees, closing costs, filing fees, referral fees, administrative fees, legal fees, and 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 deducting all commissions, fees, costs, expenses, and charges described in sub-subparagraph e.;

         g. The quotient, expressed as a percentage, obtained by dividing the net payment amount by the discounted present value of the payments, which must be disclosed in the following statement: "The net amount that you will receive from us in exchange for your future structured settlement payments represent      percent of the estimated current value of the payments based upon the discounted value using the applicable federal rate";

         h. 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"; and

         i. 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, taking into account the welfare and support of the payee's dependents;

      4. 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;

      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;

      6. The transfer agreement provides that if the payee is domiciled in this state, any disputes between the parties will be governed in accordance with the laws of this state and that the domicile state of the payee is the proper venue to bring any cause of action arising out of a breach of the agreement; and

      7. The court has determined that the net amount payable to the payee is fair, just, and reasonable under the circumstances then existing.

   (b) If a proposed 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 may grant, deny, or impose conditions upon the proposed transfer which the court deems just and proper given the facts and circumstances and 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, which arises from compliance by the issuer or obligor with the order of the court.

   (c) Any provision in a transfer agreement which gives a transferee power to confess judgment against a payee is unenforceable to the extent that 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 payee.

   (d) 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 must 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 costs 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.

(4)  JURISDICTION; PROCEDURE FOR APPROVAL OF TRANSFERS. --At least 20 days before the scheduled hearing on an application for authorizing a transfer of structured settlement payment rights under this section, the transferee must file with the court and 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 to the court;

   (b) A copy of the transfer agreement;

   (c) A copy of the disclosure statement required under subsection (3);

   (d) 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

   (e) Notification of the time and place of the hearing and notification of the manner in which and the time by which any written response to the application must be filed in order to be considered by the court. A written response to an application must be filed within 15 days after service of the transferee's notice.

(5)  WAIVER PROHIBITED; NO PENALTIES INCURRED.

   (a) The provisions of this section may not be waived.

   (b) If a transfer of structured settlement payment rights fails to satisfy the conditions of subsection (3), the payee who proposed the transfer does not incur any penalty, forfeit any application fee or other payment, or otherwise incur any liability to the proposed transferee.

(6)  NONCOMPLIANCE.

   (a) If a transferee violates the requirements for stipulating the discount and finance charge provided for in subsection (3), neither the transferee nor any assignee may collect from the transferred payments, or from the payee, any amount in excess of the net advance amount, and the payee may 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, but not in excess of three times the aggregate amount of the discount and finance charge; and

      3. Reasonable costs and attorney's fees.

   (b) If the transferee violates the disclosure requirements in subsection (3), the transferee and any assignee are liable to the payee for:

      1. A penalty in an amount determined by the court, but not in excess of three times the amount of the discount and finance charge; and

      2. Reasonable costs and attorney's fees.

   (c) A transferee or assignee is not liable for any 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) Notwithstanding any other law, an action may not be brought under this section more than 1 year after the due date of:

      1. The last transferred structured settlement payment, in the case of a violation of the requirements for stipulating the discount and finance charge provided for in subsection (3).

      2. The first transferred structured settlement payment, in the case of a violation of the disclosure requirements of subsection (3).

   (e) When any interested party has reason to believe that any transferee has violated this section, any interested party may bring a civil action for injunctive relief, penalties, and any other relief that is appropriate to secure compliance with this section.

Georgia

State Statute for GA

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

Statute and Bill #: O.C.G.A. § 51-12-71 (GA H.B. 792)

Enacted 6/4/2003

Effective 7/1/2003

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 7 of the Official Code of Georgia Annotated, relating to banking and finance, is amended by striking Code Section 7-4-12, relating to interest on judgments, and inserting in lieu thereof the following:

"7-4-12.

(A) All judgments in this state shall bear ANNUAL interest upon the principal amount recovered at the rate A RATE of 12 percent per year EQUAL TO THE PRIME RATE AS PUBLISHED BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, AS PUBLISHED IN STATISTICAL RELEASE H. 15 OR ANY PUBLICATION THAT MAY SUPERSEDE IT, ON THE DAY THE JUDGMENT IS ENTERED PLUS 3 PERCENT.

(B) IF unless the judgment is rendered on a written contract or obligation providing for interest at a specified rate, in which case the judgment shall bear interest at the rate specified in such THE contract or obligation.

(C) The postjudgment interest provided for in this Code section shall apply automatically to all judgments in this state and such THE interest shall be collectable as a part of each such judgment whether or not such THE

judgment specifically reflects the entitlement to such POSTJUDGMENT interest.

(D) THIS CODE SECTION SHALL APPLY TO ALL CIVIL ACTIONS FILED ON OR AFTER THE

EFFECTIVE DATE OF THIS CODE SECTION. "

SECTION 2.

Title 9 of the Official Code of Georgia Annotated, relating to civil practice, is amended by striking subsection (b) of Code Section 9-9-13, relating to vacation of award by court, application, grounds, rehearing, and appeal of

order, and inserting in lieu thereof the following:

"(b) The award shall be vacated on the application of a party who either participated in the arbitration or was served with a demand for arbitration if the court finds that the rights of that party were prejudiced by:

(1) Corruption, fraud, or misconduct in procuring the award;

(2) Partiality of an arbitrator appointed as a neutral;

(3) An overstepping by the arbitrators of their authority or such imperfect execution of it that a final and definite award upon the subject matter submitted was not made; or

(4) A failure to follow the procedure of this part, unless the party applying to vacate the award continued with the arbitration with notice of this failure and without objection ; OR

(5) THE ARBITRATOR 'S MANIFEST DISREGARD OF THE LAW . "

SECTION 3.

Said title is further amended by striking Code Section 9-11-23, relating to class actions, and inserting in lieu thereof the following:

" 9-11-23.

(a) If persons constituting a class are so numerous as to make it impracticable to bring them all before the court, such of them, one or more, as will fairly ensure the adequate representation of all may, on behalf of all,

bring or defend an action when the character of the right sought to be enforced for or against the class is:

(1) Joint, or common, or secondary in the sense that the owner of a primary right refuses to enforce that right and a member of the class thereby becomes entitled to enforce it; or

(2) Several, and the object of the action is the adjudication of claims which do or may affect specific property involved in the action.

(b) In an action brought to enforce a secondary right on the part of one or more shareholders in an association, incorporated or unincorporated, because the association refuses to enforce rights which may properly be asserted by it, the complaint shall be verified by oath and shall aver that the plaintiff was a shareholder at the time of the transaction of which he or she complains or that his or her share thereafter devolved on him or her by operation of law. The complaint shall also set forth with particularity the efforts of the plaintiff to secure from the managing directors or trustees such actions as the plaintiff desires and the reasons for his or her failure to obtain such action or the reasons why irreparable injury to the association, incorporated or unincorporated, would result by waiting for 90 days from the date of the demand upon the managing directors or trustees. This Code section is cumulative of

Code Section 14-2-831.

(c) A class action shall not be dismissed or compromised without the approval of the court. If the right sought to be enforced is one defined in paragraph (1) of subsection (a) of this Code section, notice of the proposed dismissal or

compromise shall be given to all members of the class in such manner as the court directs. If the right is one defined in paragraph (2) of subsection (a) of this Code section, notice shall be given only if the court requires it.

9-11-23.

(A) ONE OR MORE MEMBERS OF A CLASS MAY SUE OR BE SUED AS REPRESENTATIVE

PARTIES ON BEHALF OF ALL ONLY IF:

(1) THE CLASS IS SO NUMEROUS THAT JOINDER OF ALL MEMBERS IS IMPRACTICABLE;

(2) THERE ARE QUESTIONS OF LAW OR FACT COMMON TO THE CLASS;

(3) THE CLAIMS OR DEFENSES OF THE REPRESENTATIVE PARTIES ARE TYPICAL OF THE

CLAIMS OR DEFENSES OF THE CLASS; AND

(4) THE REPRESENTATIVE PARTIES WILL FAIRLY AND ADEQUATELY PROTECT THE

INTERESTS OF THE CLASS.

(B) AN ACTION MAY BE MAINTAINED AS A CLASS ACTION IF THE PREREQUISITES OF

SUBSECTION (A) OF THIS CODE SECTION ARE SATISFIED, AND, IN ADDITION:

(1) THE PROSECUTION OF SEPARATE ACTIONS BY OR AGAINST INDIVIDUAL MEMBERS OF

THE CLASS WOULD CREATE A RISK OF:

(A) INCONSISTENT OR VARYING ADJUDICATIONS WITH RESPECT TO INDIVIDUAL MEMBERS

OF THE CLASS WHICH WOULD ESTABLISH INCOMPATIBLE STANDARDS OF CONDUCT FOR THE

PARTY OPPOSING THE CLASS; OR

(B) ADJUDICATIONS WITH RESPECT TO INDIVIDUAL MEMBERS OF THE CLASS WHICH WOULD

AS A PRACTICAL MATTER BE DISPOSITIVE OF THE INTERESTS OF THE OTHER MEMBERS NOT

PARTIES TO THE ADJUDICATIONS OR SUBSTANTIALLY IMPAIR OR IMPEDE THEIR ABILITY TO

PROTECT THEIR INTERESTS;

(2) THE PARTY OPPOSING THE CLASS HAS ACTED OR REFUSED TO ACT ON GROUNDS

GENERALLY APPLICABLE TO THE CLASS, THEREBY MAKING APPROPRIATE FINAL INJUNCTIVE

RELIEF OR CORRESPONDING DECLARATORY RELIEF WITH RESPECT TO THE CLASS AS A

WHOLE; OR

(3) THE COURT FINDS THAT THE QUESTIONS OF LAW OR FACT COMMON TO THE MEMBERS OF

THE CLASS PREDOMINATE OVER ANY QUESTIONS AFFECTING ONLY INDIVIDUAL MEMBERS, AND

THAT A CLASS ACTION IS SUPERIOR TO OTHER AVAILABLE METHODS FOR THE FAIR AND

EFFICIENT ADJUDICATION OF THE CONTROVERSY. THE MATTERS PERTINENT TO THE

FINDINGS INCLUDE:

(A) THE INTEREST OF MEMBERS OF THE CLASS IN INDIVIDUALLY CONTROLLING THE

PROSECUTION OR DEFENSE OF SEPARATE ACTIONS;

(B) THE EXTENT AND NATURE OF ANY LITIGATION CONCERNING THE CONTROVERSY ALREADY

COMMENCED BY OR AGAINST MEMBERS OF THE CLASS;

(C) THE DESIRABILITY OR UNDESIRABILITY OF CONCENTRATING THE LITIGATION OF THE

CLAIMS IN THE PARTICULAR FORUM; AND

(D) THE DIFFICULTIES LIKELY TO BE ENCOUNTERED IN THE MANAGEMENT OF A CLASS

ACTION.

(C)(1) AS SOON AS PRACTICABLE AFTER THE COMMENCEMENT OF AN ACTION BROUGHT AS A

CLASS ACTION, THE COURT SHALL DETERMINE BY ORDER WHETHER IT IS TO BE SO

MAINTAINED. AN ORDER UNDER THIS SUBSECTION MAY BE CONDITIONAL, AND MAY BE

ALTERED OR AMENDED BEFORE THE DECISION ON THE MERITS.

(2) IN ANY CLASS ACTION MAINTAINED UNDER PARAGRAPH (3) OF SUBSECTION (B) OF

THIS CODE SECTION, THE COURT SHALL DIRECT TO THE MEMBERS OF THE CLASS THE BEST

NOTICE PRACTICABLE UNDER THE CIRCUMSTANCES, INCLUDING INDIVIDUAL NOTICE TO ALL

MEMBERS WHO CAN BE IDENTIFIED THROUGH REASONABLE EFFORT. THE NOTICE SHALL

ADVISE EACH MEMBER THAT:

(A) THE COURT WILL EXCLUDE THE MEMBER FROM THE CLASS IF THE MEMBER SO REQUESTS

BY A SPECIFIED DATE;

(B) THE JUDGMENT, WHETHER FAVORABLE OR NOT, WILL INCLUDE ALL MEMBERS WHO DO

NOT REQUEST EXCLUSION; AND

(C) ANY MEMBER WHO DOES NOT REQUEST EXCLUSION MAY, IF THE MEMBER DESIRES,

ENTER AN APPEARANCE THROUGH COUNSEL.

(3) THE JUDGMENT IN AN ACTION MAINTAINED AS A CLASS ACTION UNDER PARAGRAPH (1)

OR (2) OF SUBSECTION (B) OF THIS CODE SECTION, WHETHER OR NOT FAVORABLE TO THE

CLASS, SHALL INCLUDE AND DESCRIBE THOSE WHOM THE COURT FINDS TO BE MEMBERS OF

THE CLASS. THE JUDGMENT IN AN ACTION MAINTAINED AS A CLASS ACTION UNDER

PARAGRAPH (3) OF SUBSECTION (B) OF THIS CODE SECTION, WHETHER OR NOT FAVORABLE

TO THE CLASS, SHALL INCLUDE AND SPECIFY OR DESCRIBE THOSE TO WHOM THE NOTICE

PROVIDED IN PARAGRAPH (2) OF SUBSECTION (B) OF THIS CODE SECTION WAS DIRECTED,

AND WHO HAVE NOT REQUESTED EXCLUSION, AND WHOM THE COURT FINDS TO BE MEMBERS OF THE CLASS.

(4) WHEN APPROPRIATE:

(A) AN ACTION MAY BE BROUGHT OR MAINTAINED AS A CLASS ACTION WITH RESPECT TO

PARTICULAR ISSUES; OR

(B) A CLASS MAY BE DIVIDED INTO SUBCLASSES AND EACH SUBCLASS TREATED AS A

CLASS, AND THE PROVISIONS OF THIS RULE SHALL THEN BE CONSTRUED AND APPLIED

ACCORDINGLY.

(D) IN THE CONDUCT OF ACTIONS TO WHICH THIS RULE APPLIES, THE COURT MAY MAKE

APPROPRIATE ORDERS:

(1) DETERMINING THE COURSE OF PROCEEDINGS OR PRESCRIBING MEASURES TO PREVENT

UNDUE REPETITION OR COMPLICATION IN THE PRESENTATION OF EVIDENCE OR ARGUMENT;

(2) REQUIRING, FOR THE PROTECTION OF THE MEMBERS OF THE CLASS OR OTHERWISE FOR

THE FAIR CONDUCT OF THE ACTION, THAT NOTICE BE GIVEN IN SUCH MANNER AS THE

COURT MAY DIRECT TO SOME OR ALL OF THE MEMBERS OF ANY STEP IN THE ACTION, OR OF

THE PROPOSED EXTENT OF THE JUDGMENT, OR OF THE OPPORTUNITY OF MEMBERS TO

SIGNIFY WHETHER THEY CONSIDER THE REPRESENTATION FAIR AND ADEQUATE, TO

INTERVENE AND PRESENT CLAIMS OR DEFENSES, OR OTHERWISE TO COME INTO THE ACTION;

(3) IMPOSING CONDITIONS ON THE REPRESENTATIVE PARTIES OR ON INTERVENORS; AND

(4) REQUIRING THAT THE PLEADINGS BE AMENDED TO ELIMINATE THEREFROM ALLEGATIONS

AS TO REPRESENTATION OF ABSENT PERSONS, AND THAT THE ACTION PROCEED ACCORDINGLY.

THE ORDERS MAY BE COMBINED WITH OTHER ORDERS, AND MAY BE ALTERED OR AMENDED BY THE COURT AS MAY BE DESIRABLE FROM TIME TO TIME.

(E) A CLASS ACTION SHALL NOT BE DISMISSED OR COMPROMISED WITHOUT THE APPROVAL

OF THE COURT, AND NOTICE OF THE PROPOSED DISMISSAL OR COMPROMISE SHALL BE GIVEN

TO ALL MEMBERS OF THE CLASS IN SUCH MANNER AS THE COURT DIRECTS.

(F) THE APPROPRIATE APPELLATE COURT MAY IN ITS DISCRETION PERMIT AN APPEAL

FROM AN ORDER OF A TRIAL COURT GRANTING OR DENYING CLASS ACTION CERTIFICATION

UNDER THIS CODE SECTION IF APPLICATION IS MADE TO IT WITHIN TEN DAYS AFTER

ENTRY OF THE ORDER. AN APPEAL DOES NOT STAY PROCEEDINGS IN THE TRIAL COURT

UNLESS THE TRIAL JUDGE OR THE APPELLATE COURT SO ORDERS. "

SECTION 4.

Said title is further amended by striking subsection (a) of Code Section 9-11-41, relating to dismissal of actions, and inserting in lieu thereof the following:

"(a)

(1) BY PLAINTIFF; BY STIPULATION. Subject to the provisions of subsection (c) (E) of Code Section 9-11-23, of Code Section 9-11-66, and of any statute, an action may be dismissed by the plaintiff, without order or

permission of court , by:

(A) BY filing a written notice of dismissal at any time before the plaintiff rests his case. After the plaintiff rests his case, permission and an order of the court must be obtained before dismissal FIRST WITNESS IS SWORN; OR

(B) BY FILING A STIPULATION OF DISMISSAL SIGNED BY ALL PARTIES WHO HAVE APPEARED IN THE ACTION.

(2) BY ORDER OF COURT. EXCEPT AS PROVIDED IN PARAGRAPH (1) OF THIS SUBSECTION,

AN ACTION SHALL NOT BE DISMISSED UPON THE PLAINTIFF 'S MOTION EXCEPT UPON ORDER

OF THE COURT AND UPON THE TERMS AND CONDITIONS AS THE COURT DEEMS PROPER. If a

counterclaim has been pleaded by a defendant prior to the service upon him OR HER of the plaintiff's motion to dismiss, the action shall not be dismissed against the defendant's objection unless the counterclaim can remain pending for independent adjudication by the court.

(3) EFFECT. A dismissal under this subsection is without prejudice, except that the filing of a third SECOND notice of dismissal operates as an adjudication upon the merits. "

SECTION 5.

Title 50 of the Official Code of Georgia Annotated, relating to state government, is amended by striking Code Section 50-2-21 relating to jurisdiction extending to persons within state limits, and inserting in its place a new Code Section 50-2-21 to read as follows:

"50-2-21.

(A) The jurisdiction of this state and its laws extend to all persons while within its limits, whether as citizens, denizens, or temporary sojourners.

(B) A COURT OF THIS STATE MAY DECLINE TO EXERCISE JURISDICTION OF ANY CIVIL

CAUSE OF ACTION OF A NONRESIDENT ACCRUING OUTSIDE THIS STATE IF THERE IS

ANOTHER FORUM WITH JURISDICTION OF THE PARTIES IN WHICH THE TRIAL CAN BE MORE

APPROPRIATELY HELD. IN DETERMINING THE APPROPRIATENESS OF THIS STATE OR OF

ANOTHER FORUM, THE COURT SHALL TAKE INTO ACCOUNT THE FOLLOWING FACTORS:

(1) THE PLACE OF ACCRUAL OF THE CAUSE OF ACTION;

(2) THE LOCATION OF WITNESSES;

(3) THE RESIDENCE OR RESIDENCES OF THE PARTIES;

(4) WHETHER A LITIGANT IS ATTEMPTING TO CIRCUMVENT THE APPLICABLE STATUTE OF

LIMITATIONS OF ANOTHER STATE; AND

(5) THE PUBLIC FACTOR OF THE CONVENIENCE TO AND BURDEN UPON THE COURT.

(C) UPON A MOTION FILED NOT LATER THAN 90 DAYS AFTER THE LAST DAY ALLOWED FOR

THE FILING OF THE MOVING PARTY 'S ANSWER AND UPON THE PARTY 'S SHOWING THAT THE

EXISTING FORUM CONSTITUTES AN INCONVENIENT FORUM BASED ON THE FACTORS LISTED IN

SUBSECTION (B) OF THIS CODE SECTION AND WHERE THERE IS ANOTHER FORUM WHICH CAN

ASSUME JURISDICTION, THE COURT MAY DISMISS THE ACTION WITHOUT PREJUDICE TO ITS

BEING FILED IN ANY APPROPRIATE JURISDICTION ON ANY CONDITION OR CONDITIONS THAT

MAY BE JUST. "

SECTION 6.

Title 51 of the Official Code of Georgia Annotated, relating to torts, is amended by striking Code Section 51-12-14, relating to unliquidated damages, and inserting in lieu thereof the following:

"51-12-14.

(a) Where a claimant has given written notice by registered or certified mail or statutory overnight delivery to a person against whom claim is made of a demand for an amount of unliquidated damages in a tort action and the person against whom such claim is made fails to pay such amount within 30 days from the mailing OR DELIVERING of the notice, the claimant shall be entitled to receive interest on the amount demanded if, upon trial of the case in which the claim is made, the judgment is for an amount not less than the amount demanded.

However, if, at any time after the 30 days and before the claimant has withdrawn his OR HER demand, the person against whom such claim is made gives written notice by registered or certified mail or statutory overnight delivery

of an offer to pay the amount of the claimant's demand plus interest under this Code section through the date such notice is given, and such offer is not accepted by the person making the demand for unliquidated damages within 30

days from the mailing OR DELIVERING of such notice by the person against whom such claim is made, the claimant shall not be entitled to receive interest on the amount of the demand after the thirtieth day following the date on which the notice of the offer is mailed OR DELIVERED even if, upon trial of the case in which the claim is made, the judgment is for an amount not less than the sum demanded pursuant to this Code section.

(b) Any written notice referred to in subsection (a) of this Code section may be given on only one occasion and shall specify that it is being given pursuant to this Code section.

(c) The interest provided for by this Code section shall be at the rate of 12 percent per annum AN ANNUAL RATE EQUAL TO THE PRIME RATE AS PUBLISHED BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, AS PUBLISHED IN STATISTICAL RELEASE H. 15 OR ANY PUBLICATION THAT MAY SUPERSEDE IT, ON THE THIRTIETH DAY FOLLOWING THE DATE OF THE MAILING OF THE LAST WRITTEN NOTICE PLUS 3 PERCENT, and shall begin to run from the thirtieth day following the date of the mailing OR DELIVERING of the written notice until the date of judgment. THIS SUBSECTION SHALL APPLY TO ALL CIVIL ACTIONS FILED ON OR AFTER THE EFFECTIVE DATE OF THIS SUBSECTION.

(d) Evidence or discussion of interest on liquidated damages, as well as evidence of the offer, shall not be submitted to the jury. Interest shall be made a part of the judgment upon presentation of evidence to the satisfaction

of the court that this Code section has been complied with and that the verdict of the jury or the award by the judge trying the case without a jury is equal to or exceeds the amount claimed in the notice.

(e) This Code section shall be known and may be cited as the 'Unliquidated Damages Interest Act. '"

SECTION 7.

Said title is further amended by striking Code Section 51-12-71, relating to prerequisites for transfer of structured settlement payment rights, and inserting in lieu thereof the following:

"51-12-71.

(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 BY A COURT OF COMPETENT JURISDICTION OR ORDER OF ANY GOVERNMENT AUTHORITY VESTED BY LAW WITH EXCLUSIVE JURISDICTION OVER THE

SETTLED CLAIM RESOLVED BY THE STRUCTURED SETTLEMENT BASED ON EXPRESS FINDINGS

BY THE COURT OR GOVERNMENT AUTHORITY THAT:

(1) The transfer complies with the requirements of this article and will DOES not contravene other applicable law ANY FEDERAL OR STATE STATUTE OR THE ORDER OF ANY COURT OR ANY RESPONSIBLE ADMINISTRATIVE AUTHORITY;

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

WELFARE AND SUPPORT OF THE PAYEE 'S DEPENDENTS;

(3) Not less than ten days prior to the date on which the transfer agreement is executed in writing, the transferee has provided to the payee an informational pamphlet relating to transfers of structured settlements as

provided for in subsection (b) of Code Section 51-12-73, when available, and 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 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, 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 subparagraph (E) of this paragraph;

(G) The quotient (expressed as a percentage) obtained by dividing the net payment amount by the discounted present value of the payments; and

(H) 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; AND

(3) Written notice at least two business days prior to the effective execution of the transfer agreement has been provided by the transferee to the annuity issuer and the structured settlement obligor by certified mail or statutory

overnight delivery, postage prepaid; and

(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 HAS FILED A COPY OF THE NOTICE WITH THE COURT.

(B) AT LEAST 20 DAYS BEFORE THE HEARING WHICH IS SCHEDULED ON AN APPLICATION

FOR AUTHORIZING A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS UNDER THIS

CODE SECTION, THE TRANSFEREE SHALL FILE WITH THE COURT AND DELIVER TO ALL

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

ITS AUTHORIZATION. THE NOTICE SHALL INCLUDE THE FOLLOWING:

(1) A COPY OF THE TRANSFEREE 'S APPLICATION TO THE COURT;

(2) A COPY OF THE TRANSFER AGREEMENT;

(3) A COPY OF THE DISCLOSURE STATEMENT REQUIRED UNDER PARAGRAPH (3) OF

SUBSECTION (A) OF THIS CODE SECTION;

(4) NOTIFICATION THAT AN INTERESTED PARTY MAY SUPPORT, OPPOSE, OR OTHERWISE

RESPOND TO THE TRANSFEREE 'S APPLICATION, EITHER IN PERSON OR THROUGH COUNSEL,

BY PARTICIPATING IN THE HEARING OR BY SUBMITTING WRITTEN COMMENTS TO THE

COURT; AND

(5) A RULE NISI CONTAINING NOTIFICATION OF THE TIME AND PLACE OF THE HEARING

AND NOTIFICATION OF THE MANNER IN AND THE TIME BY WHICH ANY WRITTEN RESPONSE TO

THE APPLICATION MUST BE FILED IN ORDER TO BE CONSIDERED BY THE COURT. A WRITTEN

RESPONSE SHALL BE FILED WITHIN 15 DAYS AFTER SERVICE OF THE TRANSFEREE 'S

NOTICE.

(C) DELIVERY OF NOTICE AS REQUIRED BY SUBSECTION (B) OF THIS CODE SECTION MAY

BE MADE AS PROVIDED IN CODE SECTION 9-11-4 OR BY REGISTERED OR CERTIFIED MAIL,

RETURN RECEIPT REQUESTED. NOTICE BY REGISTERED OR CERTIFIED MAIL IS EFFECTIVE

UPON THE DATE OF DELIVERY AS SHOWN ON THE RETURN RECEIPT. IF NOTICE BY

REGISTERED OR CERTIFIED MAIL IS REFUSED OR RETURNED UNDELIVERED, NOTICE SHALL

BE DELIVERED AS PROVIDED IN CODE SECTION 9-11-4.

(D) THE VENUE FOR ANY APPLICATION BROUGHT UNDER THIS CODE SECTION SHALL BE IN

THE COUNTY IN WHICH ANY TRANSFEREE OR TRANSFEROR RESIDES OR IN ANY COUNTY IN

WHICH ANY OF THE TRANSFEREES OR TRANSFERORS HAVE CONSENTED TO VENUE. "

SECTION 8.

Said title is further amended by striking Code Section 51-12-72, relating to required transfer agreements, and inserting in lieu thereof the following:

"51-12-72.

(a) Any transfer agreement of structured settlement payment rights must, in addition to the other requirements of this article, be executed in writing AND FILED AS PROVIDED IN CODE SECTION 51-12-71. The transfer agreement shall not be so executed until after the expiration of the ten-day period provided for in paragraph (2) (3) of Code Section 51-12-71.

(b) No payee shall incur any obligation of any type with respect to a proposed transfer of structured settlement payment rights prior to the execution in writing of the transfer agreement.

(c) Any payee who executes in writing a transfer agreement shall have the right to rescind the transfer at any time within the next 21 days following the written execution of the transfer agreement OR AT THE HEARING PROVIDED FOR IN SUBSECTION (B) OF CODE SECTION 51-12-71, WHICHEVER EVENT OCCURS LAST. The transferee shall furnish to the payee at the time of execution of the transfer agreement a notice to the payee allowing the payee 21 days to cancel the transfer. This right to cancel shall not limit or otherwise affect the payee's

right to cancel pursuant to any other provision of applicable law. The notice shall serve as the cover sheet to the transfer documents. It shall be on a separate sheet of paper with no other written or pictorial material, in at

least ten-point bold type, double spaced, and shall read substantially as follows: 'NOTICE OF CANCELLATION RIGHTS:

Please read this form completely and carefully. It contains valuable cancellation rights.

You may cancel this transaction at any time prior to 5:00 P. M. of the twenty-first day following receipt of this notice OR AT THE HEARING ON THE APPLICATION FOR AUTHORIZATION OF A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS, WHICHEVER EVENT OCCURS LAST.

This cancellation right cannot be waived in any manner. To cancel, sign this form, and mail or deliver it to the address below by 5:00 P. M. of (the twenty-first day following the transaction). It is best to mail it by certified mail or statutory overnight delivery, return receipt requested, and to keep a photocopy of the signed form and your post office receipt.

Address to which cancellation is to be returned:

I (we) hereby cancel this transaction.

Payee's Signature Date: . '" SECTION 9.

This Act shall become effective on July 1, 2003, and shall apply to all civil

actions filed on or after July 1, 2003. SECTION 10.

All laws and parts of laws in conflict with this Act are repealed.


Hawaii

State Statute for HI

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 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, to be considered by the court or responsible administrative authority; provided that the written responses shall be filed not less than fifteen days after service of the transferee's notice.

§ -6 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 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 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 Act is valid or invalid.

(f) Compliance with the requirements set forth in section -2 and fulfillment of the conditions set forth in section -3 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 the requirements or failure to fulfill the conditions."

SECTION 2. This Act shall take effect upon its approval.

Idaho

State Statute for ID

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

Illinois

State Statute for IL

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.


Indiana

State Statute for IN

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.

 

Iowa

State Statute for IA

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.

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