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 section 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, noncompliance with the requirements or failure to fulfill the requirements of this chapter.