In the state of Maryland the law provides that the customer lives in the state, and must be approved by local court in state. Approval granted only if the transaction is in the customers best interest. In addition, a customer must seek independent financial advice to protect their interests.
A BILL ENTITLED
AN ACT concerning Courts - Transfer of Structured Settlement Payment Rights
FOR the purpose of providing for certain conditions under which a direct or indirect transfer of certain structured settlement payment rights is effective; requiring a certain obligor or annuity issuer to make payments to a transferee of structured settlement payment rights if the transfer is authorized in an order of a court based on certain findings; providing for the jurisdiction in cases involving transfers of structured settlement payment rights; requiring a certain transferee to provide certain information to a court and certain parties; providing certain immunity to a structured settlement obligor or annuity issuer when a payee makes a transfer of structured settlement payment rights in violation of this subtitle; defining certain terms; providing for the application and construction of this Act; and generally relating to the transfer of structured settlement payment rights.
BY adding to Article - Courts and Judicial Proceedings Section 5-1101 through 5-1105, inclusive, to be under the new subtitle "Subtitle 11. Structured Settlements" Annotated Code of Maryland (1998 Replacement Volume and 1999 Supplement)
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, That the Laws of Maryland read as follows:
Article - Courts and Judicial Proceedings
SUBTITLE 11. STRUCTURED SETTLEMENTS.
(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS INDICATED.
(B) "DISCOUNTED PRESENT VALUE" MEANS THE FAIR PRESENT VALUE OF FUTURE PAYMENTS, AS DETERMINED BY DISCOUNTING PAYMENTS TO THE PRESENT USING THE MOST RECENTLY PUBLISHED APPLICABLE FEDERAL RATE FOR DETERMINING THE PRESENT VALUE OF AN ANNUITY, AS ISSUED BY THE UNITED STATES INTERNAL REVENUE SERVICE.
(C) "INDEPENDENT PROFESSIONAL ADVICE" MEANS ADVICE OF AN ATTORNEY, CERTIFIED PUBLIC ACCOUNTANT, ACTUARY, OR OTHER LICENSED PROFESSIONAL ADVISER:
(1) WHO IS ENGAGED BY A PAYEE TO RENDER ADVICE CONCERNING THE LEGAL, TAX, AND FINANCIAL IMPLICATIONS OF A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS;
(2) WHO IS NOT AFFILIATED WITH OR COMPENSATED BY THE TRANSFEREE OF THE TRANSFER; AND
(3) WHOSE COMPENSATION IS NOT AFFECTED BY WHETHER A TRANSFER OCCURS.
(D) "INTERESTED PARTIES" MEANS THE PAYEE, EACH BENEFICIARY DESIGNATED UNDER THE ANNUITY CONTRACT TO RECEIVE PAYMENTS FOLLOWING THE PAYEE'S DEATH, THE ANNUITY ISSUER, THE STRUCTURED SETTLEMENT OBLIGOR, AND ANY OTHER PARTY THAT HAS CONTINUING RIGHTS OR OBLIGATIONS UNDER A STRUCTURED SETTLEMENT.
(E) "PAYEE" MEANS AN INDIVIDUAL WHO RECEIVES DAMAGE PAYMENTS THAT ARE NOT SUBJECT TO INCOME TAXATION UNDER A STRUCTURED SETTLEMENT AND PROPOSES TO MAKE A TRANSFER OF PAYMENT RIGHTS.
(F) "RESPONSIBLE ADMINISTRATIVE AUTHORITY" MEANS A GOVERNMENT AUTHORITY VESTED WITH EXCLUSIVE JURISDICTION OVER THE SETTLED CLAIM RESOLVED BY A STRUCTURED SETTLEMENT.
(G) (1) "STRUCTURED SETTLEMENT" MEANS AN ARRANGEMENT FOR PERIODIC PAYMENT OF DAMAGES FOR PERSONAL INJURY ESTABLISHED BY A SETTLEMENT OR JUDGMENT IN RESOLUTION OF A TORT CLAIM.
(2) "STRUCTURED SETTLEMENT" DOES NOT INCLUDE AN ARRANGEMENT FOR PERIODIC PAYMENT OF DAMAGES FOR PERSONAL INJURY ESTABLISHED BY A JUDGMENT BY CONFESSION.
(H) "STRUCTURED SETTLEMENT AGREEMENT" MEANS AN AGREEMENT, JUDGMENT, STIPULATION, OR RELEASE EMBODYING THE TERMS OF A STRUCTURED SETTLEMENT.
(I) "STRUCTURED SETTLEMENT OBLIGOR" MEANS A PARTY WHO HAS THE CONTINUING PERIODIC PAYMENT OBLIGATION TO THE PAYEE UNDER A STRUCTURED SETTLEMENT AGREEMENT OR A QUALIFIED ASSIGNMENT AGREEMENT.
(J) "STRUCTURED SETTLEMENT PAYMENT RIGHTS" MEANS THE RIGHTS TO RECEIVE PERIODIC PAYMENTS, INCLUDING LUMP-SUM PAYMENTS UNDER A STRUCTURED SETTLEMENT, WHETHER FROM THE SETTLEMENT OBLIGOR OR THE ANNUITY ISSUER, IF:
(1) AN INTERESTED PARTY IS DOMICILED IN THIS STATE;
(2) THE STRUCTURED SETTLEMENT AGREEMENT WAS APPROVED BY A COURT OR RESPONSIBLE ADMINISTRATIVE AUTHORITY IN THIS STATE; OR
(3) THE SETTLED CLAIM WAS PENDING BEFORE A COURT OF THIS STATE WHEN THE PARTIES ENTERED INTO THE STRUCTURED SETTLEMENT AGREEMENT.
(K) "TERMS OF THE STRUCTURED SETTLEMENT" INCLUDES THE TERMS OF THE STRUCTURED SETTLEMENT AGREEMENT, THE ANNUITY CONTRACT, A QUALIFIED ASSIGNMENT, AND AN ORDER OR APPROVAL OF A COURT OR RESPONSIBLE ADMINISTRATIVE AUTHORITY AUTHORIZING OR APPROVING A STRUCTURED SETTLEMENT.
(L) "TRANSFER" MEANS A SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION, OR OTHER FORM OF ALIENATION OR ENCUMBRANCE MADE BY A PAYEE FOR CONSIDERATION.
(M) "TRANSFER AGREEMENT" MEANS THE AGREEMENT PROVIDING FOR THE TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS FROM A PAYEE TO A TRANSFEREE.
(A) A DIRECT OR INDIRECT TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS TO A TRANSFEREE IS EFFECTIVE AS PROVIDED IN THIS SUBTITLE.
(B) A STRUCTURED SETTLEMENT OBLIGOR OR ANNUITY ISSUER SHALL MAKE ANY PAYMENT DIRECTLY OR INDIRECTLY TO A TRANSFEREE OF STRUCTURED SETTLEMENT PAYMENT RIGHTS IF:
(1) THE TRANSFER IS AUTHORIZED IN AN ORDER OF A COURT BASED ON A FINDING THAT THE TRANSFER IS NECESSARY, REASONABLE, OR APPROPRIATE;
(2) THE TRANSFER IS NOT EXPECTED TO SUBJECT THE PAYEE, THE PAYEE'S DEPENDENTS, OR BOTH, TO UNDUE OR UNREASONABLE FINANCIAL HARDSHIP IN THE FUTURE;
(3) THE PAYEE RECEIVED INDEPENDENT PROFESSIONAL ADVICE REGARDING THE LEGAL, TAX, AND FINANCIAL IMPLICATIONS OF THE TRANSFER; AND
(4) THE TRANSFEREE DISCLOSED TO THE PAYEE THE DISCOUNTED PRESENT VALUE.
(A) THE CIRCUIT COURT THAT HAS JURISDICTION OVER A PERSON OR THE COUNTY IN WHICH THE ORIGINAL CLAIM OCCURRED SHALL HAVE NONEXCLUSIVE JURISDICTION OVER AN APPLICATION FOR A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS UNDER § 5-1102 OF THIS SUBTITLE.
(B) A TRANSFEREE SHALL FILE WITH THE COURT AND SERVE ON THE INTERESTED PARTIES, A NOTICE OF THE PROPOSED TRANSFER AND AN APPLICATION FOR ITS AUTHORIZATION, INCLUDING:
(1) A COPY OF THE TRANSFEREE'S APPLICATION;
(2) A COPY OF THE TRANSFER AGREEMENT; AND
(I) OF THE TIME AND PLACE OF THE HEARING; AND
(II) THAT EACH INTERESTED PARTY IS ENTITLED TO SUPPORT, OPPOSE, OR OTHERWISE RESPOND TO THE TRANSFEREE'S APPLICATION, IN PERSON OR BY COUNSEL, BY SUBMITTING WRITTEN COMMENTS TO THE COURT OR BY PARTICIPATING IN THE HEARING.
IF A PAYEE MAKES A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS IN VIOLATION OF THIS SUBTITLE, THE STRUCTURED SETTLEMENT OBLIGOR OR ANNUITY ISSUER MAY NOT INCUR ANY ADDITIONAL LIABILITY.
NOTHING CONTAINED IN THIS SUBTITLE MAY BE CONSTRUED TO AUTHORIZE A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS IN CONTRAVENTION OF APPLICABLE LAW OR TO GIVE EFFECT TO A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS THAT IS INVALID UNDER APPLICABLE LAW.
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall apply to any transfer of structured settlement payment rights under a transfer agreement entered into on or after the effective date of this Act; provided, however, that nothing contained in this section shall imply that any transfer under a transfer agreement entered into prior to the effective date of this Act is ineffective.
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect October 1, 2000.