State Statutes

Texas State Structured Settlement Protection Act

In the state of Texas 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. There also exists a 3 day waiting period to protect the customer.

The Texas Structured Settlement Protection Statute

CIVIL PRACTICE & REMEDIES CODE

CHAPTER 141. STRUCTURED SETTLEMENT PROTECTION ACT

Sec. 141.001. SHORT TITLE. This chapter may be cited as the Structured Settlement Protection Act. Added by Acts 2001, 77th Leg., ch. 96, Sec. 1, eff. Sept. 1, 2001.

Sec. 141.002. DEFINITIONS. In this chapter:

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

(2) 'Court' means:

(A) The court of original jurisdiction that authorized or approved a structured settlement; or (B) If the court that authorized or approved the structured settlement no longer has jurisdiction to approve a transfer of payment rights under the structured settlement under this chapter, a statutory county court, a statutory probate court, or a district court located in the county in which the payee resides.

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

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

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

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

(7) 'Interested party' means, with respect to any structured settlement:

(A) The payee;

(B) Any beneficiary irrevocably designated under the annuity contract to receive payments following the payee's death;

(C) The annuity issuer;

(D) The structured settlement obligor; and

(E) Any other party that has continuing rights or obligations under the structured settlement.

(8) '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 141.003(5).

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

(10) 'Periodic payments' includes both recurring payments and scheduled future lump-sum payments.

(11) 'Qualified assignment agreement' means an agreement providing for a qualified assignment within the meaning of Section 130, Internal Revenue Code of 1986 (26 U.S.C. Section 130), as amended.

(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, if:

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

(B) The structured settlement agreement was authorized or approved by a court located 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 the court.

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

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

(20) 'Transfer expenses' means all the expenses of a transfer that are required under the transfer agreement to be paid by the payee or deducted from the gross advance amount, including court filing fees, attorney's fees, escrow fees, lien recording fees, judgment and lien search fees, finders' fees, commissions, and other payments to a broker or other intermediary, except that the term 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.

§ 141.003. Required Disclosures To Payee.

At least three days before the date on which the payee signs a transfer agreement, the transferee shall provide to the payee a separate disclosure statement, in bold type at least 14 points in size, that states:

(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 those expenses;

(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.

§ 141.004. Approval of Transfers of Structured Settlement Payment Rights.

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

(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 an order of any court or other governmental authority.

§ 141.005. Effects Of Transfer Of Structured Settlement Payment Rights.

Following a transfer of structured settlement payment rights under this chapter:

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

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

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

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

(3) The transferee shall be liable to the payee:

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

(B) For any other liabilities or costs, including reasonable costs and attorney's fees, arising as a consequence of the transferee's failure to comply with this chapter;

(4) 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

(5) 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.

§ 141.006. Procedure For Approval Of Transfers.

(a) An application under this chapter for approval of a transfer of structured settlement payment rights shall be made by the transferee and shall be brought in the court.

(b) At least 20 days before the date of the scheduled hearing on any application for approval of a transfer of structured settlement payment rights under Section 141.004, the transferee shall file with the court and serve on all interested parties a notice of the proposed transfer and the application for authorization, including with the notice:

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

(2) A copy of the transfer agreement;

(3) A copy of the disclosure statement required under Section 141.003;

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

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

(6) Notice of the time and place of the hearing and notification of the manner in which and the time by which written responses to the application must be filed to be considered by the court.

(c) Written responses to the application under Subsection (b)(6) must be filed on or after the 15th day after the date the transferee's notice is served.

§ 141.007. General Provisions; Construction.

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

(b) Any transfer agreement entered into by a payee who resides in this state must provide that disputes under the transfer agreement, including any claim that the payee has breached the agreement, shall be determined in and under the laws of this state. The transfer agreement may not authorize the transferee or any other party to confess judgment or consent to entry of judgment against the payee.

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

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

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

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

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

(f) Compliance with the requirements in Section 141.003 and fulfillment of the conditions in Section 141.004 are solely the responsibility of the transferee in any transfer of structured settlement payment rights, and neither the structured settlement obligor nor the annuity issuer bear any responsibility for, or any liability arising from, noncompliance with the requirements or failure to fulfill the conditions.

Oregon State Structured Settlement Protection Act

In the state of Oregon 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. There also exists a 3 day waiting period to protect the customer.

A BILL FOR AN ACT

Relating to transfers of structured settlement rights.

Be It Enacted by the People of the State of Oregon:

SECTION 1. { + As used in sections 1 to 6 of this 2005 Act:

(1) 'Annuity issuer' means an insurer that has entered into a contract to fund periodic payments under a structured settlement agreement.

(2) 'Obligor' means a party that has a continuing obligation to make periodic payments to a payee under a structured settlement agreement or an agreement that provides for a qualified assignment as defined in section 130 of the Internal Revenue Code, as of January 1, 2006.

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

(4) 'Payment rights' means rights to receive periodic payments under a structured settlement agreement, whether from the obligor or the annuity issuer.

(5) 'Periodic payments' includes both recurring payments and scheduled future lump sum payments.

(6) 'Responsible administrative authority' means a government authority vested by law with exclusive jurisdiction over the original tort claim or workers' compensation claim that was resolved in a structured settlement agreement.

(7) 'Structured settlement agreement' means an agreement, judgment, stipulation or release embodying the terms of an arrangement for periodic payment of damages from an obligor or an annuity issuer for:

(a) Personal injuries or sickness established by settlement or judgment in resolution of a tort claim; or

(b) Periodic payments in settlement of a workers' compensation claim.

(8) 'Terms of the structured settlement agreement' includes the terms of:

(a) A structured settlement agreement;

(b) An annuity contract;

(c) An agreement that provides for a qualified assignment as defined in section 130 of the Internal Revenue Code, as of January 1, 2006; and

(d) Any order or other approval of any court, responsible administrative authority or other government authority that authorized or approved the structured settlement agreement.

(9) 'Transfer' means any sale, assignment, pledge or other alienation or encumbrance of payment rights made by a payee for consideration. 'Transfer' does not include the creation or perfection of an unspecified security interest in all of the payee's payment rights entered into with an insured depository institution, or an agent or successor in interests of the insured depository institution, in the absence of any action to redirect the payments under the structured settlement agreement to the insured depository institution or otherwise to enforce a security interest against the payment rights.

(10) 'Transfer agreement' means an agreement providing for a transfer of payment rights.

(11) 'Transferee' means a party acquiring or proposing to acquire payment rights through a transfer agreement. + }

SECTION 2. { + (1) A payee may transfer payment rights under sections 1 to 6 of this 2005 Act if:

(a) The payee is domiciled in this state;

(b) The domicile or principal place of business of the obligor or the annuity issuer is located in this state;

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

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

(2) Prior to transferring payment rights under sections 1 to 6 of this 2005 Act, the transferee shall file an application for approval of the transfer in:

(a) The county in which the payee resides;

(b) The county in which the obligor or the annuity issuer maintains its principal place of business; or

(c) Any court or before any responsible administrative authority that approved the structured settlement agreement.

(3) Not less than 20 days prior to the scheduled hearing on an application for approval of a transfer of payment rights, the transferee shall send notice of the proposed transfer to:

(a) The payee;

(b) Any beneficiary irrevocably designated under the annuity contract to receive payments following the payee's death;

(c) The annuity issuer;

(d) The obligor; and

(e) Any other party that has continuing rights or obligations under the structured settlement agreement that is the subject of the hearing.

(4) The notice sent under subsection (3) of this section shall include:

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

(b) A copy of the transfer agreement.

(c) A copy of the disclosure statement provided to the payee as required under section 3 of this 2005 Act.

(d) A listing of each person for whom the payee is legally obligated to provide support, including the age of each of those persons.

(e) Notification that any person receiving notice under subsection (3) of this section is entitled to support, oppose or otherwise respond to the transferee's application, either in person or by counsel, by submitting written comments to the court or responsible administrative authority or by participating in the hearing.

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

SECTION 3. { + Not less than three days prior to the day on which a payee is scheduled to sign a transfer agreement, a transferee shall provide the payee with a statement in not less than 14-point type that sets forth:

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

(2) The aggregate amount of the payments to be transferred.

(3) The discounted present value of the payments and the rate used in calculating the discounted present value. The discounted present value shall be calculated by using the most recently published applicable federal rate for determining the present value of an annuity, as issued by the Internal Revenue Service.

(4) The amount payable to a payee as the result of a transfer. The amount set forth in this subsection shall be calculated before any reductions are made for transfer expenses required to be listed under subsection (5) of this section or any related disbursements.

(5) An itemized listing of all applicable transfer expenses and the transferee's best estimate of the amount of any attorney fees and disbursements. For the purposes of this subsection, ' transfer expenses':

(a) Includes all expenses of a transfer that are required under the transfer agreement to be paid by the payee or deducted from the amount payable to a payee as the result of a transfer.

(b) Does not include attorney fees and related disbursements payable in connection with the transferee's application for approval of the transfer or preexisting obligations of the payee payable for the payee's account from the proceeds of a transfer.

(6) The amount calculated by subtracting the aggregate amount of the actual and estimated transfer expenses required to be listed under subsection (5) of this section from the amount identified in subsection (4) of this section.

(7) The amount of any penalties or liquidated damages payable by the payee in the event of a breach of the transfer agreement by the payee.

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

SECTION 4. { + A transfer of payment rights under sections 1 to 6 of this 2005 Act is not effective and an obligor or annuity issuer is not required to make any payments directly or indirectly to a transferee unless the transfer has been approved in advance in a final court order or order of a responsible administrative authority based on express findings by the court or authority that:

(1) The transfer is in the best interest of the payee, taking into account the welfare and support of all persons for whom the payee is legally obligated to provide support.

(2) The payee has been advised in writing by the transferee to seek advice from an attorney, certified public accountant, actuary or other licensed professional adviser regarding the transfer, and the payee has either received the advice or knowingly waived advice in writing.

(3) The transfer does not contravene any applicable statute or order of any court or other government authority. + }

SECTION 5. { + Following a transfer of payment rights under sections 1 to 6 of this 2005 Act:

(1) The obligor and the annuity issuer shall, as to all parties except the transferee, be discharged and released from all liability for the transferred payments.

(2) The transferee shall be liable to the obligor and the annuity issuer:

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

(b) For any other liabilities or costs, including reasonable costs and attorney fees, arising from compliance by the parties with the order of the court or responsible administrative authority or arising as a consequence of the transferee's failure to comply with sections 1 to 6 of this 2005 Act.

(3) An annuity issuer or an obligor may not be required to divide any periodic payments between the payee and any transferee or assignee or between two or more transferees or assignees.

(4) Any further transfer of payment rights by the payee may be made only after compliance with all of the requirements of sections 1 to 6 of this 2005 Act. + }

SECTION 6. { + (1) The provisions of sections 1 to 6 of this 2005 Act may not be waived by any payee.

(2) A transfer agreement entered into on or after the effective date of this 2005 Act by a payee who resides in this state shall provide that disputes under the transfer agreement, including any claim that the payee has breached the agreement, shall be determined under the laws of this state. A transfer agreement may not authorize the transferee or any other party to confess judgment or consent to entry to judgment against the payee.

(3) A transfer of payment rights may not extend to any payments that are life contingent unless, prior to the date on which the payee signs the transfer agreement, the transferee has established and has agreed to maintain procedures reasonably satisfactory to the annuity issuer and the obligor for:

(a) Periodically confirming the payee's survival.

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

(4) A payee who proposes to make a transfer of payment rights does not incur any penalty, forfeit any application fee or other payment, or otherwise incur any liability to the proposed transferee or a assignee based on any failure of the transfer to satisfy the conditions of sections 1 to 6 of this 2005 Act.

(5) Nothing in sections 1 to 6 of this 2005 Act shall be construed to authorize a transfer of payment rights in contravention of any law or to imply that any transfer under a transfer agreement entered into prior to the effective date of this 2005 Act is valid or invalid.

(6) Compliance with the requirements set forth in section 3 of this 2005 Act and fulfillment of the conditions set forth in section 2 of this 2005 Act shall be solely the responsibility of the transferee in any transfer of payment rights, and neither the obligor nor the annuity issuer shall bear any responsibility for, or any liability arising from, noncompliance with the requirements or failure to fulfill the conditions. + }

SECTION 7. { + Sections 1 to 6 of this 2005 Act apply to transfer agreements entered into on or after the effective date of this 2005 Act. + }

Tennessee State Structured Settlement Protection Act

In the state of Tennessee 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 fair and reasonable, in the customers best interest. There also exists a 10 day waiting period to protect the customer.

AN ACT To amend Tennessee Code Annotated, Title 47, Chapter 18, relative to the protection of individuals receiving structured settlement payments.

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

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

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

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

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

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

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

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

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

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

(7) "Payee" means an individual who is receiving tax-free damage payments under a structured settlement and proposes to make a transfer of payment rights thereunder; 2 PUBLIC ACTS, 2000 [Chapter No. 758

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

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

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

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

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

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

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

(A) the payee is domiciled in this state;

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

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

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

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

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

SECTION 4. No direct or indirect transfer of structured settlement payment rights shall be effective and no structured settlement obligor or annuity issuer shall be required to make any payment directly or indirectly to any transferee of structured settlement payment rights unless Chapter No. 758] PUBLIC ACTS, 2000 3 the transfer has been authorized in advance in a final order of a court of competent jurisdiction or a responsible administrative authority, and complies with all of the following:

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

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

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

(B) the aggregate amount of such payments;

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

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

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

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

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

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

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

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

SECTION 5. (a) The circuit court shall have non-exclusive jurisdiction over any application for authorization under Section 4 of this act of a transfer of structured settlement payment rights. 4 PUBLIC ACTS, 2000 [Chapter No. 758

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

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

(2) a copy of the transfer agreement;

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

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

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

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

(i) the terms of the transfer;

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

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

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

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

(e) The transferee and any assignee shall be liable to the structured settlement obligor and the annuity issuer for any and all taxes and other costs and liabilities, other than costs incurred in opposing the transfer, incurred as a result of complying with the court order approving the transfer. Chapter No. 758] PUBLIC ACTS, 2000 5

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

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

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

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

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

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

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

PASSED: May 15, 2000

Ohio State Structured Settlement Protection Act

In the state of Ohio 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 fair and reasonable, and in the customers best interest. There also exists a 10 day waiting period to protect the customer.

AN ACT

To enact sections 2323.58, 2323.581, 2323.582, 2323.583, 2323.584, 2323.585, 2323.586, and 2323.587 of the Revised Code to require approval by a court of the transfer of payment rights of a payee under a structured settlement for periodic payments of damages in tort actions upon injury to person and to establish procedures for application for such approval by a transferee of those payment rights.

Be it enacted by the General Assembly of the State of Ohio: SECTION 1 . That sections 2323.58, 2323.581, 2323.582, 2323.583, 2323.584, 2323.585, 2323.586, and 2323.587 of the Revised Code be enacted to read as follows:

Sec. 2323.58. As used in this section and sections 2323.581 to 2323.587 of the Revised Code:

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

(B) "Applicable law" means any of the following, AS APPLICABLE IN INTERPRETING THE TERMS OF A STRUCTURED SETTLEMENT AGREEMENT:

(1) The laws of the United States;

(2) The laws of this state, including principles of equity that are applied in the courts of this state;

(3) The laws of any other jurisdiction IF ANY OF THE FOLLOWING APPLIES:

(a) The laws of that other jurisdiction govern the structured settlement.

(b) A court or a responsible administrative authority approved The structured settlement agreement under the laws of that other jurisdiction.

(c) The transfer of payments under the structured settlement is subject to the laws of that other jurisdiction.

(C) "Dependent" means a spouse of a payee, a minor child of a payee, or any other member of the family of a payee or other person whom, by law or by court order or decree, the payee is legally obligated to support.

(D) "Discounted present value" means the fair present value of the future payments under a structured settlement that is determined by discounting those payments to the present, using the most recently published applicable federal rate for determining the present value of an annuity as issued by the United States internal revenue service.

(E) "Independent professional advice" means the advice of an attorney, a certified public accountant, an actuary, or any other licensed professional adviser if all of the following apply:

(1) The payee has engaged the services of the licensed professional adviser to render advice concerning the legal and other implications of a transfer of structured settlement payment rights.

(2) The licensed professional adviser has signed a statement to the effect that the licensed professional adviser rendered advice to the payee concerning the legal and other implications of a transfer of structured settlement payment rights.

(3) The licensed professional adviser is not affiliated in any manner with, referred by, or compensated in any manner by the transferee of the structured settlement payment rights.

(4) The compensation of the licensed professional adviser is not affected by whether or not a transfer of structured settlement payment rights occurs.

(F) "Interested party" includes the payee with respect to a structured settlement, the annuity issuer, the structured settlement agreement obligor, and any other party that has continuing rights or obligations under the structured settlement agreement.

(G) "Payee" means an individual who is receiving periodic payments under a structured settlement agreement that are excludable from the individual's gross income under federal income taxation laws applicable to that individual and who proposes to make a transfer of the rights to receive those periodic payments.

(H) "Periodic payments" includes both continuing monthly or other periodic payments and scheduled future lump-sum payments under a structured settlement.

(I) "Qualified assignment agreement" means an agreement that provides for a qualified assignment, as defined in section 130 of the "Internal Revenue Code of 1986," 100 Stat. 2085, 26 U.S.C.A. 130(c), as amended, through an assignment of the liability under a structured settlement agreement to make periodic payments as damages, on account of personal injury or sickness.

(J) "Responsible administrative authority" means any government authority of another state vested by the law of that state with the original exclusive jurisdiction over the settled claim resolved by a structured settlement.

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

(L) "Structured settlement" means an arrangement for periodic payments of damages for injury to a person that is established by a settlement or a court judgment in resolution of a tort claim.

(M) "Structured settlement agreement" means an agreement, judgment, stipulation, or release that embodies the terms of a structured settlement, including the rights of a payee to receive periodic payments.

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

(O) "Structured settlement payment rights" means the rights under a structured settlement agreement to receive periodic payments from a structured settlement obligor or an annuity issuer if either of the following applies:

(1) The payee, the structured settlement obligor, or the annuity issuer with respect to the structured settlement agreement is a resident of this state.

(2) The structured settlement agreement was approved by a court in this state.

(P) "Terms of a structured settlement" includes the terms of a structured settlement agreement, an insurance contract, a qualified assignment agreement, and any order or approval by a court, a responsible administrative authority, or other government authority authorizing or approving the structured settlement.

(Q) "Transfer" means a sale, assignment, pledge, hypothecation, or any other form of alienation or encumbrance of structured settlement payment rights made by a payee for consideration.

(R) "Transfer agreement" means an agreement that provides for the transfer of structured settlement payment rights from a payee to a transferee.

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

Sec. 2323.581. No direct or indirect transfer of structured settlement payment rights shall be effective, and no structured settlement obligor or annuity issuer shall be required to make any payment directly or indirectly to a transferee of structured settlement payment rights, unless the transferee has provided the payee and other interested parties with the disclosures required by section 2323.582 of the Revised Code and the transfer has been approved in advance in a final order of a court of competent jurisdiction in accordance with sections 2323.583 and 2323.584 of the Revised Code.

Sec. 2323.582. Not less than ten days prior to the date on which a payee becomes obligated under a transfer agreement, the transferee shall provide to the payee a disclosure statement, in boldface type of the minimum size of fourteen points, setting forth all of the following:

(A) The amounts and due dates of the structured settlement payments that would be transferred under the transfer agreement;

(B) The aggregate amount of the payments described in division (A) of this section;

(C) The discounted present value of the payments described in division (A) of this section and the amount of the applicable federal rate used in determining the discounted present value;

(D) The gross amount payable to the payee in exchange for or as consideration for the transfer of the structured settlement payments described in division (A) of this section;

(E) An itemized listing of all brokers\' commissions, service charges, application fees, processing fees, closing costs, filing fees, administrative fees, legal fees, notary fees, and other commissions, fees, costs, expenses, and charges payable by the payee or deductible from the gross amount otherwise payable to the payee as described in division (D) of this section;

(F) The net amount payable to the payee after deduction from the gross amount payable to the payee as described in division (D) of this section of all commissions, fees, costs, expenses, and charges described in division (E) of this section;

(G) The quotient, expressed as a percentage, obtained by dividing the net amount payable to the payee as described in division (F) of this section by the discounted present value of the payments described in division (C) of this section;

(H) The amount of any penalty and the aggregate amount of any liquidated damages, including penalties, payable by the payee in the event of any breach of the transfer agreement by the payee.

Sec. 2323.583. A court of competent jurisdiction may approve a transfer of structured settlement payment rights only in a final order that is based on the express findings of the court, and the express findings shall include all of the following:

(A) The transferee has provided to the payee a disclosure statement that complies with section 2323.582 of the Revised Code, and the payee has confirmed the payee's receipt of the disclosure statement, as evidenced by the payee's notarized signature on a copy of the disclosure statement.

(B)(1) Except as provided in division (B)(2) of this section, the payee has established that the transfer is fair and reasonable and in the best interests of the payee and the payee's dependents.

(2) If, on the effective date of the transfer agreement, a federal hardship standard exists, the payee has established that the transfer meets that hardship standard.

(C) The payee has received independent professional advice regarding the legal and other implications of the transfer.

(D) If the transfer contravenes the terms of the structured settlement involved, all of the following have been complied with:

(1) Each dependent whom the payee is legally obligated to support by court order or decree, in a written approval and waiver, approves the transfer and waives the right to require that the structured settlement payments be made to the payee in accordance with the terms of the structured settlement.

(2) Any court or responsible administrative authority that previously approved the structured settlement, other than the court from which the approval of the transfer is sought under sections 2323.58 to 2323.585 of the Revised Code, has expressly approved the transfer in writing.

(3) The transferee has provided to the court in which the application for approval of the transfer was filed all of the signed original copies of the approvals required under divisions (D)(1) and (2) of this section.

(4) The transferee has furnished each interested party copies of the approvals required under divisions (D)(1) and (2) of this section.

(E) The transferee has given written notice of the transferee's name, address, and taxpayer identification number to the annuity issuer and the structured settlement obligor and has filed a copy of that notice with the court in which the application for approval of the transfer was filed.

(F) The transfer complies with all of the requirements of sections 2323.58 to 2323.585 of the Revised Code and does not contravene any applicable law.

Sec. 2323.584. (A) A person shall file an application under sections 2323.58 to 2323.585 of the Revised Code for the approval in advance of a transfer of structured settlement payment rights in The Ohio court that approved the structured settlement agreement. If the structured settlement agreement was not approved by an Ohio court, a person shall file an application under sections 2323.58 to 2323.585 of the Revised Code for the approval in advance of a transfer of structured settlement payment rights in the probate division of the court of common pleas of the county in which the payee, the structured settlement obligor, or the annuity issuer resides.

(B) The following procedures shall apply to an application for the approval in advance by a court of a transfer of structured settlement payment rights under division (A) of this section:

(1) Upon the filing of the application, the court shall set a date and time for a hearing on the application and shall notify the transferee of the date, time, and place of the hearing.

(2) Not less than twenty days prior to the date set by the court for the hearing on an application filed pursuant to this section, the transferee shall file with the court and shall serve on the court or any responsible administrative authority that previously approved the structured settlement, on all interested parties, and on the annuity issuer and the structured settlement obligor, in the manner prescribed in the Rules of Civil Procedure for the service of process, a notice of the proposed transfer and the application for its approval in advance. The notice shall include all of the following:

(a) A copy of the application;

(b) A copy of the transfer agreement;

(c) A copy of the disclosure statement provided by the transferee pursuant to section 2323.582 of the Revised Code and signed by the payee pursuant to division (A) of section 2323.583 of the Revised Code;

(d) Notification of the date, time, and place of the hearing on the application;

(e) Notification that any interested party may support, oppose, or otherwise respond to the application, either in person or by counsel, by submitting to the court a written response containing the interested party's support of, opposition to, or comments on the application or by participating in the hearing;

(f) Notification of the manner of filing a written response to the application and the time within which the response is required to be filed in order for the court to consider it.

(3) Within fifteen days after receipt of the notice described in division (B)(2) of this section, any interested party who wishes to respond to the application shall file a written response with the court personally or by certified mail, return receipt requested.

(4) At the conclusion of the hearing on an application under this section, the court may grant or deny the approval of the transfer. The court shall enter its order accordingly. If the court grants the approval of the transfer, it shall include in its order all of the express findings specified in section 2323.583 of the Revised Code. If the court denies the approval of the transfer, it shall include in its order the reasons for the denial.

(5) An order of the court made under division (B)(4) of this section is a final and appealable order.

Sec. 2323.585. (A) No payee who proposes to make a transfer of structured settlement payment rights shall incur any penalty, forfeit any application fee or other payment, or otherwise incur any liability to the proposed transferee based on a failure of the transfer to comply with any of the requirements of sections 2323.581 to 2323.584 of the Revised Code.

(B) No provision of this section or section 2323.581, 2323.582, 2323.583, or 2323.584 of the Revised Code may be waived.

(C) No provision of this section or section 2323.581, 2323.582, 2323.583, or 2323.584 of the Revised Code authorizes any transfer of structured settlement payment rights in contravention of applicable law or gives effect to any transfer of structured settlement payment rights that is void under any applicable law.

Sec. 2323.586. The structured settlement obligor and the annuity issuer under a transfer or transfer agreement are immune from liability based upon any claim by the payee, or any party, other than a transferee, claiming through the payee, as to any structured settlement payment rights or periodic payments that are the subject of the transfer or transfer agreement.

Sec. 2323.587. A violation of section 2323.581, 2323.582, 2323.583, 2323.584, 2323.585, or 2323.586 of the Revised Code is an unfair or deceptive act or practice in violation of section 1345.02 of the Revised Code.

SECTION 2 . Sections 2323.58, 2323.581, 2323.582, 2323.583, 2323.584, 2323.585, 2323.586, and 2323.587 of the Revised Code, as enacted by this act,shall apply to a transfer of structured settlement payment rights under a transfer agreement entered into on or after the effective date of this act. As used in this section, "structured settlement payment rights," "transfer," and "transfer agreement" have the same meanings as in section 2323.58 of the Revised Code, as enacted by this act.

South Carolina State Structured Settlement Protection Act

In the state of South Carolina 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. There also exists a 3 day waiting period to protect the customer.

STRUCTURED SETTLEMENT PROTECTION ACT

SECTION 15-50-10. Short title.

This act may be cited as the "Structured Settlement Protection Act".

SECTION 15-50-20. Definitions.

As used in this chapter:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SECTION 15-50-30. Transfer agreements; disclosure statements.

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

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

(2) aggregate amount of the payments;

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

(4) gross advance amount;

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

(6) net advance amount;

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

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

SECTION 15-50-40. Direct or indirect transfer of payment rights; approval by final court order.

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

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

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

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

SECTION 15-50-50. Rights and obligations of structured settlement obligor, annuity issuer and transferee.

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

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

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

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

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

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

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

SECTION 15-50-60. Application for approval of transfer; notice of hearing.

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

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

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

(2) a copy of the transfer agreement;

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

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

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

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

SECTION 15-50-70. Scope of transfer agreement.

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

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

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

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

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

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

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

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

North Carolina State Structured Settlement Protection Act

In the state of North Carolina 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 fair and reasonable, and in the customers best interest.

Structured Settlement Protection Act.

§ 1-543.10. Title.

This Article may be cited as the North Carolina Structured Settlement Protection Act.

§ 1-543.11. Definitions.

For purposes of this Article:

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

(2) 'Discounted present value' means the fair present value of future payments, as determined by discounting such payments to the present utilizing the tables adopted in Article 5 of Chapter 8 of the General Statutes;

(3) 'Independent professional advice' means advice of an attorney, certified public accountant, actuary, or other licensed or registered professional or financial adviser:

a. Who is engaged by a payee to render advice concerning the legal, tax, and financial implications of a transfer of structured settlement payment rights;

b. Who is not in any manner affiliated with or compensated by the transferee of such transfer; and

c. Whose compensation for rendering such advice is not affected by whether a transfer occurs or does not occur;

(4) 'Interested parties' means, with respect to any structured settlement, the payee, any beneficiary designated under the annuity contract to receive payments following the payee's death, the annuity issuer, the structured settlement obligor, and any other party that has continuing rights or obligations under the terms of the structured settlement; Page 2 S.L. 1999-367 Senate Bill 746

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

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

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

(8) 'Settled claim' means the original tort claim resolved by a structured settlement;

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

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

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

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

a. The payee is domiciled in this State;

b. The structured settlement agreement was approved by a court or responsible administrative authority in this State; or

c. The settled claim was pending before the courts of this State when the parties entered into the structured settlement agreement;

(13) 'Transfer' means any sale, assignment, pledge, hypothecation, or other form of alienation or encumbrance made by a payee for consideration;

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

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

§ 1-543.12. Structured settlement payment rights.

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

(1) The transfer complies with the requirements of this Article law;

(2) Not less than 10 days prior to the date on which the payee first incurred any obligation with respect to the transfer, the transferee has provided to the payee a disclosure statement in bold type, no smaller than 14 point setting forth:

a. The amounts and due dates of the structured settlement payments to be transferred;

b. The aggregate amount of such payments;

c. The discounted present value of such payments;

d. The gross amount payable to the payee in exchange for such payments;

e. An itemized listing of all brokers' commissions, service charges, application fees, processing fees, closing costs, filing fees, administrative fees, legal fees, notary fees and other commissions, fees, costs, expenses, and charges payable by the payee or deductible from the gross amount otherwise payable to the payee;

f. The net amount payable to the payee after deduction of all commissions, fees, costs, expenses, and charges described in sub-subdivision e. of this subdivision;

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

h. The discount rate used by the transferee to determine the net amount payable to the payee for the structured settlement payments to be transferred; and

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

(3) The transfer is in the best interest of the payee;

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

(5) The transferee has given written notice of the transferee's name, address, and taxpayer identification number to the annuity issuer and the structured settlement obligor and has filed a copy of such notice with the court or responsible administrative authority; Page 4 S.L. 1999-367 Senate Bill 746

(6) The discount rate used in determining the net amount payable to the payee, as provided in subdivision (2) of this section, does not exceed an annual percentage rate of prime plus five percentage points calculated as if the net amount payable to the payee, as provided in sub-subdivision (2)f. of this section, was the principal of a consumer loan made by the transferee to the payee, and if the structured settlement payments to be transferred to the transferee were the payee's payments of principal plus interest on such loan. For purposes of this subdivision, the prime rate shall be as reported by the Federal Reserve Statistical Release H.15 on the first Monday of the month in which the transfer agreement is signed by both the payee and the transferee, except when the transfer agreement is signed prior to the first Monday of that month then the prime rate shall be as reported by the Federal Reserve Statistical Release H.15 on the first Monday of the preceding month;

(7) Any brokers' commissions, service charges, application fees, processing fees, closing costs, filing fees, administrative fees, notary fees and other commissions, fees, costs, expenses, and charges payable by the payee or deductible from the gross amount otherwise payable to the payee do not exceed two percent (2%) of the net amount payable to the payee;

(8) The transfer of structured settlement payment rights is fair and reasonable; and

(9) Notwithstanding a provision of the structured settlement agreement prohibiting an assignment by the payee, the court may order a transfer of periodic payment rights provided that the court finds that the provisions of this Article are satisfied. If the court or responsible administrative authority authorizes the transfer pursuant to this section, the court or responsible administrative authority shall order the structured settlement obligor to execute an acknowledgment of assignment letter on behalf of the transferee for the amount of the structured settlement payment rights to be transferred.

§ 1-543.13. Jurisdiction.

(a) Where the structured settlement agreement was entered into after commencement of litigation or administrative proceedings in this State, the court or administrative agency where the action was pending shall have exclusive jurisdiction over any application for authorization under this Article of a transfer of structured settlement payment rights.

(b) Where the structured settlement agreement was entered into prior to the commencement of litigation or administrative proceedings, or after the commencement of litigation outside this State, the Superior Court Division of the General Court of Justice shall have nonexclusive original jurisdiction over any application for authorization under this Article of a transfer of structured settlement payment rights.

§ 1-543.14. Procedure for approval of transfers.

(a) Where the structured settlement agreement was entered into after the commencement of litigation or administrative proceedings in this State, the application for authorization of a transfer of structured settlement rights shall be filed with the court or administrative agency where the settled claim was pending as a motion in the cause.

(b) Where the structured settlement agreement was entered into prior to the commencement of litigation or administrative proceedings, or after the commencement of litigation or administrative proceedings outside this State, the application for authorization of a transfer of structured settlement payment rights shall be filed in the superior court with proper venue pursuant to Article 7 of this Chapter. The nature of the action shall be a special proceeding governed by the provisions of Article 33 of this Chapter.

(c) Not less than 30 days prior to the scheduled hearing on any application for authorization of a transfer of structured settlement payment rights under this Article, the transferee shall file with the proper court or responsible administrative authority and serve on any other government authority which previously approved the structured settlement, on all interested parties as defined in G.S. 1-543.11(4), and on the Attorney General, a notice of the proposed transfer and the application for its authorization, including in such notice:

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

(2) A copy of the transfer agreement;

(3) A copy of the disclosure statement required under G.S. 1-543.12(a)(2);

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

(5) Notification of the time and place of the hearing and notification of the manner in which and the time by which written responses to the application must be filed in order to be considered by the court or responsible administrative authority.

(d) The Attorney General shall have standing to raise, appear, and be heard on any matter relating to an application for authorization of a transfer of structured settlement payment rights under this Article.

§ 1-543.15. No waiver; penalties.

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

(b) Any payee who has transferred structured settlement payment rights to a transferee without complying with this Article may bring an action against the transferee to recover actual monetary loss or for damages up to five thousand dollars ($5,000) for the violation by the transferee, or bring actions for both. The payee is entitled to attorneys' fees and costs incurred to enforce this Article. In addition, all unpaid structured settlement payment rights transferred in violation of this Article by any transferee shall be reconveyed to the payee.

(c) No payee who proposes to make a transfer of structured settlement payment rights shall incur any penalty, forfeit any application fee or other payment, or otherwise Page 6 S.L. 1999-367 Senate Bill 746 incur any liability to the proposed transferee based on any failure of such transfer to satisfy the conditions of this Article." Section 2. Article 33 of Chapter 1 of the General Statutes is amended by adding a new section to read as follows:

§ 1-394.1. Special proceedings to determine authority to transfer structured settlement payment rights.

When a special proceeding is commenced to obtain authorization for the transfer of structured settlement payment rights pursuant to Article 44B of this Chapter, the provisions of this Article apply except that the interested parties shall have 30 days to appear and answer the petition, and all hearings on such petitions must be conducted before a superior court judge and all final orders on such petitions must be entered by a superior court judge."

Section 3. This act shall apply to any transfer of structured settlement payment rights under a transfer agreement entered into on or after October 1, 1999, provided that this act shall not apply to any transfer of structured settlement payment rights under a structured settlement agreement entered into or effective prior to that date where the transfer does not contravene the terms of the structured settlement. Nothing contained herein shall imply that any transfer under a transfer agreement reached prior to October 1, 1999, is effective.

In the General Assembly read three times and ratified this the 19th day of July, 1999.

Rhode Island State Structured Settlement Protection Act

In the state of Rhode Island 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. There also exists a 3 day waiting period to protect the customer.

AN ACT RELATING TO INSURANCE - STRUCTURED SETTLEMENT PROTECTION ACT

Introduced By: Senators Connors, Hunter, Coderre, Celona and Goodwin Date Introduced: February 14, 2001

It is enacted by the General Assembly as follows:

SECTION 1. Title 27 of the General Laws entitled "Insurance" is hereby amended by adding thereto the following chapter:

CHAPTER 9.3 STATE STRUCTURED SETTLEMENT PROTECTION ACT

27-9.3-1. Title.

This chapter shall be known and referred to as the "Structured Settlement Protection Act."

27-9.3-2. Definitions.

For purposes of this chapter:

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

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

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

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

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

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

(7) "net advance amount" means the gross advance amount less the aggregate amount of the actual and estimated transfer expenses required to be disclosed under section 27-9.3-3(5) of this chapter;

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

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

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

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

(12) "settled claim" means the original tort claim or workers' compensation claim resolved by a structured settlement;

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

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

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

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

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

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

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

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

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

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

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

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

27-9.3-3. Required disclosures to payee.

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

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

(2) the aggregate amount of such payments;

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

(4) the gross advance amount;

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

(6) the net advance amount;

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

(8) a statement that the payee has the right to cancel the transfer agreement, without penalty or further obligation, not later than the third (3rd) business day after the date the agreement is signed by the payee.

27-9.3-4. Approval of transfers of structured settlement payment rights.

(a) No direct or indirect transfer of structured settlement payment rights shall be effective and no structured settlement obligor or annuity issuer shall be required to make any payment directly or indirectly to any transferee of structured settlement payment rights unless the transfer has been approved in advance by a final court order of the superior court for the county in which the payee resides finding that:

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

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

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

(b) the payee shall have the right to cancel the transfer agreement, without penalty or further obligation, not later than the third (3rd) business day after the date the transfer agreement is signed by the payee.

27-9.3-5. Effects of transfer of structured settlement payment rights.

Following a transfer of structured settlement payment rights under this chapter:

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

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

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

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

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

27-9.3-6. Procedure for approval of transfers.

(a) An application under this chapter for approval of a transfer of structured settlement payment rights shall be made by the transferee and shall be brought in the superior court for the county in which the payee resides.

(b) Not less than twenty (20) days prior to the scheduled hearing on any application for approval of a transfer of structured settlement payment rights under section 27-9.3-4, the transferee shall file with the court and serve on all interested parties a notice of the proposed transfer and the application for its authorization, including with such notice:

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

(2) a copy of the transfer agreement;

(3) a copy of the disclosure statement required under section 27-9.3-3 of this chapter;

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

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

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

27-9.3-7. General provisions construction.

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

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

(c) No transfer of structured settlement payment rights shall extend to any payments that are life-contingent unless, prior to the date on which the payee signs the transfer agreement, the transferee has established and has agreed to maintain procedures reasonably satisfactory to the annuity issuer and the structured settlement obligor for (1) periodically confirming the payee's survival, and (2) giving the annuity issuer and the structured settlement obligor prompt written notice in the event of the payee's death.

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

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

(f) Compliance with the requirements set forth in section 27-9.3-3 and fulfillment of the conditions set forth in section 27-9.3-4 shall be solely the responsibility of the transferee in any transfer of structured settlement payment rights, and neither the structured settlement obligor nor the annuity issuer shall bear any responsibility for, or any liability arising from, noncompliance with such requirements or failure to fulfill such conditions.

SECTION 2. This act shall take effect upon passage and shall apply to any transfer of structured settlement payment rights under a transfer agreement entered into, on or after, the thirtieth (30th) day after the date of enactment of this chapter; provided, however, that nothing contained herein shall imply that any transfer under a transfer agreement reached prior to such date is either effective or ineffective.

New York State Structured Settlement Protection Act

In the state of New York 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 fair and reasonable, and in the customers best interest. There also exists a 10 day waiting period to protect the customer.

§ 5-1701. Definitions. For purposes of this title:

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

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

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

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

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

(i) who is engaged by a claimant or payee to render advice concerning the legal, tax and financial implications of a structured settlement or a transfer of structured settlement payment rights;

(ii) who is not in any manner affiliated with or compensated by the defendant in such settlement or the transferee of such transfer; and

(iii) whose compensation for rendering such advice is not affected by whether a settlement or transfer occurs or does not occur;

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

(g) "net advance amount" means the gross advance amount less the aggregate amount of the expenses required to be disclosed under subdivision (f) of section 5-1703 of this title;

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

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

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

(k) "settled claim" means the original tort claim resolved by a structured settlement;

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

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

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

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

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

(ii) the structured settlement agreement was approved by a court in this state; or

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

(p) "terms of the structured settlement" include, with respect to any structured settlement, the terms of the structured settlement agreement, the annuity contract, any qualified assignment agreement and any order or approval of any court authorizing or approving such structured settlement;

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

(r) "transfer agreement" means the agreement providing for transfer of structured settlement payment rights from a payee to a transferee;

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

(t) "transferee" means a party acquiring or proposing to acquire structured settlement payment rights through a transfer or restructuring.

§ 5-1702. Initial disclosure of structured settlement terms.

In negotiating a structured settlement of claims brought by or on behalf of a claimant who is domiciled in this state, the defendant or defendant's legal representative shall disclose in writing to the claimant or the claimant's legal representative all of the following information that is not otherwise specified in the structured settlement agreement:

(a) the amounts and due dates of the periodic payments to be made under the structured settlement agreement. In the case of payments that will be subject to periodic percentage increases, the amounts of future payments may be disclosed by identifying the base payment amount, the amount and timing of scheduled increases, and the manner in which increases will be compounded;

(b) the amount of the premium payable to the annuity issuer;

(c) the nature and amount of any cost that may be deducted from any of the periodic payments;

(d) where applicable, that any transfer of the periodic payments is prohibited by the terms of the structured settlement and may otherwise be prohibited or restricted under applicable law; and

(e) a statement that the claimant is advised to obtain independent professional advice relating to the legal, tax and financial implications of the settlement, including any adverse consequences and that the defendant or defendant's legal representative may not refer any advisor, attorney or firm for such purpose.

§ 5-1703. Required disclosures to payee.

Not less than ten days prior to the date on which the payee signs a transfer agreement, the transferee shall provide to the payee by first class mail and certified mail, return receipt requested or United States postal service priority mail, a separate disclosure statement, in bold type no smaller than fourteen points, setting forth:

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

(b) the aggregate amount of such payments;

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

(d) the price quote from the original annuity issuer or, if such price quote is not readily available from the original annuity issuer, then a price quote from two other annuity issuers that reflects the current cost of purchasing a comparable annuity for the aggregate amount of payments to be transferred;

(e) the gross advance amount and the annual discount rate, compounded monthly, used to determine such figure; (f) an itemized listing of all commissions, fees, costs, expenses and charges payable by the payee or deductible from the gross amount otherwise payable to the payee and the total amount of such fees;

(g) the net advance amount including the statement: "The net cash payment you receive in this transaction from the buyer was determined by applying the specified discount rate to the amount of future payments received by the buyer, less the total amount of commissions, fees, costs, expenses and charges payable by you";

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

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

§ 5-1704. Provisions prohibited in transfer agreement.

No transfer agreement or other document or agreement executed in association with the transfer shall contain any provision described in this section. To the extent that a prohibited provision is included in a transfer agreement such provision shall be void and unenforceable. A prohibited provision is:

(a) any provision that waives the payee's right to sue under any law, or where the payee agrees not to sue, or which waives jurisdiction or standing to sue under the transfer agreement;

(b) any provision that requires the payee to indemnify and hold harmless the transferee, or to pay the transferee's costs of defense, in any claim or action brought by the payee on or the payee's behalf contesting the transfer for any reason;

(c) any provision that requires the payee to pay the transferee's attorney's fees or costs if the transfer contemplated by the transfer agreement is not completed; and

(d) any provision that requires the payee to pay any tax liability arising under federal tax laws, other than the seller's own tax liability, if any, that results from the transfer.

§ 5-1705. Procedure for approval of transfers.

(a) An action for approval of a transfer of a structured settlement shall be by a special proceeding.

(b) Such proceeding shall be commenced to obtain approval of a transfer of structured settlement payment rights. Such proceeding shall be commenced:

(i) in the supreme court of the county in which the payee resides; or

(ii) in any court which approved the structured settlement agreement.

(c) A copy of the notice of petition and petition or order to show cause and petition shall be served upon all interested parties at least twenty days before the time at which the petition is noticed to be heard. A response shall be served at least seven days before the petition is noticed to be heard.

(d) A petition for approval of a transfer of structured settlement payment rights shall include:

(i) a copy of the transfer agreement;

(ii) a copy of the disclosure statement and proof of notice of that statement required under section 5-1703 of this title; and

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

§ 5-1706. Approval of transfers of structured settlement payment rights.

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

(a) the transfer complies with the requirements of this title;

(b) the transfer is in the best interest of the payee, taking into account the welfare and support of the payee's dependants; and whether the transaction, including the discount rate used to determine the gross advance amount and the fees and expenses used to determine the net advance amount, are fair and reasonable. Provided the court makes the findings as outlined in this subdivision, there is no requirement for the court to find that an applicant is suffering from a hardship to approve the transfer of structured settlement payments under this subdivision;

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

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

(e) is written in plain language and in compliance with section 5-702 of this article.

§ 5-1707. Effects of transfer of structured settlement payment rights.

Following a transfer of structured settlement payment rights under this title:

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

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

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

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

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

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

§ 5-1708. General provisions; construction.

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

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

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

(i) periodically confirming the payee's survival, and

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

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

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

(f) Compliance with the requirements set forth in section 5-1703 of this title and fulfillment of the conditions set forth in section 5-1705 of this title shall be solely the responsibility of the transferee in any transfer of structured settlement payment rights, and neither the structured settlement obligor nor the annuity issuer shall bear any responsibility for, or any liability arising from, non-compliance with such requirements or failure to fulfill such conditions.

(g) The assignee of any transfer agreement or any agreement executed in connection therewith, shall be subject to all claims and defenses of the payee against the transferee arising from such transfer agreement notwithstanding any agreement to the contrary. Recovery hereunder by the payee shall not exceed the amount owing to the assignee at the time the claim or defense is asserted against the assignee. Rights of the payee under this provision can be asserted affirmatively against a claim by the assignee.

§ 5-1708-a. Waiver for families of victims of terrorist attacks.

Notwithstanding the provisions of section four thousand two hundred twenty-four of the insurance law:

(a) An annuity issuer, or an employee or other representative of such issuer, shall be permitted to waive or offer to waive the commission or other compensation otherwise payable thereto as a result of the sale of a policy or contract subject to the provisions of section four thousand two hundred twenty-four of the insurance law to a member of the immediate family of a person who was a victim of the September eleventh, two thousand one terrorist attacks against the United States; and

(b) In connection with such waiver, the insurance company may, at the election of the policyowner or contract owner:

(i) contribute the amount of such waived commission or other compensation to a charitable organization that meets the requirements of section 501(c)(3) of the Internal Revenue Code of 1986, as amended, and is organized for the benefit of families of victims of such attack; or

(ii) deduct from the premium an amount equal to such waived commission or other compensation otherwise payable thereto as a result of the sale.

(c) For purposes of this section, the term "victim" shall mean a decedent who died as a result of wounds or injury incurred as a result of the terrorist attacks against the World Trade Center or the Pentagon on September eleventh, two thousand one, or the terrorist-related aircraft crash in Pennsylvania on such date, but shall not include any individual identified by the United States attorney general to have been a participant or conspirator in such attack or a representative of such an individual.

(d) An issuer seeking to avail itself of the provisions of this section shall first submit its plan of implementation to the superintendent of insurance for prior approval. If the plan is approved, such issuer shall thereafter, upon request of such superintendent, submit a report to such superintendent regarding its experience in the implementation of such provisions.

§ 5-1709. Enforcement.

(a) In addition to the other remedies provided, whenever there shall be a violation of this title, application may be made by the attorney general in the name of the people of the state of New York to a court of competent jurisdiction by a special proceeding to issue an injunction, and upon notice to the defendant of not less than five days, to enjoin and restrain the continuance of such violations; and if it shall appear to the satisfaction of the court or justice that the defendant has, in fact, violated this title, an injunction may be issued by such court or justice, enjoining and restraining any further violation, without requiring proof that any person has, in fact, been injured or damaged thereby. In any such proceedings, the court may make allowances to the attorney general as provided in paragraph six of subdivision (a) of section eighty-three hundred three of the civil practice law and rules, and direct restitution. Whenever the court shall determine that a violation of this title has occurred, the court may impose a civil penalty of not more than one thousand dollars for each violation. In connection with any such proposed application, the attorney general is authorized to take proof and make a determination of the relevant facts and to issue subpoenas in accordance with the civil practice law and rules.

(b) Any payee injured by a violation of this title may bring an action for the recovery of damages. The court may award reasonable attorney's fees to the prevailing plaintiff.

Pennsylvania State Structured Settlement Protection Act

In the state of Pennsylvania 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. There also exists a 10 day waiting period to protect the customer.

Section 1. Short title.

This act shall be known and may be cited as the Structured Settlement Protection Act.

Section 2. Definitions.

The following words and phrases when used in this act shall have the meanings given to them in this section unless the context clearly indicates otherwise:

"Annuity issuer." An insurer, or subsidiary or affiliate thereof, that has issued an insurance contract used to fund periodic payments under a structured settlement.

"Applicable law." The laws of the United States, the laws of this Commonwealth and the laws of any other jurisdiction under whose laws a structured settlement agreement was approved by a court or responsible administrative authority.

"Best interests." The standard applicable to transfers of structured settlement payment rights based on judicial findings regarding the payee and his dependents, as required by section 3(3), unless if at the time the payee and the transferee enter into the transfer agreement, a different standard is contained in the Internal Revenue Code of 1986 (Public law 99-514, 26 U.S.C. § 1 et seq.) or in a United States Treasury regulation adopted pursuant thereto, then such different standard.

"Dependents." Include a payee's spouse and minor children and all other family members and other persons for whom the payee is legally obligated to provide support, including alimony.

"Discounted present value." The fair present value of future payments, as determined by discounting such payments to the present using the most recently published applicable Federal rate for determining the present value of an annuity, as issued by the United States Internal Revenue Service.

"Favorable tax determination." With respect to a proposed transfer of structured settlement payment rights, any of the following authorities that is binding on the parties to such transfer and on the parties to the structured settlement agreement and any qualified assignment agreement and that definitively establishes that the Federal income tax treatment of the structured settlement for the parties to the structured settlement agreement and any qualified assignment agreement, other than the payee, will not be affected by such transfer:

(1) a provision of the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.) or United States Treasury regulation;

(2) a published ruling by the United States Internal Revenue Service;

(3) a private letter ruling by the United States Internal Revenue Service with respect to such transfer; or

(4) other controlling legal authority that is binding on the United States Internal Revenue Service.

"Payee." A person domiciled in this Commonwealth who is receiving tax-free payments under a structured settlement and proposes to make a transfer of payment rights thereunder.

"Periodic payments." Payments made pursuant to a structured settlement agreement, including scheduled future lump sum payments.

"Qualified assignment agreement." An agreement providing for a qualified assignment within the meaning of section 130 of the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.).

"Settled claim." The original personal injury or sickness claim or workers' compensation claim resolved by a structured settlement.

"Structured settlement." An arrangement for periodic payment of damages established by settlement, judgment or decree in resolution of a settled claim.

"Structured settlement agreement." The agreement, judgment, decree, stipulation or release embodying the terms of a structured settlement, including the rights of the payee to receive periodic payments.

"Structured settlement obligor." With respect to any structured settlement, the party that has the continuing obligation to provide periodic payments to the payee under a structured settlement agreement or a qualified assignment agreement.

"Structured settlement payment rights." Rights to receive periodic payments under a structured settlement, whether from the settlement obligor or the annuity issuer, where the payee is domiciled in this Commonwealth.

"Terms of the structured settlement." Include, with respect to any structured settlement, the terms of the structured settlement agreement, the annuity contract, any qualified assignment agreement and any order, decree or approval of any court, or responsible administrative authority authorizing or approving such structured settlement.

"Transfer." Any direct or indirect sale, assignment, pledge, hypothecation or other form of alienation, redirection or encumbrance made by a payee for consideration, provided, however, that this shall not apply to a blanket security agreement used to secure a loan originating from a Federal or State-chartered lending institution. Any transfer made or agreed to under this act shall be considered to be a consumer transaction.

"Transfer agreement." The agreement providing for transfer of structured settlement payment rights from a payee to a transferee.

"Transferee." The party acquiring or proposing to acquire structured settlement payment rights through a transfer.

Section 3. Conditions to transfers of structured settlement payment rights.

(a) Petition.--No transfer of structured settlement payment rights shall be effective and no structured settlement obligor or annuity issuer shall be required to make any payment to any transferee of structured settlement payment rights unless the payee has filed a petition requesting such transfer and the petition has been granted by final order or decree of a court of competent jurisdiction based on such court's express written findings that:

(1) The transfer complies with the requirements of this act and will not contravene other applicable Federal or State statutes or regulations or any applicable law limiting the transfer of workers' compensation claims.

(2) Not less than ten days prior to the date on which the payee first incurred any obligation with respect to the transfer, the transferee has provided to the payee a disclosure statement setting forth all of the following:

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

(ii) The aggregate amount of such payments.

(iii) The discounted present value of such payments, together with the discount rate or rates used in determining such discounted present value.

(iv) The gross amount payable to the payee in exchange for such payments.

(v) An itemized listing of all brokers' commissions, service charges, application or processing fees, closing costs, filing or administrative charges, legal fees, notary fees and other commissions, fees, costs, expenses and charges payable by the payee or deductible from the gross amount otherwise payable to the payee.

(vi) The net amount payable to the payee after deduction of all commissions, fees, costs, expenses and charges described in subclause (v).

(vii) The quotient, expressed as a percentage, obtained by dividing the net payment amount by the discounted present value of the payments.

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

(3) The payee has established that the transfer is in the best interests of the payee or his dependents.

(4) The payee has RECEIVED, OR expressly waived , in a separate written acknowledgment signed by the payee, independent legal advice regarding the implications of the transfer, including consideration of the tax ramifications of the transfer.

(5) If the transfer would contravene the terms of the structured settlement:

(i) the transfer has been expressly approved in writing by:

(A) the payee, the structured settlement obligor and the annuity issuer; provided, however, that such approval may not be unreasonably withheld; and, further provided that the structured settlement obligor and the annuity issuer shall be required to consent to the transfer if the transferee has agreed to indemnify the structured settlement obligor and annuity issuer from all liabilities arising from the factoring transaction and compliance or noncompliance with this act and further provided that if at the time the payee and the transferee propose to enter into the transfer agreement, a favorable tax result is in effect, then the approval of the annuity issuer and the structured settlement obligor shall not berequired; and

(B) any court or responsible administrative authority that previously approved the structured settlement; and

(ii) signed originals of all approvals required under subparagraph (i) have been filed with the court from which the authorization of the transfer is being sought, and originals or copies have been furnished to the payee, the structured settlement obligor and the annuity issuer.

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

(b) Notice.--Prior to entering into any agreement to make a transfer under this act, the payee shall be provided with a written notice on a separate sheet that contains the following, in bold print and at least 12-point type: IMPORTANT NOTICE: You are strongly urged to consult with an attorney who can advise you of the potential tax consequences of this transaction.

(c) Bonds.--If the indemnity in subsection (a)(5)(i)(A) is offered, the court shall require that the transferee obtain a surety bond or an irrevocable standby letter of credit to secure the indemnity obligation. In considering the necessity and amount of any bond, the court shall consider the size of the underlying transaction and the potential liabilities of the structured settlement obligor and annuity issuer.

Section 4. Jurisdiction; procedure for approval of transfers.

The court of common pleas of the judicial district in which the payee is domiciled shall have jurisdiction over any petition as required under section 3 for a transfer of structured settlement payment rights. Not less than 20 days prior to the scheduled hearing on any petition for authorization of a transfer of structured settlement payment rights under section 3, the payee shall file with the court and serve on the transferee a notice of the proposed transfer and the application for its authorization, including in such notice a copy of the payee's petition to the court, a copy of the transfer agreement, a copy of the disclosure statement required under section 3, notification that the transferee, the structured settlement obligor or the annuity issuer is entitled to support, oppose or otherwise respond to the payee's petition, either in person or by counsel, by submitting written comments to the court or by participating in the hearing and notification of the time and place of the hearing and notification of the manner in which and the time by which written responses to the petition must be filed, which shall be not less than 20 days after service of the payee's notice, in order to be considered by the court.

Section 5. Discharge of structured settlement obligor and annuity issuer.

Upon an appropriate judicial order approving a petition for a transfer of structured settlement payment rights, the structured settlement obligor and annuity issuer shall be discharged from all liability for the payments and portions thereof transferred as to all parties except the transferee.

Section 6. No waiver; no penalties.

(a) Waiver.--The provisions of this act may not be waived.

(b) Penalties.--No payee who files a petition for the transfer of structured settlement payment rights shall incur any penalty, forfeit any application fee or other payment, or otherwise incur any liability to the proposed transferee based on any failure of such transfer to satisfy the conditions of section 3.

Section 7. Penalty.

A violation of this act shall be deemed a violation of the act of December 17, 1968 (P.L.1224, No.387), known as the Unfair Trade Practices and Consumer Protection Law.

Section 8. Construction.

Nothing contained in this act shall be construed to authorize any transfer of structured settlement payment rights in contravention of applicable State statutes or regulations or to give effect to any transfer to structured settlement payment rights that is void under applicable State statutes or regulations.

Section 9. Applicability.

This act shall apply to any petition for the transfer of structured settlement payment rights under a transfer agreement sought on or after the effective date of this act, provided, however, that nothing contained in this act shall imply that any transfer under a transfer agreement reached prior to such date is effective or that any party is under any obligation to make transferred payments to the transferee of any such prior transfer.

Section 10. Effective date.

This act shall take effect in 60 days.

40 P.S. §4002-4008 (2001)

New Mexico State Structured Settlement Protection Act

In the state of New Mexico 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. There also exists a 3 day waiting period to protect the customer.

ARTICLE 1A
Structured Settlement Protection Act

39-1A-1. Short title.

This act may be cited as the "Structured Settlement Protection Act".

39-1A-2. Definitions.

As used in the Structured Settlement Protection Act [39-1A-1 NMSA 1978]:

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

B. "court" means:

(1) the court of original jurisdiction that authorized or approved a structured settlement; or

(2) if the court that authorized or approved the structured settlement no longer has jurisdiction to approve a transfer of payment rights under the structured settlement under the Structured Settlement Protection Act, a district court or a probate court located in the county in which the payee resides;

C. "dependents" includes a payee's spouse, minor children and all other persons for whom the payee is legally obligated to provide support, including alimony;

D. "discounted present value" means the present value of future payments determined by discounting the payments to the present using the most recently published applicable federal rate for determining the present value of an annuity, as issued by the United States internal revenue service;

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

F. "independent professional advice" means advice of an attorney, certified public accountant, actuary or other licensed professional adviser;

G. "interested party" means, with respect to any structured settlement:

(1) the payee;

(2) any beneficiary irrevocably designated under the annuity contract to receive payments following the payee's death;

(3) the annuity issuer;

(4) the structured settlement obligor; and

(5) any other party that has continuing rights or obligations under the structured settlement;

H. "net advance amount" means the gross advance amount less the aggregate amount of the actual and estimated transfer expenses required to be disclosed under Subsection E of Section 3 [39-1A-3(E) NMSA 1978] of the Structured Settlement Protection Act;

I. "payee" means an individual who is receiving tax-free payments under a structured settlement and proposes to transfer payment rights under the structured settlement;

J. "periodic payments" includes both recurring payments and scheduled future lump-sum payments;

K. "qualified assignment agreement" means an agreement providing for a qualified assignment within the meaning of Section 130 of the Internal Revenue Code of 1986, as amended;

L. "settled claim" means the original tort claim or workers' compensation claim resolved by a structured settlement;

M. "structured settlement" means an arrangement for periodic payment of damages for personal injuries or sickness established by settlement or judgment in resolution of a tort claim or for periodic payments in settlement of a workers' compensation claim;

N. "structured settlement agreement" means the agreement, judgment, stipulation or release embodying the terms of a structured settlement;

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

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

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

(2) the structured settlement agreement was authorized or approved by a court located in this state; or

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

Q. "terms of the structured settlement" include, with respect to any structured settlement, the terms of the structured settlement agreement, the annuity contract, any qualified assignment agreement and any order or other approval of the court;

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

S. "transfer agreement" means the agreement providing for a transfer of structured settlement payment rights;

T. "transfer expenses" means all the expenses of a transfer that are required under the transfer agreement to be paid by the payee or deducted from the gross advance amount, including court filing fees, attorney fees, escrow fees, lien recording fees, judgment and lien search fees, finders' fees, commissions and other payments to a broker or other intermediary, except that "transfer expenses" does not include preexisting obligations of the payee payable on the payee's account from the proceeds of a transfer; and

U. "transferee" means a party acquiring or proposing to acquire structured settlement payment rights through a transfer.

39-1A-3. Required disclosures to payee.

At least three days before the date on which the payee signs a transfer agreement, the transferee shall provide to the payee a separate disclosure statement, in bold type at least fourteen points in size, that states:

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

B. the aggregate amount of the payments;

C. the discounted present value of the payments to be transferred, which shall be identified as the "calculation of current value of the transferred structured settlement payments under federal standards for valuing annuities", and the amount of the applicable federal rate used in calculating the discounted present value;

D. the gross advance amount;

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

F. the net advance amount;

G. the amount of any penalties or liquidated damages payable by the payee in the event of any breach of the transfer agreement by the payee; and

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

39-1A-4. Approval of transfers of structured settlement payment rights.

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

A. the transfer is in the best interest of the payee, taking into account the welfare and support of the payee's dependents;

B. the payee has been advised in writing by the transferee to seek independent professional advice regarding the transfer and has either received the advice or knowingly waived the advice in writing; and

C. the transfer does not contravene any applicable statute or an order of any court or other governmental authority.

9-1A-5. Effects of transfer of structured settlement payment rights.

Following a transfer of structured settlement payment rights pursuant to the Structured Settlement Protection Act [39-1A-1 NMSA 1978]:

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

B. the transferee shall be liable to the structured settlement obligor and the annuity issuer:

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

(2) for any other liabilities or costs, including reasonable costs and attorney fees, arising from compliance by the parties with the order of the court or arising as a consequence of the transferee's failure to comply with the provisions of the Structured Settlement Protection Act;

C. the transferee shall be liable to the payee:

(1) if the transfer contravenes the terms of the structured settlement, for any taxes incurred by the payee as a consequence of the transfer; and

(2) for any other liabilities or costs, including reasonable costs and attorney fees, arising as a consequence of the transferee's failure to comply with the provisions of the Structured Settlement Protection Act;

D. neither the structured settlement obligor nor the annuity issuer may be required to divide any periodic payment between the payee and any transferee or assignee or between two or more transferees or assignees; and

E. any further transfer of structured settlement payment rights by the payee may be made only after compliance with all of the requirements of the Structured Settlement Protection Act.

39-1A-6. Procedure for approval of transfers.

A. An application under the Structured Settlement Protection Act [39-1A-1 NMSA 1978] for approval of a transfer of structured settlement payment rights shall be made by the transferee and shall be brought in court.

B. At least twenty days before the date of the scheduled hearing on any application for approval of a transfer of structured settlement payment rights under Section 4 [39-1A-4 NMSA 1978] of the Structured Settlement Protection Act, the transferee shall file with the court and serve on all interested parties a notice of the proposed transfer and the application for authorization, including with the notice:

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

(2) a copy of the transfer agreement;

(3) a copy of the disclosure statement required under Section 3 [39-1A-3 NMSA 1978] of the Structured Settlement Protection Act;

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

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

(6) notice of the time and place of the hearing and notification of the manner in which and the time by which written responses to the application must be filed to be considered by the court.

C. Written responses to the application under Paragraph (6) of Subsection B of this section shall be filed on or before the fifteenth day after the date the transferee's notice is served.

39-1A-7. General provisions; construction.

A. The provisions of the Structured Settlement Protection Act [39-1A-1 NMSA 1978] shall not be waived by any payee.

B. Any transfer agreement entered into by a payee who resides in this state shall provide that disputes under the transfer agreement, including any claim that the payee has breached the agreement, shall be determined in and under the laws of this state. The transfer agreement shall not authorize the transferee or any other party to confess judgment or consent to entry of judgment against the payee.

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

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

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

D. A payee who proposes to make a transfer of structured settlement payment rights shall not incur any penalty, forfeit any application fee or other payment, or otherwise incur any liability to the proposed transferee or any assignee based on any failure of the transfer to satisfy the conditions of the Structured Settlement Protection Act.

E. Nothing contained in the Structured Settlement Protection Act may be construed to authorize any transfer of structured settlement payment rights in contravention of any law or to imply that any transfer under a transfer agreement entered into before July 1, 2005 is valid or invalid.

F. Compliance with the requirements in Section 3 [39-1A-3 NMSA 1978] of the Structured Settlement Protection Act and fulfillment of the conditions in Section 4 [39-1A-4 NMSA 1978] of that act are solely the responsibility of the transferee in any transfer of structured settlement payment rights, and neither the structured settlement obligor nor the annuity issuer bears any responsibility for, or any liability arising from, noncompliance with the requirements or failure to fulfill the conditions.