HB 97: "An Act relating to court approval of the purchase of structured settlements."
00 HOUSE BILL NO. 97 01 "An Act relating to court approval of the purchase of structured settlements." 02 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 03 * Section 1. AS 09.68 is amended by adding new sections to read: 04 Sec. 09.68.200. Conditions to transfers of structured settlement payment 05 rights and structured settlement agreements. (a) A transfer of structured 06 settlement payment rights is not effective and a structured settlement obligor or 07 annuity issuer is not required to make a payment directly or indirectly to a transferee 08 of structured settlement payment rights unless the transfer has been approved by a 09 superior court based on the court's written express findings that 10 (1) the structured settlement arose from an action filed in Alaska or 11 which could have been filed in Alaska, or the payee of the structured settlement is 12 domiciled in Alaska; 13 (2) the transfer complies with the requirements of AS 09.68.200 - 14 09.68.230 and other applicable state and federal law; 15 (3) not less than 10 days before the date on which the payee first
01 incurred an obligation with respect to the transfer, the transferee has provided to the 02 payee a disclosure statement in bold type, no smaller than 14 points, specifying 03 (A) the amounts and due dates of the structured settlement 04 payments to be transferred; 05 (B) the aggregate amount of the payments; 06 (C) the discounted present value of the payments, together with 07 the discount rate used in determining the discounted present value; 08 (D) the gross amount payable to the payee in exchange for the 09 payments; 10 (E) an itemized listing of all broker's commissions, service 11 charges, application fees, processing fees, closing costs, filing fees, referral 12 fees, administrative fees, legal fees, notary fees, and other commissions, fees, 13 costs, expenses, and charges payable by the payee or deductible from the gross 14 amount otherwise payable to the payee; 15 (F) the net amount payable to the payee after deduction of all 16 commissions, fees, costs, expenses, and charges described in (E) of this 17 paragraph; 18 (G) the quotient, expressed as a percentage, obtained by 19 dividing the net payment amount by the discounted present value of the 20 payments; and 21 (H) the amount of any penalty and the aggregate amount of any 22 liquidated damages, including penalties, payable by the payee in the event of a 23 breach of the transfer agreement by the payee; 24 (4) the payee has established that the transfer is in the best interests of 25 the payee and the payee's dependents; 26 (5) the payee has received independent professional advice regarding 27 the legal, tax, and financial implications of the transfer; 28 (6) the transferee has given written notice of the transferee's name, 29 address, and taxpayer identification number to the annuity issuer and the structured 30 settlement obligor and has filed a copy of the notice with the court; and 31 (7) the transfer agreement provides that any disputes between the
01 parties will be governed, interpreted, construed, and enforced in accordance with the 02 laws of this state and that the domicile state of the payee is the proper venue to bring 03 any cause of action arising out of a breach of the agreement; the transfer agreement 04 must also provide that the parties agree to the jurisdiction of any court of competent 05 jurisdiction located in this state. 06 (b) If the transfer would contravene the terms of the structured settlement, 07 upon the filing of a written objection by any interested party and after considering the 08 objection and any response to it, the court may grant, deny, or impose conditions upon 09 the proposed transfer as the court considers just and proper under the facts and 10 circumstances in accordance with established principles of law. Any order approving 11 a transfer must require that the transferee indemnify the annuity issuer and the 12 structured settlement obligor for any liability including reasonable costs and attorney 13 fees arising from compliance by the issuer or obligor with the order of the court. 14 (c) A provision in a transfer agreement giving a transferee power to confess 15 judgment against a payee is unenforceable to the extent the amount of the judgment 16 would exceed the amount paid by the transferee to the payee, less any payments 17 received from the structured settlement obligor or the payee. 18 Sec. 09.68.210. Jurisdiction; procedure for approval of transfers. (a) The 19 superior court where the action giving rise to the structured settlement was maintained 20 or could have been maintained has jurisdiction over an application for approval under 21 AS 09.68.200 of a transfer of structured settlement payment rights. 22 (b) Not less than 20 days before the scheduled hearing on an application for 23 authorization of a transfer of structured settlement payment rights under 24 AS 09.68.200, the transferee shall file with the court and serve on any other 25 government authority that previously approved the structured settlement and all 26 interested parties a notice of the proposed transfer and the application for its 27 authorization. The notice must include 28 (1) a copy of the transferee's application to the court; 29 (2) a copy of the transfer agreement; 30 (3) a copy of the disclosure statement required under AS 09.68.200; 31 (4) notification that an interested party is entitled to support, oppose, or
01 otherwise respond to the transferee's application, either in person or by counsel, by 02 submitting written comments to the court or by participating in the hearing; and 03 (5) notification of the time and place of the hearing and notification of 04 the manner in which and the time by which written responses to the application must 05 be filed in order to be considered by the court. 06 (c) Written responses to the application must be filed within 15 days after 07 service of the transferee's notice. 08 Sec. 09.68.220. No waiver and no penalty. (a) The provisions of 09 AS 09.68.200 - 09.68.230 may not be waived. 10 (b) A payee who proposes to make a transfer of structured settlement payment 11 rights may not incur a penalty, forfeit an application fee or other payment, or 12 otherwise incur any liability to the proposed transferee based on the failure of the 13 transfer to satisfy the conditions of AS 09.68.200 - 09.68.230. 14 Sec. 09.68.230. Definitions. In AS 09.68.200 - 09.68.230, 15 (1) "annuity issuer" means an insurer that has issued an annuity 16 contract to be used to fund periodic payments under a structured settlement; 17 (2) "dependents" means a payee's spouse and minor children and all 18 other family members and other persons for whom the payee is legally obligated to 19 provide support, including spousal maintenance; 20 (3) "discounted present value" means, with respect to a proposed 21 transfer of structured settlement payment rights, the fair present value of future 22 payments, as determined by discounting the payments to the present using the most 23 recently published applicable federal rate for determining the present value of an 24 annuity, as issued by the United States Internal Revenue Service; 25 (4) "independent professional advice" means advice of an attorney, 26 certified public accountant, actuary, or other professional adviser 27 (A) who is engaged by a payee to render advice concerning the 28 legal, tax, and financial implications of a transfer of structured settlement 29 payment rights; 30 (B) who is not in any manner affiliated with or compensated by 31 the transferee of the transfer; and
01 (C) whose compensation for providing the advice is not 02 affected by whether a transfer occurs or does not occur; 03 (5) "interested parties" means the payee, a beneficiary designated 04 under the annuity contract to receive payments following the payee's death or, if the 05 designated beneficiary is a minor, the designated beneficiary's parent or guardian, the 06 annuity issuer, the structured settlement obligor, and any other party that has 07 continuing rights or obligations under the structured settlement; 08 (6) "payee" means an individual who is receiving tax-free damage 09 payments under a structured settlement and proposes to make a transfer of payment 10 rights under the structured settlement; 11 (7) "qualified assignment agreement" means an agreement providing 12 for a qualified assignment as provided by 26 U.S.C. 130 (United States Internal 13 Revenue Code), as amended through December 31, 1998; 14 (8) "settled claim" means the original tort claim or workers' 15 compensation claim resolved by a structured settlement; 16 (9) "structured settlement" means an arrangement for periodic payment 17 of damages for personal injuries established by settlement or judgment in resolution of 18 a tort claim or for periodic payments in settlement of a workers' compensation claim; 19 (10) "structured settlement agreement" means the agreement, 20 judgment, stipulation, or release embodying the terms of a structured settlement, 21 including the rights of the payee to receive periodic payments; 22 (11) "structured settlement obligor" means the party that has the 23 continuing periodic payment obligation to the payee under a structured settlement 24 agreement or a qualified assignment agreement; 25 (12) "structured settlement payment rights" means rights to receive 26 periodic payments, including lump-sum payments, under a structured settlement, 27 whether from the settlement obligor or the annuity issuer, where 28 (A) the payee or any other interested party is domiciled in the 29 state; 30 (B) the structured settlement agreement was approved by a 31 court in the state; or
01 (C) the settled claim was pending before the courts of this state 02 when the parties entered into the structured settlement agreement; 03 (13) "terms of the structured settlement" means the terms of the 04 structured settlement agreement, the annuity contract, a qualified assignment 05 agreement, and an order or approval of a court, responsible administrative authority, or 06 other government authority authorizing or approving the structured settlement; 07 (14) "transfer" means a sale, assignment, pledge, hypothecation, or 08 other form of alienation or encumbrance made by a payee for consideration; 09 (15) "transfer agreement" means the agreement providing for transfer 10 of structured settlement payment rights from a payee to a transferee; 11 (16) "transferee" means a person who is receiving or will receive 12 structured settlement payment rights resulting from a transfer.