Enrolled HB 64: Relating to court approval of the purchase of structured settlements.
00Enrolled HB 64 01 Relating to court approval of the purchase of structured settlements. 02 _______________ 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 that 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, other applicable state and federal law, and the orders of any court; 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 payee has received by certified 02 mail, return receipt requested, or other means that provide a comparable record of 03 delivery, a disclosure statement in bold type, no smaller than 14 points, specifying 04 (A) the amounts and due dates of the structured settlement 05 payments to be transferred; 06 (B) the aggregate amount of the payments; 07 (C) the discounted present value of the payments, together with 08 the discount rate used in determining the discounted present value; 09 (D) the gross amount payable to the payee in exchange for the 10 payments; 11 (E) an itemized listing of all broker's commissions, service 12 charges, application fees, processing fees, closing costs, filing fees, referral 13 fees, administrative fees, legal fees, notary fees, and other commissions, fees, 14 costs, expenses, and charges payable by the payee or deductible from the gross 15 amount otherwise payable to the payee; 16 (F) the net amount payable to the payee after deduction of all 17 commissions, fees, costs, expenses, and charges described in (E) of this 18 paragraph; 19 (G) the quotient, expressed as a percentage, obtained by 20 dividing the net payment amount by the discounted present value of the 21 payments; and 22 (H) the amount of any penalty and the aggregate amount of any 23 liquidated damages, including penalties, payable by the payee in the event of a 24 breach of the transfer agreement by the payee; 25 (4) the payee has established that the transfer is in the best interests of 26 the payee and the payee's dependents; 27 (5) the payee has received independent professional advice regarding 28 the legal, tax, and financial implications of the transfer; 29 (6) the transferee has given written notice of the transferee's name, 30 address, and taxpayer identification number to the annuity issuer and the structured 31 settlement obligor and has filed a copy of the notice with the court; and
01 (7) the transfer agreement provides that any disputes between the 02 parties will be governed, interpreted, construed, and enforced in accordance with the 03 laws of this state and that the domicile state of the payee is the proper venue to bring 04 any cause of action arising out of a breach of the agreement; the transfer agreement 05 must also provide that the parties agree to the jurisdiction of any court of competent 06 jurisdiction located in this state. 07 (b) If the transfer would contravene the terms of the structured settlement, 08 upon the filing of a written objection by any interested party and after considering the 09 objection and any response to it, the court may grant, deny, or impose conditions upon 10 the proposed transfer as the court considers just and proper under the facts and 11 circumstances in accordance with established principles of law. Any order approving 12 a transfer must require that the transferee indemnify the annuity issuer and the 13 structured settlement obligor for any liability including reasonable costs and attorney 14 fees arising from compliance by the issuer or obligor with the order of the court. 15 (c) A provision in a transfer agreement giving a transferee power to confess 16 judgment against a payee is unenforceable to the extent the amount of the judgment 17 would exceed the amount paid by the transferee to the payee, less any payments 18 received from the structured settlement obligor or the payee. 19 Sec. 09.68.210. Jurisdiction; procedure for approval of transfers. (a) The 20 superior court where the action giving rise to the structured settlement was maintained 21 or could have been maintained or where the payee is domiciled has jurisdiction over 22 an application for approval under AS 09.68.200 of a transfer of structured settlement 23 payment rights. 24 (b) Not less than 30 days before the scheduled hearing on an application for 25 authorization of a transfer of structured settlement payment rights under 26 AS 09.68.200, the transferee shall file with the court and serve on any other 27 government authority that previously approved the structured settlement and all 28 interested parties a notice of the proposed transfer and the application for its 29 authorization. The notice must include 30 (1) a copy of the transferee's application to the court; 31 (2) a copy of the transfer agreement;
01 (3) a copy of the disclosure statement required under AS 09.68.200; 02 (4) notification that an interested party is entitled to support, oppose, or 03 otherwise respond to the transferee's application, either in person or by counsel, by 04 submitting written comments to the court or by participating in the hearing; and 05 (5) notification of the time and place of the hearing and notification of 06 the manner in which and the time by which written responses to the application must 07 be filed in order to be considered by the court. 08 (c) Written responses to the application must be filed within 15 days after 09 service of the transferee's notice. 10 Sec. 09.68.220. No waiver and no penalty. (a) The provisions of 11 AS 09.68.200 - 09.68.230 may not be waived. 12 (b) A payee who proposes to make a transfer of structured settlement payment 13 rights may not incur a penalty, forfeit an application fee or other payment, or 14 otherwise incur any liability to the proposed transferee based on the failure of the 15 transfer to satisfy the conditions of AS 09.68.200 - 09.68.230. 16 Sec. 09.68.230. Definitions. In AS 09.68.200 - 09.68.230, 17 (1) "annuity issuer" means an insurer that has issued an annuity 18 contract to be used to fund periodic payments under a structured settlement; 19 (2) "dependents" means a payee's spouse and minor children and all 20 other family members and other persons for whom the payee is legally obligated to 21 provide support, including spousal maintenance; 22 (3) "discounted present value" means, with respect to a proposed 23 transfer of structured settlement payment rights, the fair present value of future 24 payments, as determined by discounting the payments to the present using the most 25 recently published applicable federal rate for determining the present value of an 26 annuity, as issued by the United States Internal Revenue Service; 27 (4) "independent professional advice" means advice of an attorney, 28 certified public accountant, actuary, or other professional adviser 29 (A) who is engaged by a payee to render advice concerning the 30 legal, tax, and financial implications of a transfer of structured settlement 31 payment rights;
01 (B) who is not in any manner affiliated with or compensated by 02 the transferee of the transfer; and 03 (C) whose compensation for providing the advice is not 04 affected by whether a transfer occurs or does not occur; 05 (5) "interested parties" means the payee, a beneficiary designated 06 under the annuity contract to receive payments following the payee's death or, if the 07 designated beneficiary is a minor, the designated beneficiary's parent or guardian, the 08 annuity issuer, the structured settlement obligor, and any other party that has 09 continuing rights or obligations under the structured settlement; 10 (6) "payee" means an individual who is receiving tax-free damage 11 payments under a structured settlement and proposes to make a transfer of payment 12 rights under the structured settlement; 13 (7) "qualified assignment agreement" means an agreement providing 14 for a qualified assignment as provided by 26 U.S.C. 130 (United States Internal 15 Revenue Code), as amended through December 31, 1998; 16 (8) "settled claim" means the original tort claim or workers' 17 compensation claim resolved by a structured settlement; 18 (9) "structured settlement" means an arrangement for periodic payment 19 of damages for personal injuries established by settlement or judgment in resolution of 20 a tort claim or for periodic payments in settlement of a workers' compensation claim; 21 (10) "structured settlement agreement" means the agreement, 22 judgment, stipulation, or release embodying the terms of a structured settlement, 23 including the rights of the payee to receive periodic payments; 24 (11) "structured settlement obligor" means the party that has the 25 continuing periodic payment obligation to the payee under a structured settlement 26 agreement or a qualified assignment agreement; 27 (12) "structured settlement payment rights" means rights to receive 28 periodic payments, including lump-sum payments, under a structured settlement, 29 whether from the settlement obligor or the annuity issuer, where 30 (A) the payee or any other interested party is domiciled in the 31 state;
01 (B) the structured settlement agreement was approved by a 02 court in the state; or 03 (C) the settled claim was pending before the courts of this state 04 when the parties entered into the structured settlement agreement; 05 (13) "terms of the structured settlement" means the terms of the 06 structured settlement agreement, the annuity contract, a qualified assignment 07 agreement, and an order or approval of a court, responsible administrative authority, or 08 other government authority authorizing or approving the structured settlement; 09 (14) "transfer" means a sale, assignment, pledge, hypothecation, or 10 other form of alienation or encumbrance made by a payee for consideration; 11 (15) "transfer agreement" means the agreement providing for transfer 12 of structured settlement payment rights from a payee to a transferee; 13 (16) "transferee" means a person who is receiving or will receive 14 structured settlement payment rights resulting from a transfer.