Text: SF00336 Text: SF00338 Text: SF00300 - SF00399 Text: SF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN
1 1 SENATE FILE 337
1 2
1 3 AN ACT
1 4 RELATING TO TRANSFERS OF STRUCTURED SETTLEMENT PAYMENT RIGHTS
1 5 FOR TORT AND WORKERS' COMPENSATION CLAIMS, PROVIDING CIVIL
1 6 REMEDIES, AND AN APPLICABILITY DATE.
1 7
1 8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 9
1 10 Section 1. NEW SECTION. 682.1 SHORT TITLE.
1 11 This chapter shall be known and may be cited as the
1 12 "Structured Settlement Protection Act".
1 13 Sec. 2. NEW SECTION. 682.2 DEFINITIONS.
1 14 As used in this chapter, unless the context otherwise
1 15 requires:
1 16 1. "Annuity issuer" means an issuer that has issued an
1 17 insurance contract used to fund periodic payments under a
1 18 structured settlement.
1 19 2. "Dependents" means a payee's spouse and minor children
1 20 and all other family members and other persons for whom the
1 21 payee is legally obligated to provide support, including
1 22 alimony.
1 23 3. "Discounted present value" means the fair present value
1 24 of future payments, as determined by discounting such payments
1 25 to the present using the most recently published applicable
1 26 federal rate for determining the present value of an annuity,
1 27 as issued by the United States internal revenue service.
1 28 4. "Gross advance amount" means the sum payable to the
1 29 payee or for the payee's account as consideration for a
1 30 transfer of structured settlement payment rights before any
1 31 reductions for transfer expenses or other deductions to be
1 32 made from such consideration.
1 33 5. "Independent professional advice" means advice of an
1 34 attorney, certified public accountant, actuary, or other
1 35 licensed professional advisor.
2 1 6. "Interested parties" means, with respect to a
2 2 structured settlement, the payee, a beneficiary irrevocably
2 3 designated under the annuity contract to receive payments
2 4 following the payee's death, the annuity issuer, the
2 5 structured settlement obligor, and any other party that has
2 6 continuing rights or obligations under the structured
2 7 settlement.
2 8 7. "Net advance amount" means the gross advance amount
2 9 less the aggregate amount of the actual and estimated transfer
2 10 expenses required to be disclosed under section 682.3,
2 11 subsection 5.
2 12 8. "Payee" means an individual who is receiving tax-free
2 13 payments under a structured settlement and proposes to make a
2 14 transfer of payment rights.
2 15 9. "Periodic payments" means both recurring payments and
2 16 scheduled future lump sum payments.
2 17 10. "Qualified assignment agreement" means an agreement
2 18 providing for a qualified assignment within the meaning of
2 19 section 130 of the Internal Revenue Code.
2 20 11. "Responsible administrative authority" means, with
2 21 respect to a structured settlement, any government authority
2 22 vested by law with exclusive jurisdiction over the settled
2 23 claim resolved by the structured settlement.
2 24 12. "Settled claim" means the original tort claim or
2 25 workers' compensation claim resolved by a structured
2 26 settlement.
2 27 13. "Structured settlement" means an arrangement for
2 28 periodic payment of damages for personal injuries established
2 29 by settlement or judgment in resolution of a tort claim or for
2 30 periodic payments in settlement of a workers' compensation
2 31 claim.
2 32 14. "Structured settlement agreement" means the agreement,
2 33 judgment, stipulation, or release embodying the terms of a
2 34 structured settlement.
2 35 15. "Structured settlement obligor" means, with respect to
3 1 a structured settlement, the party that has the continuing
3 2 periodic payment obligation to the payee under a structured
3 3 settlement agreement or a qualified assignment agreement.
3 4 16. "Structured settlement payment rights" means rights to
3 5 receive periodic payments under a structured settlement,
3 6 whether from the structured settlement obligor or the annuity
3 7 issuer, if any of the following exists:
3 8 a. One of the following is true:
3 9 (1) The payee is domiciled in this state.
3 10 (2) The domicile or principal place of business of a
3 11 structured settlement obligor or the annuity issuer is located
3 12 in this state.
3 13 b. The structured settlement agreement was approved by a
3 14 court or responsible administrative authority in this state.
3 15 c. The structured settlement agreement is expressly
3 16 governed by the laws of this state.
3 17 17. "Terms of the structured settlement" means, with
3 18 respect to a structured settlement, the terms of the
3 19 structured settlement agreement, the annuity contract, any
3 20 qualified assignment agreement, and any order or approval of
3 21 any court or responsible administrative authority or other
3 22 government authority authorizing or approving the structured
3 23 settlement.
3 24 18. "Transfer" means any sale, assignment, pledge,
3 25 hypothecation, or other alienation or encumbrance of
3 26 structured settlement payment rights made by a payee for
3 27 consideration. "Transfer" does not include the creation or
3 28 perfection of a security interest in structured settlement
3 29 payment rights under a blanket security agreement entered into
3 30 with an insured depository institution, in the absence of any
3 31 action to redirect the structured settlement payments to such
3 32 insured depository institution, or an agent or successor in
3 33 interest thereof, or otherwise to enforce such blanket
3 34 security interest against the structured settlement payment
3 35 rights.
4 1 19. "Transfer agreement" means the agreement providing for
4 2 transfer of structured settlement payment rights.
4 3 20. "Transfer expenses" means all expenses of a transfer
4 4 that are required under the transfer agreement to be paid by
4 5 the payee or deducted from the gross advance amount,
4 6 including, without limitation, court filing fees, attorney
4 7 fees, escrow fees, lien recordation fees, judgment and lien
4 8 search fees, finders' fees, commissions, and other payments to
4 9 a broker or other intermediary. "Transfer expenses" does not
4 10 include preexisting obligations of the payee payable for the
4 11 payee's account from the proceeds of a transfer.
4 12 21. "Transferee" means a party acquiring or proposing to
4 13 acquire structured settlement payment rights through a
4 14 transfer.
4 15 Sec. 3. NEW SECTION. 682.3 REQUIRED DISCLOSURES TO
4 16 PAYEE.
4 17 Not less than three days prior to the date on which a payee
4 18 signs a transfer agreement, the transferee shall provide to
4 19 the payee a separate disclosure statement, in bold type no
4 20 smaller than fourteen points, setting forth all of the
4 21 following:
4 22 1. The amounts and due dates of the structured settlement
4 23 payments to be transferred.
4 24 2. The aggregate amount of the structured settlement
4 25 payments.
4 26 3. The discounted present value of the payments to be
4 27 transferred which shall be identified as the "calculation of
4 28 current value of the transferred structured settlement
4 29 payments under federal standards for valuing annuities", and
4 30 the amount of the applicable federal rate used in calculating
4 31 the discounted present value.
4 32 4. The gross advance amount.
4 33 5. An itemized listing of all applicable transfer
4 34 expenses, other than attorney fees and related disbursements
4 35 payable in connection with the transferee's application for
5 1 approval of the transfer, and the transferee's best estimate
5 2 of the amount of any such fees and disbursements.
5 3 6. The net advance amount.
5 4 7. The amount of any penalties or liquidated damages
5 5 payable by the payee in the event of any breach of the
5 6 transfer agreement by the payee.
5 7 8. A statement that the payee has the right to cancel the
5 8 transfer agreement, without penalty or further obligation, not
5 9 later than the third business day after the agreement is
5 10 signed by the payee.
5 11 Sec. 4. NEW SECTION. 682.4 APPROVAL OF TRANSFERS OF
5 12 STRUCTURED SETTLEMENT PAYMENT RIGHTS.
5 13 1. A transfer of structured settlement payment rights
5 14 shall not be effective and a structured settlement obligor or
5 15 annuity issuer shall not be required to make any payment
5 16 directly or indirectly to a transferee of structured
5 17 settlement payment rights unless the transfer has been
5 18 approved in advance in a final court order or order of a
5 19 responsible administrative authority based on express findings
5 20 by such court or responsible administrative authority
5 21 regarding all of the following:
5 22 a. The transfer is in the best interest of the payee,
5 23 taking into account the welfare and support of the payee's
5 24 dependents.
5 25 b. The payee has been advised in writing by the transferee
5 26 to seek independent professional advice regarding the transfer
5 27 and has either received such advice or knowingly waived such
5 28 advice in writing.
5 29 c. The transfer does not contravene any applicable statute
5 30 or the order of any court or other government authority.
5 31 2. If the structured settlement agreement or transfer
5 32 agreement includes a provision requiring the terms of the
5 33 structured settlement agreement or transfer agreement to
5 34 remain confidential, the court or responsible administrative
5 35 authority shall conduct in camera proceedings relating to the
6 1 approval of the transfer agreement and shall not include any
6 2 financial terms from the structured settlement agreement or
6 3 the transfer agreement in the order required under subsection
6 4 1.
6 5 Sec. 5. NEW SECTION. 682.5 EFFECTS OF TRANSFER OF
6 6 STRUCTURED SETTLEMENT PAYMENT RIGHTS.
6 7 1. The structured settlement obligor and the annuity
6 8 issuer shall, as to all parties except the transferee, be
6 9 discharged and released from any and all liability for the
6 10 transferred payments.
6 11 2. The transferee shall be liable to the structured
6 12 settlement obligor and the annuity issuer for all of the
6 13 following:
6 14 a. If the transfer contravenes the terms of the structured
6 15 settlement, any taxes incurred by the structured settlement
6 16 obligor and the annuity issuer as a consequence of the
6 17 transfer.
6 18 b. Any other liabilities or costs, including reasonable
6 19 costs and attorney fees, arising from compliance by such
6 20 parties with the order of the court or responsible
6 21 administrative authority or arising as a consequence of the
6 22 transferee's failure to comply with this chapter.
6 23 3. An annuity issuer and the structured settlement obligor
6 24 shall not be required to divide any periodic payment between
6 25 the payee and any transferee or assignee or between two or
6 26 more transferees or assignees.
6 27 4. Any further transfer of structured settlement payment
6 28 rights by the payee may be made only after compliance with all
6 29 of the requirements of this chapter.
6 30 Sec. 6. NEW SECTION. 682.6 PROCEDURE FOR APPROVAL OF
6 31 TRANSFERS.
6 32 1. An application under this chapter for approval of a
6 33 transfer of structured settlement payment rights shall be made
6 34 by the transferee and may be brought in the county in which
6 35 the payee resides, in the county in which the structured
7 1 settlement obligor or the annuity issuer maintains its
7 2 principal place of business, or in any court or before any
7 3 responsible administrative authority which approved the
7 4 structured settlement agreement.
7 5 2. Not less than twenty days prior to the scheduled
7 6 hearing on any application for approval of a transfer of
7 7 structured settlement payment rights under section 682.4, the
7 8 transferee shall file with the court or responsible
7 9 administrative authority and serve on all interested parties a
7 10 notice of the proposed transfer and the application for its
7 11 authorization. All of the following shall be included with
7 12 the notice:
7 13 a. A copy of the transferee's application.
7 14 b. A copy of the transfer agreement.
7 15 c. A copy of the disclosure statement required under
7 16 section 682.3.
7 17 d. A listing of each of the payee's dependents, together
7 18 with each dependent's age.
7 19 e. Notification that any interested party is entitled to
7 20 support, oppose, or otherwise respond to the transferee's
7 21 application, either in person or by counsel, by submitting
7 22 written comments to the court or responsible administrative
7 23 authority, or by participating in the hearing.
7 24 f. Notification of the time and place of the hearing and
7 25 notification of the manner in which and the time by which
7 26 written responses to the application must be filed, which
7 27 shall not be less than fifteen days after service of the
7 28 transferee's notice, in order to be considered by the court or
7 29 responsible administrative authority.
7 30 3. If a structured settlement agreement or transfer
7 31 agreement includes a provision requiring the terms of the
7 32 structured settlement agreement or transfer agreement to
7 33 remain confidential, the financial terms of the structured
7 34 settlement agreement and the transfer agreement shall be made
7 35 available to the court or responsible administrative authority
8 1 for purposes of any in camera proceedings, but shall not be
8 2 disclosed in the copies of the transfer agreement and
8 3 disclosure statement filed as a part of the public record.
8 4 Sec. 7. NEW SECTION. 682.7 GENERAL PROVISIONS –
8 5 CONSTRUCTION – PENALTIES.
8 6 1. The provisions of this chapter shall not be waived by a
8 7 payee.
8 8 2. A transfer agreement entered into on or after the
8 9 thirtieth day after the effective date of this Act by a payee
8 10 who resides in this state shall provide that disputes under
8 11 the transfer agreement, including any claim that the payee has
8 12 breached the agreement, shall be determined under the laws of
8 13 this state. A transfer agreement shall not authorize the
8 14 transferee or any other party to confess judgment or consent
8 15 to entry of judgment against the payee.
8 16 3. A transfer of structured settlement payment rights
8 17 shall not extend to any payments that are life-contingent
8 18 unless, prior to the date on which the payee signs the
8 19 transfer agreement, the transferee has established and has
8 20 agreed to maintain procedures reasonably satisfactory to the
8 21 annuity issuer and the structured settlement obligor for both
8 22 of the following:
8 23 a. Periodically confirming the payee's survival.
8 24 b. Giving the annuity issuer and the structured settlement
8 25 obligor prompt written notice in the event of the payee's
8 26 death.
8 27 4. A payee who proposes to make a transfer of structured
8 28 settlement payment rights shall not incur any penalty, forfeit
8 29 any application fee or other payment, or otherwise incur any
8 30 liability to the proposed transferee or any assignee based on
8 31 any failure of the transfer to satisfy the conditions of this
8 32 chapter.
8 33 5. This chapter shall not be construed to authorize any
8 34 transfer of structured settlement payment rights in
8 35 contravention of any law or to imply that any transfer under a
9 1 transfer agreement entered into prior to the effective date of
9 2 this Act is valid or invalid.
9 3 6. Compliance with the requirements set forth in section
9 4 682.3 and fulfillment of the conditions set forth in section
9 5 682.4 shall be solely the responsibility of the transferee in
9 6 any transfer of structured settlement payment rights, and
9 7 neither the structured settlement obligor nor the annuity
9 8 issuer shall bear any responsibility for, or any liability
9 9 arising from, noncompliance with the requirements or failure
9 10 to fulfill the conditions.
9 11 Sec. 8. APPLICABILITY DATE. This Act shall apply to any
9 12 transfer of structured settlement payment rights under a
9 13 transfer agreement entered into on or after the thirtieth day
9 14 after the effective date of this Act. Nothing contained in
9 15 this Act shall imply that any transfer under a transfer
9 16 agreement reached prior to the thirtieth day after the
9 17 effective date of this Act is effective.
9 18
9 19
9 20
9 21 MARY E. KRAMER
9 22 President of the Senate
9 23
9 24
9 25
9 26 BRENT SIEGRIST
9 27 Speaker of the House
9 28
9 29 I hereby certify that this bill originated in the Senate and
9 30 is known as Senate File 337, Seventy-ninth General Assembly.
9 31
9 32
9 33
9 34 MICHAEL E. MARSHALL
9 35 Secretary of the Senate
10 1 Approved , 2001
10 2
10 3
10 4
10 5 THOMAS J. VILSACK
10 6 Governor
Text: SF00336 Text: SF00338 Text: SF00300 - SF00399 Text: SF Index Bills and Amendments: General Index Bill History: General Index
© 2001 Cornell College and League of Women Voters of Iowa
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