NORTH CAROLINA GENERAL ASSEMBLY OF NC - SESSION OF 1999

HOUSE BILL 853

GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1999

H 1

HOUSE BILL 853*

SHORT TITLE: STRUCTURED SETTLEMENT PROTECTION ACT. (PUBLIC)

SPONSORS: REPRESENTATIVE HACKNEY.

REFERRED TO: JUDICIARY I.

APRIL 1, 1999

VERSION: Introduced

VERSION-DATE: April 1, 1999

SYNOPSIS:

A BILL TO BE ENTITLED

AN ACT TO CREATE THE NORTH CAROLINA STRUCTURED SETTLEMENT PROTECTION ACT.

NOTICE:

[A> UPPERCASE TEXT WITHIN THESE SYMBOLS IS ADDED <A]

TEXT: The General Assembly of North Carolina enacts:

Section 1. Chapter 1 of the General Statutes is amended by adding a new Article to read:

" [A> ARTICLE 44B. <A]

[A> "STRUCTURED SETTLEMENT PROTECTION ACT. <A]

[A> "SECTION 1-543.10. TITLE. <A]

[A> THIS ARTICLE MAY BE CITED AS THE NORTH CAROLINA STRUCTURED SETTLEMENT PROTECTION ACT. <A]

[A> "SECTION 1-543.11. STRUCTURED SETTLEMENT PAYMENT RIGHTS. <A]

[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 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: <A]

[A> (1) THE TRANSFER COMPLIES WITH THE REQUIREMENTS OF THIS ARTICLE AND WILL NOT CONTRAVENE OTHER APPLICABLE LAW; <A]

[A> (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]

[A> A. THE AMOUNTS AND DUE DATES OF THE STRUCTURED SETTLEMENT PAYMENTS TO BE TRANSFERRED; <A]

[A> B. THE AGGREGATE AMOUNT OF SUCH PAYMENTS; <A]

[A> C. THE DISCOUNTED PRESENT VALUE OF SUCH PAYMENTS, TOGETHER WITH THE DISCOUNT RATE USED IN DETERMINING SUCH DISCOUNTED PRESENT VALUE; <A]

[A> D. THE GROSS AMOUNT PAYABLE TO THE PAYEE IN EXCHANGE FOR SUCH PAYMENTS; <A]

[A> 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; <A]

[A> 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 PARAGRAPH; <A]

[A> G. THE QUOTIENT (EXPRESSED AS A PERCENTAGE) OBTAINED BY DIVIDING THE NET PAYMENT AMOUNT BY THE DISCOUNTED PRESENT VALUE OF THE PAYMENTS; AND <A]

[A> H. 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; <A]

[A> (3) THE TRANSFEREE HAS ESTABLISHED THAT THE TRANSFER IS NECESSARY TO ENABLE THE PAYEE, THE PAYEE'S DEPENDENTS, OR BOTH, TO AVOID IMMINENT FINANCIAL HARDSHIP, AND THE TRANSFER SHOULD NOT BE EXPECTED TO SUBJECT THE PAYEE, THE PAYEE'S DEPENDENTS, OR BOTH, TO UNDUE FINANCIAL HARDSHIP IN THE FUTURE; PROVIDED, HOWEVER, THAT IF, AT THE TIME THE PAYEE AND THE TRANSFEREE ENTERED INTO THE TRANSFER AGREEMENT, A FEDERAL HARDSHIP STANDARD WAS IN EFFECT, THEN, IN LIEU OF THE FOREGOING FINDING, THE COURT OR RESPONSIBLE ADMINISTRATIVE AUTHORITY MUST MAKE AN EXPRESS FINDING THAT THE TRANSFER QUALIFIES UNDER SUCH FEDERAL HARDSHIP STANDARD; <A]

[A> (4) THE PAYEE HAS RECEIVED INDEPENDENT PROFESSIONAL ADVICE REGARDING THE LEGAL, TAX, AND FINANCIAL IMPLICATIONS OF THE TRANSFER; <A]

[A> (5) IF THE TRANSFER WOULD CONTRAVENE THE TERMS OF THE STRUCTURED SETTLEMENT: <A]

[A> A. THE TRANSFER HAS BEEN EXPRESSLY APPROVED IN WRITING BY: <A]

[A> 1. EACH INTERESTED PARTY; PROVIDED, HOWEVER, THAT IF, AT THE TIME THE PAYEE AND THE TRANSFEREE ENTERED INTO THE TRANSFER AGREEMENT, A FAVORABLE TAX DETERMINATION WAS IN EFFECT, THEN THE APPROVAL OF THE ANNUITY ISSUER AND THE STRUCTURED SETTLEMENT OBLIGOR SHALL NOT BE REQUIRED IF ALL OTHER INTERESTED PARTIES APPROVE THE TRANSFER AND WAIVE ANY AND ALL RIGHTS TO REQUIRE THAT THE TRANSFERRED PAYMENTS BE MADE TO THE PAYEE IN ACCORDANCE WITH THE TERMS OF THE STRUCTURED SETTLEMENT; AND <A]

[A> 2. ANY COURT OR GOVERNMENT AUTHORITY, OTHER THAN THE COURT OR RESPONSIBLE ADMINISTRATIVE AUTHORITY FROM WHICH AUTHORIZATION OF THE TRANSFER IS SOUGHT UNDER THIS ACT, WHICH PREVIOUSLY APPROVED THE STRUCTURED SETTLEMENT; AND <A]

[A> B. SIGNED ORIGINALS OF ALL APPROVALS REQUIRED UNDER SUB-SUBDIVISION A. OF THIS SUBDIVISION HAVE BEEN FILED WITH THE COURT OR RESPONSIBLE ADMINISTRATIVE AUTHORITY FROM WHICH AUTHORIZATION OF THE TRANSFER IS SOUGHT UNDER THIS ACT, AND ORIGINALS OR COPIES HAVE BEEN FURNISHED TO ALL INTERESTED PARTIES; AND <A]

[A> (6) 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; AND <A]

[A> (7) THE DISCOUNT RATE USED IN DETERMINING DISCOUNTED PRESENT VALUE OF THE STRUCTURED SETTLEMENT PAYMENT RIGHTS DOES NOT EXCEED EIGHTEEN PERCENT (18%). <A]

[A> "SECTION 1-543.12. DEFINITIONS . <A]

[A> FOR PURPOSES OF THIS ARTICLE: <A]

[A> (1) 'ANNUITY ISSUER' MEANS AN INSURER THAT HAS ISSUED AN INSURANCE CONTRACT USED TO FUND PERIODIC PAYMENTS UNDER A STRUCTURED SETTLEMENT; <A]

[A> (2) 'APPLICABLE LAW' MEANS: <A]

[A> A. THE FEDERAL LAWS OF THE UNITED STATES; <A]

[A> B. THE LAWS OF THIS STATE, INCLUDING PRINCIPLES OF EQUITY APPLIED IN THE COURTS OF THIS STATE; AND <A]

[A> C. THE LAWS OF ANY OTHER JURISDICTION: <A]

[A> 1. WHICH IS THE DOMICILE OF THE PAYEE OR ANY OTHER INTERESTED PARTY; <A]

[A> 2. UNDER WHOSE LAWS A STRUCTURED SETTLEMENT AGREEMENT WAS APPROVED BY A COURT OR RESPONSIBLE ADMINISTRATIVE AUTHORITY; OR <A]

[A> 3. IN WHOSE COURTS A SETTLED CLAIM WAS PENDING WHEN THE PARTIES ENTERED INTO A STRUCTURED SETTLEMENT AGREEMENT; <A]

[A> (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; <A]

[A> (4) '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; <A]

[A> (5) 'FAVORABLE TAX DETERMINATION' MEANS, WITH RESPECT TO A PROPOSED TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS, ANY OF THE FOLLOWING AUTHORITIES THAT DEFINITELY 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: <A]

[A> A. A PROVISION OF THE INTERNAL REVENUE CODE, UNITED STATES CODE TITLE 26, AS AMENDED FROM TIME TO TIME, OR A UNITED STATES TREASURY REGULATION ADOPTED PURSUANT THERETO; <A]

[A> B. A REVENUE RULING OR REVENUE PROCEDURE ISSUED BY THE INTERNAL REVENUE SERVICE; OR <A]

[A> C. A PRIVATE LETTER RULING BY THE INTERNAL REVENUE SERVICE WITH RESPECT TO SUCH TRANSFER; OR <A]

[A> D. A DECISION OF THE UNITED STATES SUPREME COURT OR A DECISION OF A LOWER FEDERAL COURT IN WHICH THE INTERNAL REVENUE SERVICE HAS ACQUIESCED; <A]

[A> (6) 'FEDERAL HARDSHIP STANDARD' MEANS A FEDERAL STANDARD APPLICABLE TO TRANSFERS OF STRUCTURED SETTLEMENT PAYMENT RIGHTS BASED ON FINDINGS OF A COURT OR RESPONSIBLE ADMINISTRATIVE AUTHORITY REGARDING THE PAYEES' NEEDS, AS CONTAINED IN THE INTERNAL REVENUE CODE, UNITED STATES CODE TITLE 26, AS AMENDED FROM TIME TO TIME, OR IN A UNITED STATES TREASURY REGULATION ADOPTED PURSUANT THERETO; <A]

[A> (7) 'INDEPENDENT PROFESSIONAL ADVICE' MEANS ADVICE OF AN ATTORNEY, CERTIFIED PUBLIC ACCOUNTANT, ACTUARY, OR OTHER LICENSED OR REGISTERED PROFESSIONAL OR FINANCIAL ADVISER: <A]

[A> 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; <A]

[A> B. WHO IS NOT IN ANY MANNER AFFILIATED WITH OR COMPENSATED BY THE TRANSFEREE OF SUCH TRANSFER; AND <A]

[A> C. WHOSE COMPENSATION FOR RENDERING SUCH ADVICE IS NOT AFFECTED BY WHETHER A TRANSFER OCCURS OR DOES NOT OCCUR; <A]

[A> (8) '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 SUCH STRUCTURED SETTLEMENT; <A]

[A> (9) '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; <A]

[A> (10) '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; <A]

[A> (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; <A]

[A> (12) 'SETTLED CLAIM' MEANS THE ORIGINAL TORT CLAIM OR WORKERS' COMPENSATION CLAIM RESOLVED BY A STRUCTURED SETTLEMENT; <A]

[A> (13) 'STRUCTURED SETTLEMENT' MEANS AN ARRANGEMENT FOR PERIODIC PAYMENT OF DAMAGES FOR PERSONAL INJURIES ESTABLISHED BY SETTLEMENT OR JUDGMENT IN RESOLUTION OF A TORT CLAIM OR FOR PERIODIC PAYMENTS IN SETTLEMENT OF A WORKERS' COMPENSATION CLAIM; <A]

[A> (14) '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; <A]

[A> (15) '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; <A]

[A> (16) '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]

[A> A. THE PAYEE IS DOMICILED IN THIS STATE; <A]

[A> B. THE STRUCTURED SETTLEMENT AGREEMENT WAS APPROVED BY A COURT OR RESPONSIBLE ADMINISTRATIVE AUTHORITY IN THIS STATE; OR <A]

[A> C. THE SETTLED CLAIM WAS PENDING BEFORE THE COURTS OF THIS STATE WHEN THE PARTIES ENTERED INTO THE STRUCTURED SETTLEMENT AGREEMENT; <A]

[A> (17) 'TRANSFER' MEANS ANY SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION, OR OTHER FORM OF ALIENATION OR ENCUMBRANCE MADE BY A PAYEE FOR CONSIDERATION; <A]

[A> (18) '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 <A]

[A> (19) 'TRANSFER AGREEMENT' MEANS THE AGREEMENT PROVIDING FOR TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS FROM A PAYEE TO A TRANSFEREE. <A]

[A> "SECTION 1-543.13. JURISDICTION. <A]

[A> (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. <A]

[A> (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. <A]

[A> "SECTION 1-543.14. PROCEDURE FOR APPROVAL OF TRANSFERS. <A]

[A> (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. <A]

[A> (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. <A]

[A> (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, AND ON THE ATTORNEY GENERAL, A NOTICE OF THE PROPOSED TRANSFER AND THE APPLICATION FOR ITS AUTHORIZATION, INCLUDING IN SUCH NOTICE: <A]

[A> (1) A COPY OF THE TRANSFEREE'S APPLICATION; <A]

[A> (2) A COPY OF THE TRANSFER AGREEMENT; <A]

[A> (3) A COPY OF THE DISCLOSURE STATEMENT REQUIRED UNDER G.S. 1-543.11(A); <A]

[A> (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 <A]

[A> (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. <A]

[A> (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. <A]

[A> "SECTION 1-543.15. NO WAIVER; PENALTIES . <A]

[A> (A) THE PROVISIONS OF THIS ARTICLE MAY NOT BE WAIVED. <A]

[A> (B) ANY PAYEE WHO HAS TRANSFERRED STRUCTURED SETTLEMENT PAYMENT RIGHTS TO A TRANSFEREE WITHOUT KNOWLEDGE OF THE REQUIREMENTS SET OUT IN 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, THE PAYEE SHALL BE ENTITLED TO REINSTATEMENT OF ALL STRUCTURED SETTLEMENT PAYMENT RIGHTS LOST AS A RESULT OF VIOLATION OF THIS ARTICLE BY ANY TRANSFEREE. <A]

[A> (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 INCUR ANY LIABILITY TO THE PROPOSED TRANSFEREE BASED ON ANY FAILURE OF SUCH TRANSFER TO SATISFY THE CONDITIONS OF THIS ARTICLE. <A]

[A> "SECTION 1-543.16. CONSTRUCTION. <A]

[A> NOTHING CONTAINED IN THIS ARTICLE 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. <A] "

Section 2. Article 33 of Chapter 1 of the General Statutes is amended by adding a new section to read as follows:

" [A> SECTION 1-394.1. SPECIAL PROCEEDINGS TO DETERMINE AUTHORITY TO TRANSFER STRUCTURED SETTLEMENT PAYMENT RIGHTS. <A]

[A> 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. <A] "

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, but nothing contained in this act shall imply that any transfer under a transfer agreement reached prior to such date is effective.

SPONSOR: