1999 NH S.B. 66

THE STATE OF NEW HAMPSHIRE

BILL TEXT

STATENET

1999 NH S.B. 66

NEW HAMPSHIRE FIRST YEAR OF THE 156TH SESSION OF THE GENERAL COURT

SENATE BILL 66

1999 SESSION

BILL TRACKING REPORT: <=1> 1999 Bill Tracking NH S.B. 66

1999 Bill Text NH S.B. 66

VERSION: Introduced

VERSION-DATE: February 4, 1999

SYNOPSIS:

AN ACT relative to structured settlements.

SPONSORS: Sen. McCarley, Dist 6

COMMITTEE: Judiciary

ANALYSIS

This bill establishes requirements for structured settlements of personal injury claims and agreements to transfer structured settlement payment rights. The requirements include disclosure, right of cancellation, and court approval.

STATE OF NEW HAMPSHIRE

In the Year of Our Lord One Thousand Nine Hundred and Ninety-Nine

AN ACT relative to structured settlements.

TEXT: Be it Enacted by the Senate and House of Representatives in General Court convened:

1 New Chapter; Structured Settlements. Amend RSA by inserting after chapter 543 the following new chapter:

CHAPTER 543-A

STRUCTURED SETTLEMENTS

543-A:1 Definitions. In this chapter:

I. 'Annuity issuer' means a person that has issued an annuity contract to fund periodic payments due under a structured settlement.

II. 'Interested parties' means the payee, any beneficiary irrevocably designated in the structured settlement agreement to receive payments following the payee's death, the annuity issuer, and the structured settlement obligor.

III. 'Payee' means any person entitled to receive periodic payments from an annuity issuer or structured settlement obligor as the result of a structured settlement. 'Payee' does not mean a transferee or other person entitled to receive structured settlement payments as a result of a transfer.

IV. 'Structured settlement' means an arrangement whereby a person agrees to make future periodic payments to a payee in settlement of a tort claim for personal injuries.

V. 'Structured settlement obligor' means a party that has the continuing obligation to make future periodic payments under a structured settlement or under an agreement providing for a qualified assignment as defined by 26 U.S.C section 130.

VI. 'Structured settlement payment rights' means the right to receive periodic payments, including lump sum payments, under a structured settlement from a structured settlement obligor or annuity issuer.

VII. 'Third party' means any person other than a payee, structured settlement obligor, or annuity issuer.

VIII. 'Transfer' means any sale, assignment, or other conveyance of structured settlement payment rights to a third party for consideration.

IX. 'Transfer agreement' means an agreement providing for the transfer of structured settlement payment rights from a payee to a transferee.

X. 'Transferee' means any person that becomes entitled to receive structured settlement payments as a result of a transfer.

543-A:2 Requirements. A structured settlement or transfer agreement shall meet the following conditions in order to become effective:

I. Prior to or contemporaneous with the execution of structured settlement or transfer agreement, the structured settlement obligor or the transferee shall provide the payee with a disclosure statement. The disclosure statement shall be in at least 14 point bold-face type, and shall set forth:

(a) The amounts and due dates of all payments to be paid under the structured settlement or to be transferred under the transfer agreement.

(b) The aggregate amount of all payments to be paid under the structured settlement or to be transferred under the transfer agreement.

(c) The discounted present value of all payments to be paid under the structured settlement or to be transferred under the transfer agreement.

(d) The discount rate used to determine the discounted present value required by subparagraph (c).

(e) The gross amount payable to the structured settlement obligor and the annuity issuer in return for their agreement to make the periodic payments due under the structured settlement or, in the case of a transfer agreement, the gross amount payable to the payee in exchange for the structured settlement payments to be transferred.

(f)(1) In the case of a structured settlement, a good faith estimate of all commissions, fees, rebates, charges, costs, and expenses paid to, by, or on behalf of the structured settlement obligor, the annuity issuer, any broker, or any attorney in connection with the structured settlement.

(2) In the case of a transfer agreement, a good faith estimate of the net amount payable to the payee after the deduction of all commissions, fees, costs, expenses, and charges paid to, by, or on behalf of the payee and the transferee, or deductible from the gross amount otherwise payable to the payee in connection with the transfer.

II. The payee shall be represented by independent legal counsel in connection with the structured settlement or transfer agreement.

III. In the case of a transfer, the payee or the transferee shall provide to all interested parties at least 14 days prior to the anticipated closing date of the transfer:

(a) Written notice of the transfer, including the anticipated date;

(b) A copy of the disclosure statement required by paragraph I; and

(c) The name, address, and taxpayer identification number of the transferee.

543-A:3 Right of Cancellation. Any payee who enters into a structured settlement or transfer agreement shall have an absolute right to cancel the structured settlement or transfer agreement within 5 days of its execution. The payee shall not be subject to any penalty as a result of such cancellation.

543-A:4 Court Approval of Certain Transfer Agreements.

I. If a structured settlement was originally approved by a court, a transfer of all or any portion of the structured settlement payments shall be approved by a court of competent jurisdiction. The court shall approve the transfer if the court finds that:

(a) The transfer complies with the requirements of this chapter;

(b) The transferee has filed a copy of the disclosure statement required by RSA 543-A:2, I with the court; and

(c) The transfer is in the best interest of the payee.

II. Any interested party, after proper notice and an opportunity to object, shall be bound by a court's approval of a transfer agreement. Such party shall comply with the transfer agreement, irrespective of any provision in the structured settlement restricting the right of the payee to assign the payee's rights.

III. Any payee intending to engage in a transfer that is not required to be submitted for court approval pursuant to paragraph I may elect court review by filing a petition for court approval. Upon the filing of such petition, the agreement shall be deemed subject to the requirements of this section.

IV. Any court proceeding pursuant to this section, so far as possible, shall be treated as a summary proceeding and shall be given preferred scheduling on the docket. Upon request of the payee, a court proceeding may be referred to a master. The master may conduct hearings on the requested transfer by telephone. The master shall report all findings to the court within 5 days of the hearing. The court shall review and approve the master's report if it is supported by the evidence at the hearing. The court may impose a reasonable charge on the payee for the services of the master.

V. An interested party shall have no liability to the payee or to any other party to the structured settlement in connection with payments made to a transferee in accordance with a court order or, in the case of a transfer agreement not requiring court approval, pursuant to a properly notarized transfer agreement.

543-A:5 Applicability.

I. The provisions of this chapter shall not apply to any structured settlement or transfer agreement executed before the effective date of this chapter.

II. The provisions of this chapter may not be waived.

2 Effective Date. This act shall take effect January 1, 2000.

SPONSOR:

McCarley

LOAD-DATE: February 6, 1999