VIRGINIA 1999 SESSION

HOUSE BILL 2538

HOUSE BILL NO. 2538

OFFERED JANUARY 21, 1999

VERSION: Introduced

VERSION-DATE: January 21, 1999

SYNOPSIS:

A BILL to amend the Code of Virginia by adding in Chapter 41 of Title 59.1 sections numbered 59.1-475 through 59.1-478, relating to the purchase and sale of rights to receive payment pursuant to a structured settlement.

Patron-- Croshaw

Referred to Committee on Corporations, Insurance and Banking

NOTICE:

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

TEXT: Be it enacted by the General Assembly of Virginia:

1. That the Code of Virginia is amended by adding in Chapter 41 of Title 59.1 sections numbered 59.1-475 through 59.1-478 as follows:

[A> CHAPTER 41. <A]

[A> PURCHASE AND SALE OF STRUCTURED SETTLEMENT PAYMENTS. <A]

[A> SECTION 59.1- 475. DEFINITIONS. <A]

[A> AS USED IN THIS CHAPTER: <A]

[A> "ANNUITY ISSUER" MEANS ANY PARTY THAT HAS ISSUED AN ANNUITY AS DEFINED IN SECTION 38.2-106 TO FUND PERIODIC PAYMENTS DUE UNDER A STRUCTURED SETTLEMENT. <A]

[A> "INTERESTED PARTIES" MEANS, WITH RESPECT TO ANY STRUCTURED SETTLEMENT, 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. <A]

[A> "PAYEE" MEANS ANY PERSON ENTITLED TO RECEIVE PERIODIC PAYMENTS FROM AN ANNUITY ISSUER OR SETTLEMENT OBLIGOR AS THE RESULT OF A STRUCTURED SETTLEMENT. HOWEVER, PAYEE DOES NOT MEAN A TRANSFEREE OR OTHER PERSON ENTITLED TO RECEIVE STRUCTURED SETTLEMENT PAYMENTS AS A RESULT OF A TRANSFER. <A]

[A> "STRUCTURED SETTLEMENT" MEANS AN ARRANGEMENT WHEREBY A SETTLEMENT OBLIGOR, AN ANNUITY ISSUER, OR OTHER PERSON AGREES TO MAKE FUTURE PERIODIC PAYMENTS TO A PAYEE IN SETTLEMENT OF A TORT CLAIM FOR PERSONAL INJURIES OR IN SETTLEMENT OF A WORKERS COMPENSATION CLAIM. <A]

[A> "STRUCTURED SETTLEMENT OBLIGOR" MEANS A PARTY THAT HAS THE CONTINUING OBLIGATION TO MAKE FUTURE PERIODIC PAYMENTS UNDER A STRUCTURED SETTLEMENT AGREEMENT OR UNDER AN AGREEMENT PROVIDING FOR A QUALIFIED ASSIGNMENT WITHIN THE MEANING OF SECTION 130 OF THE INTERNAL REVENUE CODE OF 1986. <A]

[A> "STRUCTURED SETTLEMENT PAYMENT RIGHTS" MEANS THE RIGHT TO RECEIVE PERIODIC PAYMENTS, INCLUDING LUMP SUM PAYMENTS, UNDER A STRUCTURED SETTLEMENT FROM A SETTLEMENT OBLIGOR, ANNUITY ISSUER, OR OTHER PERSON. <A]

[A> "TRANSFER" MEANS ANY SALE, ASSIGNMENT, OR OTHER CONVEYANCE OF STRUCTURED SETTLEMENT PAYMENT RIGHTS BY A PAYEE FOR CONSIDERATION. <A]

[A> "TRANSFER AGREEMENT" MEANS AN AGREEMENT PROVIDING FOR THE TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS FROM A PAYEE TO A TRANSFEREE. <A]

[A> "TRANSFEREE" MEANS ANY PERSON THAT BECOMES ENTITLED TO RECEIVE STRUCTURED SETTLEMENT PAYMENTS AS A RESULT OF A TRANSFER. <A]

[A> SECTION 59.1-476. REQUIREMENTS FOR A STRUCTURED SETTLEMENT OR TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS. <A]

[A> IN ORDER FOR ANY STRUCTURED SETTLEMENT AGREEMENT OR ANY TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS TO BE ENFORCEABLE, EACH OF THE FOLLOWING CONDITIONS MUST BE SATISFIED: <A]

[A> 1. PRIOR TO OR CONTEMPORANEOUS WITH THE EXECUTION OF THE STRUCTURED SETTLEMENT AGREEMENT OR, IN THE CASE OF A TRANSFER, PRIOR TO OR CONTEMPORANEOUS WITH THE EXECUTION OF A TRANSFER AGREEMENT, THE ANNUITY ISSUER OR THE TRANSFEREE, AS THE CASE MAY BE, SHALL PROVIDE THE PAYEE WITH A DISCLOSURE STATEMENT, IN BOLD TYPE, NO SMALLER THAN 14 POINT, SETTING FORTH: <A]

[A> A. THE AMOUNTS AND DUE DATES OF ALL PAYMENTS DUE UNDER THE STRUCTURED SETTLEMENT OR, IN THE CASE OF A TRANSFER, THE AMOUNT AND DUE DATES OF ALL STRUCTURED SETTLEMENT PAYMENTS TO BE TRANSFERRED; <A]

[A> B. THE AGGREGATE AMOUNT OF ALL PAYMENTS DUE UNDER THE STRUCTURED SETTLEMENT OR, IN THE CASE OF A TRANSFER, THE AGGREGATE AMOUNT OF ALL STRUCTURED SETTLEMENT PAYMENTS TO BE TRANSFERRED; <A]

[A> C. THE DISCOUNTED PRESENT VALUE OF ALL PAYMENTS DUE UNDER THE STRUCTURED SETTLEMENT OR, IN THE CASE OF A TRANSFER, THE DISCOUNTED PRESENT VALUE OF ALL STRUCTURED SETTLEMENT PAYMENTS TO BE TRANSFERRED; <A]

[A> D. THE DISCOUNT RATE USED IN CALCULATING THE PRESENT VALUE AMOUNTS REQUIRED TO BE STATED BY ITEM C; AND <A]

[A> E. THE GROSS AMOUNT PAYABLE TO THE 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, THE GROSS AMOUNT PAYABLE TO THE PAYEE IN EXCHANGE FOR THE STRUCTURED SETTLEMENT PAYMENTS TO BE TRANSFERRED; <A]

[A> F. A GOOD FAITH ESTIMATE OF THE FOLLOWING: <A]

[A> (1) IN THE CASE OF A STRUCTURED SETTLEMENT, ALL COMMISSIONS, FEES, REBATES, SERVICE CHARGES, APPLICATION FEES, PROCESSING FEES, CLOSING COSTS, FILING FEES, ADMINISTRATIVE CHARGES, AND OTHER COSTS, EXPENSES OR CHARGES PAID TO, BY OR ON BEHALF OF THE SETTLEMENT OBLIGOR, THE ANNUITY ISSUER, ANY BROKER OR ATTORNEY IN CONNECTION WITH THE STRUCTURED SETTLEMENT, AND; <A]

[A> (2) IN THE CASE OF A TRANSFER, (I) ALL COMMISSIONS, FEES, REBATES, SERVICE CHARGES, APPLICATION FEES, PROCESSING FEES, CLOSING COSTS, FILING FEES, ADMINISTRATIVE CHARGES, AND OTHER COSTS, EXPENSES OR 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, AND (II) THE NET AMOUNT PAYABLE TO THE PAYEE AFTER THE DEDUCTION OF ALL OF THE FOREGOING COMMISSIONS, FEES, COSTS, EXPENSES OR CHARGES; <A]

[A> 2. THE PAYEE IS REPRESENTED BY INDEPENDENT LEGAL COUNSEL IN CONNECTION WITH THE STRUCTURED SETTLEMENT OR TRANSFER; AND <A]

[A> 3. IN THE CASE OF A TRANSFER, THE TRANSFEREE HAS PROVIDED WRITTEN NOTICE OF THE TRANSFER, INCLUDING THE ANTICIPATED CLOSING DATE, A COPY OF THE DISCLOSURE STATEMENT REQUIRED BY SUBDIVISION 1, AND THE TRANSFEREE'S NAME, BUSINESS ADDRESS AND TAXPAYER IDENTIFICATION NUMBER TO ALL INTERESTED PARTIES AT LEAST FOURTEEN DAYS PRIOR TO THE ANTICIPATED CLOSING DATE OF THE TRANSFER. <A]

[A> SECTION 59.1-477. RIGHT OF RESCISSION. <A]

[A> A PAYEE WHO ENTERS INTO A STRUCTURED SETTLEMENT OR STRUCTURED SETTLEMENT TRANSFER AGREEMENT SHALL HAVE AN ABSOLUTE, IRREVOCABLE, AND NONWAIVABLE FIVE-DAY RIGHT OF RESCISSION. DURING SAID FIVE-DAY RESCISSION PERIOD, THE PAYEE MAY RESCIND AND CANCEL THE STRUCTURED SETTLEMENT OR THE STRUCTURED SETTLEMENT TRANSFER AGREEMENT WITHOUT PENALTY OR FURTHER OBLIGATION. <A]

[A> SECTION 59.1-478. REQUIREMENT FOR COURT APPROVAL FOR CERTAIN STRUCTURED SETTLEMENT TRANSFERS. <A]

[A> A. A TRANSFER OF ALL OR ANY PORTION OF THE STRUCTURED SETTLEMENT PAYMENT RIGHTS DUE UNDER A STRUCTURED SETTLEMENT THAT WAS APPROVED BY A COURT OR OTHER TRIBUNAL SHALL FIRST BE APPROVED BY A COURT OF COMPETENT JURISDICTION. THE TRANSFER SHALL BE APPROVED AND SHALL BE EFFECTIVE IF THE COURT OR TRIBUNAL FINDS: <A]

[A> 1. THE TRANSFER COMPLIES WITH THE REQUIREMENTS OF THIS CHAPTER; <A]

[A> 2. THE TRANSFEREE HAS PROVIDED TO THE PAYEE THE DISCLOSURE STATEMENT REQUIRED BY SUBDIVISION 1 OF SECTION 59.1-476 AND HAS FILED A COPY OF SUCH DISCLOSURE WITH THE COURT OR TRIBUNAL; <A]

[A> 3. THE TRANSFER IS IN THE BEST INTEREST OF THE PAYEE; <A]

[A> 4. THE PAYEE HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL IN CONNECTION WITH THE TRANSFER; AND <A]

[A> 5. THE TRANSFEREE HAS GIVEN THE NOTICES REQUIRED BY SUBDIVISION 3 OF SECTION 59.1-476. <A]

[A> B. WHENEVER APPROVAL IS REQUIRED UNDER THE PROVISIONS OF SUBSECTION A, THE COURT OR TRIBUNAL WHICH APPROVED THE STRUCTURED SETTLEMENT OR, IF THE PAYEE NO LONGER RESIDES WITHIN THE JURISDICTION OF THE COURT OR TRIBUNAL WHICH APPROVED THE STRUCTURED SETTLEMENT, THE CIRCUIT COURT FOR THE JURISDICTION WHEREIN THE PAYEE CURRENTLY RESIDES SHALL BE APPROPRIATE VENUE FOR FILING ANY SUBSEQUENT PROCEEDING REQUIRED UNDER THIS SECTION. <A]

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