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23rd Legislature(2003-2004)

Bill Text 23rd Legislature

00                       CS FOR HOUSE BILL NO. 64(JUD)                                                                     
01 "An Act relating to court approval of the purchase of structured settlements."                                          
02 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
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.                                                   
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