Senate Judiciary Committee Amendment
S 259 - Session 125 (2023-2024)
Structured Settlement Payments

The Committee on Judiciary proposes the following amendment (SJ-259.SW0010S):

Amend the bill, as and if amended, SECTION 1, by striking Section 15-50-20(12)(16) and inserting:

(12)(16) "Structured settlement" means an arrangement for periodic payment of damages for personal injuries or sickness established by settlement or judgment in resolution of a tort claim. Notwithstanding another provision of law, a structured settlement is not a consumer loan or otherwise subject to Title 37.

Amend the bill further, SECTION 1, by striking Section 15-50-20(16) and inserting:

(16) (22) "Terms of the structured settlement" include the terms of the structured settlement agreement, the annuity contract, a qualified assignment agreement, and an order or other approval of a court that approved a structured settlement agreement.

Amend the bill further, SECTION 3, by striking Section 15-50-30(10) and inserting:

(10) that the payee has the right to seek and receive independent professional advice regarding the proposed transfer and should consider doing so before agreeing to the transfer of any structured settlement payment rights. The notice must also contain: "It is prohibited for us to refer you to a specific independent professional adviser. We may refer you to a state or local referral service, bar association, legal aid, or any other entity unrelated to us which assists people with locating independent professional advice, if requested"; and

Amend the bill further, SECTION 4, by striking Section 15-50-40(B) and (C) and inserting:

(B) In determining whether a proposed transfer is in the best interests of the payee pursuant to (A)(1), the courts must take into consideration the welfare and support of the payee and the payee's dependents, if any. The court must also consider,

(1) the reasonable preference of the payee, in light of the payee's age, mental capacity, maturity level, understanding of the terms of the agreement, and stated purpose for the transfer;

(2) if the periodic payments were intended to cover future income or losses or future medical expenses, whether the payee has means of support aside from the structured settlement to meet these obligations;

(3) whether the payee can meet the financial needs of, and obligations to, the payee's dependents if the transfer is allowed to proceed, including child support and spousal maintenance;

(4) whether the payee completed previous transactions involving the payee's structured settlement payment rights, and the timing, amount, stated purpose, and actual use of the proceeds;

(5) the impact of the proposed transfer on current or future eligibility of the payee or the payee's dependents for public benefits; and

(6) any other factors or facts the court determines to be relevant.

(C) No direct or indirect transfer of a payee's structured settlement payment rights by a payee's conservator, if a conservator has been appointed, shall be effective and no structured settlement obligor or annuity issuer shall be required to make a payment directly or indirectly to a transferee or assignee of structured settlement payment rights unless, in addition to the findings required under this section, the court also finds that the proceeds of the proposed transfer would be applied solely for the benefit of the payee.

(D) No direct or indirect transfer of a minor's structured settlement payment rights by a parent, conservator, or guardian shall be effective and no structured settlement obligor or annuity issuer shall be required to make a payment directly or indirectly to a transferee or assignee of structured settlement payment rights unless, in addition to the findings required under this section, the court also finds that:

(1) the proceeds of the proposed transfer would be applied solely for support, care, education, health, and welfare of the minor payee; and

(2) any excess proceeds would be preserved for the future support, care, education, health, and welfare of the minor payee and transferred to the minor payee upon emancipation.

(E) The final court order must expressly state that the best interest factors enumerated in subsection (B) have been considered, and if the court approves the transfer of payment rights, the order must state that the court finds that it is in the best interest of the payee to approve the transfer.

Amend the bill further, SECTION 5, by striking Section 15-50-50(1) and inserting:

(1) the structured settlement obligor and the annuity issuer , may rely on the court order approving the transfer in redirecting periodic payments to an assignee or transferee in accordance with the order approving the transfer and shall, as to all parties except the transferee, are or an assignee designated by the transferee, be discharged and released from liability for the transferred redirected payments; and. Such discharge and release shall not be affected by the failure of any party to the transfer to comply with this chapter or with the court order approving the transfer.

Amend the bill further, SECTION 5, by striking Section 15-50-50(2)(b) and inserting:

(b) for other liabilities or costs, including reasonable costs and attorney's fees, arising from compliance by the parties with the requirements of this chapter, with the order of the court, or for costs arising as a consequence of the transferee's failure to comply with this chapter;

Amend the bill further, SECTION 6, by striking Section 15-50-60(A) and inserting:

(A) An application pursuant to this chapter for approval of a transfer of structured settlement payment rights may be made by the transferee and maymust be brought in a court of competent jurisdiction, including the probate court if the transferee is a minor or the original settlement was approved by the probate court, the circuit court in the county in which the payee resides, in the county in which the structured settlement obligor or the annuity issuer maintains its principal place of business, or . If the payee is not a resident of this State the application must be brought in any the circuit court in the county in which approved the structured settlement agreement was approved.

Amend the bill further, SECTION 7, by striking Section 15-50-70(B) and inserting:

(B) A transfer agreement entered into on or after the effective date of this chapter by a payee who resides in this State must provide that disputes under the transfer agreement, including a claim that the payee has breached the agreement, must be determined pursuant to the laws of this State. A transfer agreement may shall not authorize the transferee or another party to confess judgment or consent to entry of judgment against the payee.

Amend the bill further, SECTION 8, by striking Section 15-50-80(A), (B), and (C) and inserting:

(A) The court may appoint an attorney to serve as a guardian ad litem, to make an independent assessment, and to advise the court whether the proposed transfer is in the best interest of the payee, taking into consideration the factors enumerated in Section 15-50-40(B). The guardian ad litem may consult with a certified public accountant, actuary, or other licensed professional for independent professional advice, if necessary. All costs and reasonable fees for the guardian ad litem shall be borne by the transferee in an amount determined by the court.

(B) The court must appoint an attorney to serve as a guardian ad litem in any case involving:

(1) a proposed transfer of a minor's structured settlement payments rights by a conservator or by a parent or guardian if a conservator has not been appointed. The guardian ad litem must advise the court on whether the proposed transfer is of direct benefit to the minor; or

(2) a proposed transfer of structured settlement payment rights involving a payee who appears to the court to suffer from a mental or cognitive impairment.

(C) The transferee must file a motion for the appointment of an attorney to serve as a guardian ad litem prior to a hearing on the proposed transfer if the transferee is aware that:

(1) the underlying structured settlement arose from a case in which a finding was made in a court record of a mental or cognitive impairment on the part of the payee;

(2) a conservator or guardian has been appointed for the payee; or

(3) a finding has been made in a court record, other than that of the underlying structured settlement case, of a mental or cognitive impairment on the part of the payee.

Amend the bill further, SECTION 8, by striking Section 15-50-80(E) and inserting:

(E) An attorney appointed to serve as a guardian ad litem by the court must report to the court the guardian ad litem's assessment and advice at a time determined by the court.