Sell My Structured Settlement in Arkansas
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Arkansas Law for Selling a Structured Settlement
Enacted: April 13, 2005 Effective: August 12, 2005
SECTION 1. Arkansas Code Title 23, Chapter 81, is amended to add an
additional subchapter to read as follows:
23-81-701. Title.
This subchapter shall be known and may be cited as the "Structured
Settlement Protection Act".
23-81-702. Definitions.
As used in this subchapter:
(1) “Annuity issuer” means an insurer that has issued a contract
to fund periodic payments under a structured settlement;
(2) “Dependents” includes a payee’s spouse and minor children and
all other persons for whom the payee is legally obligated to
provide support, including alimony;
(3) “Discounted present value” means the present value of future
payments determined by discounting such payments to the
present using the most recently published applicable federal
rate for determining the present value of an annuity, as
issued by the Internal Revenue Service;
(4) “Gross advance amount” means the sum payable to the payee or
for the payee's account as consideration for a transfer of
structured settlement payment rights before any reductions
for transfer expenses or other deductions are made from the
consideration;
(5) “Independent professional advice” means advice of an
attorney, certified public accountant, actuary, or other
licensed professional adviser;
(6) “Interested parties” means, with respect to any structured
settlement, the payee, any beneficiary irrevocably 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 the structured settlement;
(7) “Net advance amount” means the gross advance amount less the
aggregate amount of the actual and estimated transfer expenses
required to be disclosed under § 23-81-703(5);
(8) “Payee” means an individual who is receiving tax free
payments under a structured settlement and proposes to make a
transfer of payment rights under the structured settlement;
(9) “Periodic payments” includes both recurring payments and
scheduled future lump sum payments;
(10) “Qualified assignment agreement” means an agreement providing
for a qualified assignment within the meaning of Section 130 of
the Internal Revenue Code of 1986, as in existence on January 1,
2005;
(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
the structured settlement;
(12) “Settled claim” means the original tort claim or workers’
compensation claim resolved by a structured settlement;
(13) “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 or for
periodic payments in settlement of a workers’ compensation claim;
(14) “Structured settlement agreement” means the agreement,
judgment, stipulation, or release embodying the terms of a
structured settlement;
(15) “Structured settlement obligor” means, with respect to any
structured settlement, the party that has the continuing
obligation to make periodic payments to the payee under a
structured settlement agreement or a qualified assignment
agreement;
(16) “Structured settlement payment rights” means rights to receive
periodic payments under a structured settlement, whether from
the structured settlement obligor or the annuity issuer, when:
(A) The payee is domiciled in, or the domicile or principal
place of business of the structured settlement obligor or
the annuity issuer is located in, this state;
(B) The structured settlement agreement was approved by a court
or responsible administrative authority in this state; or
(C) The structured settlement agreement is expressly governed
by the laws of this state;
(17) “Terms of the structured settlement” includes, with respect to any
structured settlement, the terms of the structured settlement
agreement, the annuity contract, any qualified assignment agreement,
and any order or other approval of any court or responsible
administrative authority or other government authority that
authorized or approved the structured settlement;
(18) (A) “Transfer” means any sale, assignment, pledge, hypothecation, or
other alienation or encumbrance of structured settlement payment
rights made by a payee for consideration.
(B) However, “transfer” does not include the creation or perfection
of a security interest in structured settlement payment rights
under a blanket security agreement entered into with an insured
depository institution, in the absence of any action to redirect
the structured settlement payments to the insured depository
institution or an agent or successor in interest, or otherwise
to enforce the blanket security interest against the structured
settlement payment rights;
(19) “Transfer agreement” means the agreement providing for a transfer
of structured settlement payment rights;
(20) (A) “Transfer expenses” means all expenses of a transfer that are
required under the transfer agreement to be paid by the payee or
deducted from the gross advance amount, including, without
limitation, court filing fees, attorney’s fees, escrow fees,
lien recordation fees, judgment and lien search fees, finders’
fees, commissions, and other payments to a broker or other
intermediary.
(B) “Transfer expenses” does not include preexisting obligations of
the payee payable for the payee’s account from the proceeds of a
transfer; and
(21) “Transferee” means a party acquiring or proposing to acquire
structured settlement payment rights through a transfer.
23-81-703. Required disclosures to payee.
Not less than three (3) days prior to the date on which a payee signs a transfer
agreement, the transferee shall provide to the payee a separate disclosure
statement in bold type no smaller than fourteen (14) points, setting forth:
(1) The amounts and due dates of the structured settlement payments to be
transferred;
(2) The aggregate amount of the payments;
(3) The discounted present value of the payments to be transferred, which
shall be identified as the "calculation of current value of the
transferred structured settlement payments under federal standards for
valuing annuities", and the amount of the applicable federal rate used
in calculating the discounted present value;
(4) The gross advance amount;
(5) An itemized listing of all applicable transfer expenses, other than
attorney’s fees and related disbursements payable in connection with
the transferee’s application for approval of the transfer, and the
transferee’s best estimate of the amount of any such fees and
disbursements;
(6) The net advance amount;
(7) The amount of any penalties or liquidated damages payable by the
payee in the event of any breach of the transfer agreement by the payee;
and
(8) A statement that the payee has the right to cancel the transfer agreement,
without penalty or further obligation, not later than the third business
day after the date the agreement is signed by the payee.
23-81-704. Approval of transfers of structured settlement payment rights.
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 approved in advance in a
final court order or order of a responsible administrative authority based on
express findings by the court or responsible administrative authority that:
(1) The transfer is in the best interest of the payee, taking into account
the welfare and support of the payee's dependents;
(2) The payee has been advised in writing by the transferee to seek
independent professional advice regarding the transfer and has either
received the advice or knowingly waived the advice in writing; and
(3) The transfer does not contravene any applicable statute or the order of
any court or other government authority.
23-81-705. Effects of transfer of structured settlement payment rights.
Following a transfer of structured settlement payment rights under this subchapter:
(1) The structured settlement obligor and the annuity issuer shall be
discharged and released from any and all liability for the transferred
payments as to all parties except the transferee;
(2) The transferee shall be liable to the structured settlement obligor and
the annuity issuer:
(A) If the transfer contravenes the terms of the structured settlement,
for any taxes incurred by such parties as a consequence of the
transfer; and
(B) For any other liabilities or costs, including reasonable costs and
attorney’s fees, arising from compliance by the parties with the
order of the court or responsible administrative authority or
arising as a consequence of the transferee's failure to comply
with this subchapter;
(3) Neither the annuity issuer nor the structured settlement obligor may be
required to divide any periodic payment between the payee and any
transferee or assignee or between two (2) or more transferees or
assignees; and
(4) Any further transfer of structured settlement payment rights by the payee
may be made only after compliance with all of the requirements of this
subchapter.
23-81-706. Procedure for approval of transfers.
(a) An application under this subchapter for approval of a transfer of structured
settlement payment rights shall be made by the transferee and may be brought 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 in any court or before any responsible administrative authority
which approved the structured settlement agreement.
(b) Not less than twenty (20) days prior to the scheduled hearing on any application
for approval of a transfer of structured settlement payment rights under
§ 23-83-704, the transferee shall file with the court or responsible
administrative authority and serve on all interested parties a notice of the
proposed transfer and the application for its authorization, including with the
notice:
(1) A copy of the transferee’s application;
(2) A copy of the transfer agreement;
(3) A copy of the disclosure statement required under § 23-83-703;
(4) A listing of each of the payee's dependents and each dependent's age;
(5) 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
(6) (A) Notification of:
(i) The time and place of the hearing; and
(ii) 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.
(B) The time by which written responses to the application must be
filed shall be not less than twenty (20) days after service of the
transferee’s notice.
23-81-707. General provisions — Construction.
(a) The provisions of this subchapter may not be waived by any payee.
(b) (1) Any transfer agreement entered into on or after the effective date of this
subchapter by a payee who resides in this state shall provide that
disputes under the transfer agreement, including any claim that the payee
has breached the agreement, shall be determined in and under the laws of
the State of Arkansas.
(2) No transfer agreement shall authorize the transferee or any other party to
confess judgment or consent to entry of judgment against the payee.
(c) No transfer of structured settlement payment rights shall extend to any payments
that are life-contingent unless, prior to the date on which the payee signs the
transfer agreement, the transferee has established and has agreed to maintain
procedures reasonably satisfactory to the annuity issuer and the structured
settlement obligor for:
(1) Periodically confirming the payee’s survival; and
(2) Giving the annuity issuer and the structured settlement obligor prompt
written notice in the event of the payee’s death.
(d) 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 or any assignee based
on any failure of the transfer to satisfy the conditions of this subchapter.
(e) Nothing contained in this subchapter shall be construed to authorize any
transfer of structured settlement payment rights in contravention of any law or
to imply that any transfer under a transfer agreement entered into prior to the
effective date of this subchapter is valid or invalid.
(f) Compliance with the requirements set forth in § 23-83-703 and fulfillment of the
conditions set forth in § 23-83-704 shall be solely the responsibility of the
transferee in any transfer of structured settlement payment rights, and neither
the structured settlement obligor nor the annuity issuer shall bear any
responsibility for, or any liability arising from, non- compliance with such
requirements or failure to fulfill such conditions.