Mississippi Structured Settlements

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. This act shall be known and may be cited as the "Structured

Settlement Protection Act."

SECTION 2. The following words and phrases shall have the meanings ascribed

herein, unless the context clearly indicates otherwise:

(a) "Annuity issuer" means an insurer that has issued a contract to fund

periodic payments under a structured settlement.

(b) "Dependents" include a payee's spouse and minor children and all other

persons for whom the payee is legally obligated to provide support, including

alimony.

(c) "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 United States Internal Revenue Service.

(d) "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

to be made from such consideration.

(e) "Independent professional advice" means advice of an attorney, certified

public accountant, actuary or other licensed professional adviser.

(f) "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 such structured settlement.

(g) "Net advance amount" means the gross advance amount less the aggregate

amount of the actual and estimated transfer expenses required to be disclosed

under Section 3(e) of this act.

(h) "Payee" means an individual who is receiving tax-free payments under a

structured settlement and proposes to make a transfer of payment rights

thereunder.

(i) "Periodic payments" includes both recurring payments and scheduled future

lump-sum payments.

(j) "Qualified assignment agreement" means an agreement providing for a

qualified assignment within the meaning of 26 USCS 130.

(k) "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 such structured settlement.

(l) "Settled claim" means the original tort claim or workers' compensation

claim resolved by a structured settlement.

(m) "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.

(n) "Structured settlement agreement" means the agreement, judgment,

stipulation or release embodying the terms of a structured settlement.

(o) "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.

(p) "Structured settlement payment rights" means rights to receive periodic

payments under a structured settlement, whether from the structured settlement

obligor or the annuity issuer, where:

(i) 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;

(ii) The structured settlement agreement was approved by a court or responsible

administrative authority in this state; or

(iii) The structured settlement agreement is expressly governed by the laws of

this state.

(q) "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 such structured settlement.

(r) " Transfer " means any sale, assignment, pledge, hypothecation or other

alienation or encumbrance of structured settlement payment rights made by a

payee for consideration; provided that the term " 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 such insured depository institution, or an agent or

successor in interest thereof, or otherwise to enforce such blanket security

interest against the structured settlement payment rights.

(s) " Transfer agreement" means the agreement providing for a transfer of

structured settlement payment rights.

(t) " 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,

finder's fees, commissions, and other payments to a broker or other

intermediary; "transfer expenses" do not include preexisting obligations of the

payee payable for the payee's account from the proceeds of a transfer.

(u) "Transferee" means a party acquiring or proposing to acquire structured

settlement payment rights through a transfer.

SECTION 3. Not less than three (3) days before 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:

(a) The amounts and due dates of the structured settlement payments to be

transferred;

(b) The aggregate amount of such payments;

(c) 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 such

discounted present value;

(d) The gross advance amount;

(e) An itemized listing of all applicable transfer expenses, other than

attorney's fees and related disbursement 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;

(f) The net advance amount;

(g) 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

(h) 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.

SECTION 4. 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 such court or responsible

administrative authority that:

(a) The transfer is in the best interest of the payee, taking into account the

welfare and support of the payee's dependents;

(b) The payee has been advised in writing by the transferee to seek independent

professional advice regarding the transfer and has either received such advice

or knowingly waived such advice in writing; and

(c) The transfer does not contravene any applicable statute or the order of any

court or other government authority.

SECTION 5. Following a transfer of structured settlement payment rights under

this act:

(a) The structured settlement obligor and the annuity issuer shall, as to all

parties except the transferee, be discharged and released from any and all

liability for the transferred payments;

(b) The transferee shall be liable to the structured settlement obligor and the

annuity issuer:

(i) If the transfer contravenes the terms of the structured settlement,

for any taxes incurred by such parties as a consequence of the transfer; and

(ii) For any other liabilities or costs, including reasonable costs and

attorney's fees, arising from compliance by such 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 act;

(c) 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

(d) Any further transfer of structured settlement payment rights by the payee

may be made only after compliance with all of the requirements of this act.

SECTION 6. (1) An application under this act 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.

(2) 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 Section 4 of this act, 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 such notice:

(a) A copy of the transferee's application;

(b) A copy of the transfer agreement;

(c) A copy of the disclosure statement required under Section 3 of this act;

(d) A listing of each of the payee's dependents, together with each dependent's

age;

(e) 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

(f) Notification of the time and place of the hearing and notification of the

manner in which and the time by which written responses to the application must

be filed which shall be not less than fifteen (15) days after service of the

transferee's notice in order to be considered by the court or responsible

administrative authority.

SECTION 7. (1) The provisions of this act may not be waived by any payee.

(2) Any transfer agreement entered into on or after the effective date of

this act by a payee who resides in this state shall provide that disputes under

such transfer agreement, including any claim that the payee has breached the

agreement, shall be determined in and under the laws of this state. No such

transfer agreement shall authorize the transferee or any other party to confess

judgment or consent to entry of judgment against the payee.

(3) 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 (a) periodically confirming the payee's

survival, and (b) giving the annuity issuer and the structured settlement

obligor prompt written notice in the event of the payee's death.

(4) 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 be proposed transferee or any assignee

based on any failure of such transfer to satisfy the conditions of this act.

(5) Nothing contained in this act 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 before the

effective date of this act is valid or invalid.

(6) Compliance with the requirements set forth in Section 3 of this act and

fulfillment of the conditions set forth in Section 4 of this act 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, noncompliance with such requirements or failure to fulfill such

conditions.

SECTION 8. This act shall apply to any transfer of structured settlement

payment rights under a transfer agreement entered into on or after August 1,

2002; provided, however, that nothing contained herein shall imply that any

transfer under a transfer agreement reached before such date is either

effective or ineffective.

SECTION 9. This act shall take effect and be in force from and after July 1,

2002.