Rhode Island Structured Settlements Island

It is enacted by the General Assembly as follows:

SECTION 1. Title 27 of the General Laws entitled "Insurance" is hereby amended

by adding thereto the following chapter: CHAPTER 9.3

STATE STRUCTURED SETTLEMENT PROTECTION ACT

27-9.3-1. TITLE. - - THIS CHAPTER SHALL BE KNOWN AND REFERRED TO AS THE

"STRUCTURED SETTLEMENT PROTECTION ACT." 27-9.3-2. DEFINITIONS. -- FOR

PURPOSES OF THIS CHAPTER:

(1) "ANNUITY ISSUER" MEANS AN INSURER THAT HAS ISSUED A CONTRACT TO FUND

PERIODIC PAYMENTS UNDER A STRUCTURED SETTLEMENT;

(2) "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;

(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 UNITED STATES 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

TO BE MADE FROM SUCH CONSIDERATION;

(5) "INDEPENDENT PROFESSIONAL ADVICE" MEANS ADVICE OF AN ATTORNEY, CERTIFIED

PUBLIC ACCOUNTANT, ACTUARY OR OTHER LICENSED PROFESSIONAL ADVISER;

(6) "INDEPENDENT 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;

(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 SECTION 27-9.3-3(5) OF THIS CHAPTER;

(8) "PAYEE" MEANS AN INDIVIDUAL WHO IS RECEIVING TAX FREE PAYMENTS UNDER A

STRUCTURED SETTLEMENT AND PROPOSES TO MAKE A TRANSFER OF PAYMENT RIGHTS

THEREUNDER;

(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 UNITED STATES

INTERNAL REVENUE CODE, UNITED STATES CODE TITLE 26, AS AMENDED FROM TIME TO

TIME;

(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 SUCH 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 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, 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; OR

(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;

(17) "TERMS OF THE STRUCTURED SETTLEMENT" INCLUDE, 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;

(18) " TRANSFER " MEANS ANY SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR ANOTHER

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;

(19) " TRANSFER AGREEMENT" MEANS THE AGREEMENT PROVIDING FOR A TRANSFER OF

STRUCTURED SETTLEMENT PAYMENT RIGHTS;

(20) " 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, ATTORNEYS'

FEES, ESCROW FEES, LIEN RECORDATION FEES, JUDGMENT AND LIEN SEARCH FEES,

FINDERS' 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;

(21) "TRANSFEREE" MEANS A PARTY ACQUIRING OR PROPOSING TO ACQUIRE STRUCTURED

SETTLEMENT PAYMENT RIGHTS THROUGH A TRANSFER. 27-9.3-3. 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 SUCH 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 SUCH

DISCOUNTED PRESENT VALUE;

(4) THE GROSS ADVANCE AMOUNT;

(5) AN ITEMIZED LISTING OF ALL APPLICABLE TRANSFER EXPENSES, OTHER THAN

ATTORNEYS' 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 (3RD) BUSINESS

DAY AFTER THE DATE THE AGREEMENT IS SIGNED BY THE PAYEE. 27-9.3-4. APPROVAL

OF TRANSFERS OF STRUCTURED SETTLEMENT PAYMENT RIGHTS. -- (A) 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 BY A

FINAL COURT ORDER OF THE SUPERIOR COURT FOR THE COUNTY IN WHICH THE PAYEE

RESIDES FINDING THAT:

(1) THE TRANSFER IS IN THE BEST INTEREST OF THE PAYEE, TAKING INTO ACCOUNT THE

WELFARE AND SUPPORT OF THE PAYEE'S DEPENDENTS; AND

(2) 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

(3) THE TRANSFER DOES NOT CONTRAVENE ANY APPLICABLE STATUTE OR THE ORDER OF

ANY COURT OR OTHER GOVERNMENT AUTHORITY.

(B) THE PAYEE SHALL HAVE THE RIGHT TO CANCEL THE TRANSFER AGREEMENT, WITHOUT

PENALTY OR FURTHER OBLIGATION, NOT LATER THAN THE THIRD (3RD) BUSINESS DAY

AFTER THE DATE THE TRANSFER AGREEMENT IS SIGNED BY THE PAYEE. 27-9.3-5.

EFFECTS OF TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS. -- FOLLOWING A

TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS UNDER THIS CHAPTER:

(1) 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;

(2) 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

ATTORNEYS' FEES, ARISING FROM COMPLIANCE BY SUCH PARTIES WITH THE ORDER OF THE

SUPERIOR COURT OR ARISING AS A CONSEQUENCE OF THE TRANSFEREE'S FAILURE TO

COMPLY WITH THIS CHAPTER;

(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) 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 CHAPTER.

27-9.3-6. PROCEDURE FOR APPROVAL OF TRANSFERS. -- (A) AN APPLICATION UNDER

THIS CHAPTER FOR APPROVAL OF A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT

RIGHTS SHALL BE MADE BY THE TRANSFEREE AND SHALL BE BROUGHT IN THE SUPERIOR

COURT FOR THE COUNTY IN WHICH THE PAYEE RESIDES.

(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 SECTION 27-9.3-4, THE TRANSFEREE SHALL FILE WITH THE COURT AND SERVE ON

ALL INTERESTED PARTIES A NOTICE OF THE PROPOSED TRANSFER AND THE APPLICATION

FOR ITS AUTHORIZATION, INCLUDING WITH SUCH 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 SECTION 27-9.3-3 OF THIS

CHAPTER;

(4) A LISTING OF EACH OF THE PAYEE'S DEPENDENTS, TOGETHER WITH 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) 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.

27-9.3-7. GENERAL PROVISIONS CONSTRUCTION. - - (A) THE PROVISIONS OF THIS

CHAPTER MAY NOT BE WAIVED BY ANY PAYEE.

(B) ANY TRANSFER AGREEMENT ENTERED INTO ON OR AFTER THE EFFECTIVE DATE OF THIS

CHAPTER 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

JUDGEMENT 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 SUCH TRANSFER TO SATISFY THE CONDITIONS OF THIS

CHAPTER.

(E) NOTHING CONTAINED IN THIS CHAPTER 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 CHAPTER IS VALID OR INVALID.

(F) COMPLIANCE WITH THE REQUIREMENTS SET FORTH IN SECTION 27-9.3-3 AND

FULFILLMENT OF THE CONDITIONS SET FORTH IN SECTION 27-9.3-4 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 2. This act shall take effect upon passage and shall apply to any

transfer of structured settlement payment rights under a transfer agreement

entered into on or after the thirtieth (30th) day after the date of enactment

of this chapter; provided, however, that nothing contained herein shall imply

that any transfer under a transfer agreement reached prior to such date is

either effective or ineffective.