SB1268 99TH GENERAL ASSEMBLY

LRB099 07155 MLM 27243 b

99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
SB1268

Introduced 2/17/2015, by Sen. William R. Haine

SYNOPSIS AS INTRODUCED:

215 ILCS 153/15
215 ILCS 153/20
215 ILCS 153/25
215 ILCS 153/30
215 ILCS 153/35

Amends the Structured Settlement Protection Act. Provides that the structured settlement obligor and the annuity issuer shall be discharged from any and all liability by complying with a court order approving a transfer of structured settlement payment rights, and shall not have or incur any liability to the payee, transferee, or assignee as a result of the failure of the court order, transfer agreement, disclosure statement, or the transfer proceeding to comply with the Act, another applicable State or federal statute relating to structured settlement transfers, or any other law. Provides that an application for approval of a structured settlement transfer shall be brought in the circuit court of the county in which the payee is domiciled at the time the transfer agreement was signed or, if the payee is not domiciled in this State or in any other state that has enacted a statute that requires court approval of a transfer of structured settlement payment rights, then the application may be brought in the county in which the structured settlement obligor or annuity issuer is domiciled or has its principal place of business in this State. Provides what information is necessary to make an application to the court under the Act. Provides that a court may review all applications for transfer filed, and may approve or deny a transfer despite the existence of terms in the underlying settlement agreement, qualified assignment, related annuity, or in any other relevant document that purports to restrict or preclude the payee's right or power to assign or transfer structured settlement payment rights. Makes other changes.

A BILL FOR

AN ACT concerning regulation.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Structured Settlement Protection Act is amended by changing Sections 15, 20, 25, 30, and 35 as follows:

(215 ILCS 153/15)

Sec. 15. 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 such 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 such advice or knowingly waived the opportunity to seek and receive such advice in writing; and

(3) the transfer does not contravene any applicable statute or the order of any court or other government authority.

(Source: P.A. 93-502, eff. 1-1-04.)

(215 ILCS 153/20)

Sec. 20. Effects of transfer of structured settlement payment rights. Following the issuance of a court order approving a transfer of structured settlement payment rights under this Act:

(1) the structured settlement obligor and the annuity issuer shall, as to all parties except the transferee or an assignee designated by the transferee, be discharged and released from any and all liability for complying with the court order and from any and all liability to the payee for the transferred payments, and the structured settlement obligor and the annuity issuer shall comply with the court order and shall not have or incur any liability to the payee, transferee, or assignee as a result of the failure of the court order, transfer agreement, disclosure statement, or the transfer proceeding to comply with this Act or another applicable State or federal statute relating to structured settlement transfers or any other law;

(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 agreement, for any taxes incurred by the parties structured settlement obligor's or annuity issuer as a consequence of the transfer being approved; and

(B) for any other liabilities or costs, including reasonable costs and attorneys' fees, arising from structured settlement obligor's or annuity issuer's 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 Act;

(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 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 Act.

(Source: P.A. 93-502, eff. 1-1-04.)

(215 ILCS 153/25)

Sec. 25. Procedure for approval of transfers.

(a) No annuity issuer or structured settlement obligor may make payments on a structured settlement to anyone other than the payee or beneficiary of the payee without prior approval of the circuit court or responsible administrative authority. No payee or beneficiary of a payee of a structured settlement may assign in any manner the structured settlement payment rights without the prior approval of the circuit court or responsible administrative authority.

(b) An application under this Act for approval of a transfer of structured settlement payment rights shall be made by the transferee and shall be brought in the circuit court of the county in which the payee is domiciled at the time the transfer agreement was signed or, if the payee is not domiciled in this State or in any other state that has enacted a statute that requires court approval of a transfer of structured settlement payment rights, then the application may be brought in the county in which the structured settlement obligor or annuity issuer is domiciled or has its principal place of business in this State an action was or could have been maintained or before any responsible administrative authority that approved the structured settlement agreement.

(c) The payee shall attend the hearing on the application in person, unless the court determines that good cause exists to excuse the payee from attending.

(d) In addition to other requirements of this Act, the application should include:

(1) the payee's name, age, and county of domicile;

(2) a copy of the transfer agreement and disclosure statement as an attachment to the application;

(3) a general description of the reasons why the payee seeks to complete the proposed transfer;

(4) a description of the structured settlement payments that the payee has not previously transferred and will have remaining if the proposed transfer is approved, to the extent that the transferee has actual knowledge of prior transfers by the payee because the transferee was a party to the prior transfer or such prior transfer was disclosed to the transferee in writing; and

(5) A summary of:

(i) any prior transfers completed by the payee with the transferee within 3 years from the date of the current transfer agreement and any prior attempted transfers to the transferee by the payee which were denied within one year from the date of the current transfer agreement;

(ii) any prior transfers completed by the payee with any person or entity other than the transferee within 3 years from the date of the current transfer agreement and any prior attempted transfers by the payee to any person or entity other than the transferee which was denied within one year from the date of the current transfer agreement, to the extent that said transfers or attempted transfers are actually known by the transferee or are disclosed to the transferee by the payee in writing.

(Source: P.A. 93-502, eff. 1-1-04.)

(215 ILCS 153/30)

Sec. 30. General provisions; construction.

(a) The provisions of this Act may not be waived by any payee.

(b) 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 the 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.

(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 Act.

(e) 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 prior to the effective date of this Act is valid or invalid statute. The court has jurisdiction to review all applications for transfer filed pursuant to this Act, and may approve or deny a transfer despite the existence of terms in the underlying settlement agreement, qualified assignment, related annuity, or in any other relevant document that purports to restrict or preclude the payee's right or power to assign or transfer structured settlement payment rights.

(f) Compliance with the requirements set forth in Section 10 of this Act and fulfillment of the conditions set forth in Section 15 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, non-compliance with those requirements or failure to fulfill those conditions. The structured settlement obligor and annuity issuer may rely on a court order issued by a court in accordance with this Act in making any structured settlement payments that come due after the receipt of the court order by the parties and the structured settlement obligor and annuity issuer are relieved of any liability to the payee, transferee, assignee, or any other party for making the structured settlement payments as directed in the court order.

(g) The changes made to this Section by this amendatory Act of the 99th General Assembly are declarative of existing law.

(Source: P.A. 93-502, eff. 1-1-04.)

(215 ILCS 153/35)

Sec. 35. Applicability. This Act shall apply to any transfer of structured settlement payment rights under a transfer agreement entered into on or after the 30th day after the effective date of this Act, including any transfer of structured settlement payment rights where the structured settlement agreement, qualified assignment agreement, or annuity issued to fund the structured settlement contains or includes language or provisions that purport to preclude or restrict the transfer, assignment, or encumbrance of structured settlement payments. The changes made in this Section by this amendatory Act of the 99th General Assembly are declarative of existing law ; provided, however, that nothing contained herein shall imply that any transfer under a transfer agreement reached prior to that date is either effective or ineffective.

(Source: P.A. 93-502, eff. 1-1-04.)