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Bill 3957

                    Current Status

Bill Number:                      3957
Type of Legislation:              General Bill GB
Introducing Body:                 House
Introduced Date:                  19990421
Primary Sponsor:                  Harrison
All Sponsors:                     Harrison and Cato
Drafted Document Number:          l:\council\bills\dka\3442mm99.doc
Residing Body:                    House
Current Committee:                Judiciary Committee 25 HJ
Subject:                          Structured Settlement Protection Act, 
                                  Torts, Courts, Acts Cited By Popular Name


                        History

Body    Date      Action Description                     Com     Leg Involved
______  ________  ______________________________________ _______ ____________
House   19990421  Introduced, read first time,           25 HJ
                  referred to Committee


                             Versions of This Bill

TO AMEND TITLE 15, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO CIVIL REMEDIES AND PROCEDURES, BY ADDING CHAPTER 79 SO AS TO ENACT THE "SOUTH CAROLINA STRUCTURED SETTLEMENT PROTECTION ACT", WHICH PROVIDES PROCEDURES TO REGULATE THE TRANSFER OF STRUCTURED SETTLEMENTS, INCLUDING PROVISIONS REQUIRING COURT APPROVAL IN ADVANCE FOR THE TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS, ESTABLISHING DISCLOSURE AND FILING REQUIREMENTS AND FINDINGS NEEDED FOR COURT APPROVAL OF TRANSFERS, AND ESTABLISHING THE JURISDICTION OF THE CIRCUIT COURTS FOR APPROVING TRANSFERS OF STRUCTURED SETTLEMENTS.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 1. Title 15 of the 1976 Code is amended by adding:

Section 15-79-10. This chapter may be cited as the 'South Carolina Structured Settlement Protection Act'.

Section 15-79-20. As used in this chapter:

(1) 'Annuity issuer' means an insurer that has issued an annuity contract to be used for funding of periodic payments pursuant to a structured settlement.

(2) 'Payee' means an individual who is receiving tax-free damage payments pursuant to a structured settlement and who wants to make a transfer of those payment rights.

(3) 'Protected parties' means, with respect to a structured settlement, the payee, a named beneficiary designated in the annuity contract or structured settlement to receive payments following the payee's death, or if the named beneficiary is a minor, the named beneficiary's parent or guardian, the annuity issuer, and the structured settlement obligor.

(4) 'Qualified assignment agreement' means an agreement providing for a qualified assignment that meets the requirements of Section 130 of the Internal Revenue Code, as amended from time to time.

(5) 'Settled claim' means the original tort claim resolved by a structured settlement.

(6) 'Structured settlement' means an arrangement for periodic payments of damages for personal injuries established by settlement or judgment in resolution of a tort claim.

(7) 'Structured settlement obligor' means, with respect to a structured settlement, the party that has the continuing periodic payment obligation to the payee pursuant to a structured settlement agreement or a qualified assignment agreement.

(8) 'Structured settlement payment rights' means rights to receive periodic payments, including lump sum payments, pursuant to a structured settlement, whether from the settlement obligor or the annuity issuer, if the:

(a) payee or other protected party is domiciled in this State; or

(b) settled claim was pending before the courts of this State when the structured settlement was reached.

(9) 'Transfer' means the sale, assignment, pledge, hypothecation, or other form of alienation or encumbrance made for consideration.

(10) 'Transfer agreement' means the agreement providing for transfer of structured payment rights from a payee to a transferee.

Section 15-79-30. A transfer of structured settlement payment rights is not effective and a structured agreement obligor or annuity issuer is not required to make a payment directly or indirectly to a transferee of transferred structured settlement payment rights unless the transfer has been approved in advance in an order of a court of competent jurisdiction, based on the court's express findings that:

(1) the transfer complies with the requirements of this chapter and does not contravene other applicable law;

(2) at least ten days before the date on which the payee entered into the transfer agreement, the transferee provided the payee a disclosure statement typed in bold print, no smaller than fourteen point, and including:

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

(b) the aggregate amount of the payments;

(c) the discounted present value of the payments, together with the discount rate or rates used in determining the discounted present value;

(d) the gross amount payable to the payee in exchange for the payments;

(e) an itemized listing of all brokers' commissions, service charges, application or processing fees, closing costs, filing or administrative charges, legal fees, notary fees, and other commissions, fees, costs, expenses, and charges payable by the payee or deductible from the gross amount otherwise payable to the payee; and

(f) the amount of a penalty and the aggregate amount of liquidated damages, including penalties, payable by the payee in the event of a breach of the transfer agreement by the payee;

(3) the transfer is necessary to enable the payee to avoid imminent financial hardship;

(4) the transferee gave written notice of the transferee's name, address, and tax identification number to the annuity issuer and the structured settlement obligor and filed a copy of the notice with the court; and

(5) the payee consented in writing to the transfer.

Section 15-79-40. (A) The circuit court in the county in which the original action was filed or is to be filed or the county where the applicant resides has jurisdiction over an application for approval of a transfer of structured settlement payment rights pursuant to this chapter.

(B) At least twenty days before the scheduled hearing on an application for court approval of a transfer of structured settlement payment rights pursuant to this chapter, the payee or transferee shall file with the court and serve on all protected parties a notice of the proposed transfer and the application for its approval, including:

(1) a copy of the transferee's application to the court;

(2) a copy of the disclosure statement required by Section 15-79-30(2); and

(3) notification of the time and place of the hearing and notification of the manner and time for filing written responses to the application, except that the time for filing responses may not be less than ten days after the service of the transferee's notice.

(C) The provisions of this chapter may not be waived.

Section 15-79-50. The provisions of this chapter apply to a transfer of structured settlement payment rights pursuant to a transfer agreement reached on or after the effective date of this act."

SECTION 2. This act takes effect upon approval by the Governor.

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