Most states have certain protections in place for those selling structured settlement payments to a third party. All state laws regarding such transfers differ slightly. In general, however, all state regulations require:
You can learn more about your state’s structured settlement protection act below:
IC 34-50-2
Chapter 2. Annuity Structured Settlements
IC 34-50-2-1
Sec. 1. As used in this chapter, “interested party” refers to:
(1) the payee;
(2) the annuity issuer;
(3) the structured settlement agreement obligor;
(4) the payee’s counsel who assisted in the establishment of the
structured settlement;
(5) a dependent of the payee; or
(6) a family member or relative who is acting as a caregiver for
the payee.
As added by P.L.219-2001, SEC.6.
IC 34-50-2-2
Sec. 2. As used in this chapter, “structured settlement” means
periodic payments of damages established by a settlement or a court
judgment in resolution of a tort claim for personal injury.
As added by P.L.219-2001, SEC.6.
IC 34-50-2-3
Sec. 3. As used in this chapter, “transfer” means a:
(1) sale;
(2) assignment;
(3) pledge;
(4) hypothecation; or
(5) any other form of alienation or encumbrance;
of structured settlement payment rights made by a payee for
consideration.
As added by P.L.219-2001, SEC.6.
IC 34-50-2-4
Sec. 4. As used in this chapter, “transferee” means a party acquiring
or proposing to acquire structured settlement payment rights through
a transfer agreement.
As added by P.L.219-2001, SEC.6.
IC 34-50-2-5
Sec. 5. A direct or indirect transfer of structured settlement payment
rights is not effective, and a structured settlement obligor or annuity
issuer is not required to make a payment directly or indirectly to a
transferee, unless an Indiana court of competent jurisdiction has
approved the transfer in a final order in accordance with sections 7 and
8 of this chapter.
As added by P.L.219-2001, SEC.6.
IC 34-50-2-6
Sec. 6. Not less than ten (10) days before the date on which a payee
becomes obligated under a transfer agreement, the transferee shall
provide to the payee and other interested parties a disclosure statement,
in boldface type of not less than fourteen (14) points in size, that
includes the following:
(1) The amounts and due dates of the structured settlement
payments to be transferred under the transfer agreement.
(2) The aggregate amount of the payments disclosed under
subdivision (1).
(3) An estimate of the present fair market value of the future
periodic payments under the structured settlement agreement.
(4) The gross amount payable to the payee as consideration for
the transfer of the structured settlement payments disclosed under
subdivision (1).
(5) An itemized list of all:
(A) commissions;
(B) fees;
(C) costs;
(D) expenses; and
(E) charges;
payable by the payee or deductible from the gross amount payable
to the payee, as disclosed under subdivision (4).
(6) The net amount payable to the payee after any deduction is
made from the gross amount payable to the payee, as described in
subdivision (5).
(7) The quotient, expressed as a percentage, obtained by dividing
the net amount payable to the payee, as disclosed under
subdivision (6), by the estimate of the present fair market value
of the future periodic payments, as disclosed under subdivision
(3).
(8) The amount of any penalty and the aggregate amount of any
liquidated damages, including penalties, payable by the payee in
the event of a breach of the transfer agreement by the payee.
As added by P.L.219-2001, SEC.6.
IC 34-50-2-7
Sec. 7. An Indiana court of competent jurisdiction may approve a
transfer of structured settlement payment rights only in a final order
that is based on the express findings of the court. The express findings
must include all of the following:
(1) The consideration that the payee will receive for the transfer
reasonably reflects the present fair market value of the future
periodic payments under the structured settlement agreement.
(2) The transfer is in the best interest of the payee.
(3) The transfer will not materially impair the payee’s ability to
discharge the payee’s obligations to the payee’s dependents.
(4) If the transferee is the applicant, the transferee has provided
to the payee a disclosure statement in accordance with section 6
of this chapter.
As added by P.L.219-2001, SEC.6.
IC 34-50-2-8
Sec. 8. (a) An application under this chapter for approval of a
transfer of structured settlement payment rights must be filed in:
(1) the Indiana court in which the underlying tort action was
pending; or
(2) the court of general jurisdiction in the Indiana county in which
the payee resides.
(b) The following apply to an application filed under subsection (a):
(1) Upon filing of the application, the court shall set a date and
time for a hearing on the application not earlier than twenty (20)
days after the application is filed and shall notify the applicant of
the date, time, and place of the hearing. The court shall give
precedence to a hearing set under this section in accordance with
Indiana Trial Rule 40.
(2) The applicant shall file with the court and shall serve on:
(A) all interested parties;
(B) the annuity issuer; and
(C) the structured settlement obligor;
in the manner prescribed in the rules of civil procedure for the
service of process, a notice of the proposed transfer.
(3) The notice required under subdivision (2) shall include:
(A) a copy of the application;
(B) a copy of the proposed transfer agreement, including the
transferee’s:
(i) name;
(ii) address; and
(iii) taxpayer identification number;
(C) a copy of the disclosure statement provided by the
transferee under section 6 of this chapter whenever the
application is filed by a person other than the payee;
(D) notification of the date, time, and place of the hearing on
the application; and
(E) notification that an interested party may support, oppose,
or otherwise respond to the application, either in person or by
counsel, by:
(i) submitting to the court a written response containing the
interested party’s support of, opposition to, or comments on
the application; or
(ii) participating in the hearing.
(4) At the conclusion of the hearing on an application filed under
subsection (a), the court may enter an order:
(A) granting approval with or without modification; or
(B) denying approval;
of the transfer. If the court grants approval of the transfer, the
court shall include in the order all of the express findings required
under section 7 of this chapter. If the court denies the approval of
the transfer, the court shall include in the order the reasons for the
denial.
(5) An order of the court made under subdivision (4) is a final and
appealable order.
As added by P.L.219-2001, SEC.6.
IC 34-50-2-9
Sec. 9. (a) A payee who proposes to make a transfer of structured
settlement payment rights does not:
(1) incur a penalty;
(2) forfeit an application fee or other payment; or
(3) otherwise incur a liability to the proposed transferee;
if the transfer is not approved by a court under section 7 of this chapter.
(b) A provision of this chapter may not be waived.
(c) This chapter does not:
(1) authorize a transfer of structured settlement payment rights in
contravention of applicable law; or
(2) give effect to a transfer of structured settlement payment
rights that is void under applicable law.
As added by P.L.219-2001, SEC.6.
IC 34-50-2-10
Sec. 10. After a transfer that has been approved in accordance with
this chapter, a structured settlement obligor and an annuity issuer are
immune from liability to a payee, or to a party other than a transferee
who is claiming through the payee, for paying structured settlement
payments to a transferee.
As added by P.L.219-2001, SEC.6.
IC 34-50-2-11
Sec. 11. Failure of a transferee of structured settlement payment
rights to timely provide a true and complete disclosure statement to a
payee under this chapter in connection with a direct or indirect transfer
of structured settlement payment rights is an incurable deceptive act
under IC 24-5-0.5.
As added by P.L.219-2001, SEC.6.