Illinois Governor Bruce Rauner yesterday signed into law Illinois Senate Bill 1268, which revised the Illinois Structured Settlement Protection Act in a number of ways.
Illinois in 1998 was the first state to enact a statute requiring court oversight of structured settlement factoring transactions, whereby individuals entitled to receive payments in the future would sell the rights to receive payments to “factoring” companies.
The amended statute, which takes effect immediately, is aimed at eliminating forum-shopping by factoring companies within Illinois, as well as intended to provide added protection to structured settlement payees who are considering selling their payments, and set in place additional procedural safeguards designed to protect structured settlements, the parties to settlement agreements, and the public interest in preserving such settlements.
Among other revisions to the Illinois SSPA are the following:
- A requirement that disclosure statement include an effective interest rate, so that the payee sees what the rate would be if the transaction were a loan instead of a sale of property rights;
- A requirement that payees appear – unless excused for good cause – at the hearings held by courts that are reviewing the proposed factoring transactions;
- A requirement that the reviewing court be provided information about prior factoring transactions, and attempted transactions, involving the same structured settlement;
- Provisions that address the issues raised by a 2013 Illinois Court of Appeals decision, Settlement Funding v. Brenston, by expressly providing that the existence of contractual anti-assignment provisions in relevant contracts does not eliminate a court’s authority to approve transfers, nor the ability of parties to the structured settlement agreement to waive their rights to enforce such contractual anti-assignment provisions.
The first predecessor statute to the current Illinois SSPA was passed by the Illinois General Assembly in 1997, and went into effect on January 1, 1998 – the first “structured settlement protection act” (or equivalent statute) in any state. The Illinois legislature revised the statute extensively in 2003, bringing the law into closer compliance with model SSPA legislation.
Now, forty-eight states have SSPAs.
The 2015 legislation (now Public Act 094-1072) is available in full here.