Virginia has, for the third time since 1999, revised its structured settlement protection act.
The Virginia structured settlement protection act (“SSPA”) first went into effect in 1999, was revised in 2001 and 2006, and now has been revised again.
The revised Virginia SSPA, signed into law this week, goes into effect in July 1, 2016.
The terms of the revised Virginia statute are aimed at, among other things, accomplishing the following goals:
- Eliminating forum shopping by factoring companies, which are directing by a new statutory requirement to file applications for court approval of transfers of structured settlement payment rights in the home county of the payee entitled to receive such payments;
- Requiring that the payee appears in court, to help the court in, inter alia, making a determination as to whether the proposed transfer is in the payee’s best interest;
- Ensuring that the court be provided with some information about whether the payee previously transferred any other portions of the scheduled payments, again, to help (in part) with the best interest determinations; and
- Providing the payee with additional disclosure information concerning the effective interest rate (treating the transaction as a loan, even if it is a sale) of the proposed transfer.
Other changes include a new provision that recognizes the rights of parties to waive or enforce a contractual anti-assignment provision.
Transfers approved pursuant to the Virginia SSPA have been the subject of articles in the Washington Post, highlighting the need for greater protections of payees. For more, see prior Secondary Insurance Market Blog posts here and here.
The full text of the revised Virginia SSPA is available here.