Browsed by
Tag: SSPA

Revised Connecticut Structured Settlement Protection Act Goes Into Effect, Addressing Probate Matters

Revised Connecticut Structured Settlement Protection Act Goes Into Effect, Addressing Probate Matters

The Connecticut Structured Settlement Protection Act is one of 49 state statutes that provide that a transaction involving the sale or loan or the right to receive future structured settlement payments is ineffective unless the purchaser meets certain requirements such as providing a disclosure statement to the individual seller. Perhaps the most important requirement is that the purchaser (the “transferee”, in the words of the statute, which is usually a factoring company) must begin a court proceeding and bring the transaction before…

Read More Read More

IRS Memorandum About Structured Settlement Protection Acts Takes Aim at Forum-Shopping by Factoring Companies

IRS Memorandum About Structured Settlement Protection Acts Takes Aim at Forum-Shopping by Factoring Companies

An Internal Revenue Service memorandum appears to be aimed at discouraging factoring companies from forum shopping when seeking to obtain statutorily-required court approval of transfers of structured settlement payment rights. In a January memorandum, the IRS said that the Internal Revenue Code’s excise tax, imposed by Section 5891 of the Code, may apply when the factoring company obtains court approval from a state other than the payee’s domicile state. Section 5891 provides that a factoring company must pay an excise…

Read More Read More

New Mexico Court Rejected Factoring Deal, Awards Attorneys’ Fees ‘As of Right’ to Insurer Because of Factoring Company’s Non-Compliance

New Mexico Court Rejected Factoring Deal, Awards Attorneys’ Fees ‘As of Right’ to Insurer Because of Factoring Company’s Non-Compliance

In a 2015 opinion that was recently published on Westlaw, a New Mexico trial court rejected a proposed transfer of structured settlement payment rights because it was not in the payee’s best interest. The court also awarded attorneys’ fees to the structured settlement obligor and annuity issuer, based on the factoring company’s failure to comply with the requirements of the New Mexico Structured Settlement Protection Act. Moreover, the issuer and obligor were entitled to such fees “as of right”, due to…

Read More Read More

CFPB Rejects J.G. Wentworth’s Challenge to Investigative Demand

CFPB Rejects J.G. Wentworth’s Challenge to Investigative Demand

Consumer Financial Protection Bureau Director Richard Cordray this month signed an order rejecting J.G. Wentworth, LLC’s petition for an order to set aside or modify a CFPB civil investigative demand. In the order, Cordray said that the CFPB in September, 2015, has issued a civil investigative demand (CID) to J.G. Wentworth, stating in the DIC that it had been issued “to determine whether persons involved in advancing funds in exchange for the rights to future payments from structured settlements or…

Read More Read More

Interest Rate Cap Is ‘Best Solution’ to Predatory Practices of Settlement Factoring Companies, Author Says in Huffington Post Commentary

Interest Rate Cap Is ‘Best Solution’ to Predatory Practices of Settlement Factoring Companies, Author Says in Huffington Post Commentary

The Washington Post’s series of stories on structured settlement factoring shows that the structured settlement factoring industry is not “under control” of legal regulations, and new laws – possibly including an interest rate cap – may be needed. That’s the conclusion of Don McNay, a writer and financial advisor with years of experience in the business of establishing structured settlements for injury victims. McNay, in “Stopping Structured Settlement Predators for Good This Time“, praised the Washington Post’s investigatory work, and described his experiences…

Read More Read More

Wall Street Journal Focus Turns to Structured Settlement Factoring

Wall Street Journal Focus Turns to Structured Settlement Factoring

The Wall Street Journal last week published an article focusing on structured settlement factoring, starting with the story of Terrence Taylor. Taylor, Journal reporter Leslie Scism wrote, lost a leg and fingers in childhood fire, and his lawyers “crafted a multimillion-dollar legal settlement to ensure he had steady income for life.”  However, “[i]t didn’t take much for him to lose it.”  Taylor, wrote Scism, sold his payment rights in a “rapid-fire” series of transactions with five factoring companies – and he…

Read More Read More

State Structured Settlement Protection Acts Disfavor Transfers of Settlement Payments, Notwithstanding Wrong-Headed Comments

State Structured Settlement Protection Acts Disfavor Transfers of Settlement Payments, Notwithstanding Wrong-Headed Comments

Secondary Insurance Market Blog’s authors often come across statements that are contrary to the facts in the world of secondary insurance markets. While there are too many such comments to be concerned with them all, occasionally it makes sense to address them. For instance, the statement that a structured settlement protection act “favors” transfers of structured settlement payment rights is inconsistent with an accurate understanding of such statutes, some of which are based on legislative proposals expressly providing that these laws are…

Read More Read More

A Factoring Transaction Might Need Approval From More Than One Court – But The Factoring Company May Need To Provide an Explanation

A Factoring Transaction Might Need Approval From More Than One Court – But The Factoring Company May Need To Provide an Explanation

Under the laws of forty-eight states, structured settlement factoring transactions are generally effective unless and until they receive court approval, by way of a court order issued pursuant to applicable structured settlement protection act (SSPA) requirements. Sometimes, those requirements can mean that the transfer needs approval from more than one court.  A commentary on the subject describes an example this way: For example, if a factoring company proposes to acquire a structured settlement payment rights from a payee who is…

Read More Read More

No Interest In Annuity, So Nothing To Assign

No Interest In Annuity, So Nothing To Assign

Under structured settlement protection acts, a transfer of an individual payee’s right to receive structured settlement payments becomes legally effective only when and if a court approves the transfer. Those forty-eight states with structured settlement protection acts recognize, in those statutes, that the property being transferred by such court approval is the right to receive payments under the structured settlement agreement – and not under the annuity that is the asset that typically funds the payments. That recognition items from…

Read More Read More

Revised Oregon SSPA Also Includes New Professional Advice, Cooling Off Provisions

Revised Oregon SSPA Also Includes New Professional Advice, Cooling Off Provisions

The Oregon Structured Settlement Protection Act (“Oregon SSPA”) is one of forty-eight state structured settlement protection acts (SSPAs) – every state has one, except for Wisconsin and New Hampshire. Dating back to 2005, the Oregon SSPA originally followed, for the most part, the model legislation that is in place (with some modifications) in most states. Last year, the Oregon legislature decided to revise the Oregon SSPA, and the revisions were signed into law and went into effect January 1, 2014….

Read More Read More