SB298, s. 1 1Section 1. Chapter 787 of the statutes is created to read:
SB298,2,32 Chapter 787
3 Structured settlements
SB298,3,1
1787.01 Definitions. In this chapter:
SB298,3,3 2(1) "Annuity issuer" means an insurer that has issued an insurance contract
3used to fund periodic payments under a structured settlement.
SB298,3,5 4(2) "Applicable law" means the law of the United States, the law of this state
5and the law of any jurisdictions other than this state:
SB298,3,66 (a) Where the payee or any other interested party is domiciled.
SB298,3,87 (b) Under which a structured settlement agreement was approved by a court
8or a responsible administrative authority.
SB298,3,11 9(3) "Dependent" means the spouse and minor children of a payee and all other
10persons for whom the payee is legally obligated to provide support, maintenance or
11alimony.
SB298,3,16 12(4) "Discounted present value" means the fair present value of future payments
13as determined by discounting the payments to the present time using the most
14recently published applicable federal rate for determining the present value of an
15annuity, as issued by the U.S. internal revenue service under section 7520 of the
16Internal Revenue Code.
SB298,3,21 17(5) "Favorable tax determination" means a decision by a tax authority
18definitively establishing that the federal income tax treatment of a structured
19settlement and of any qualified assignment agreement for the interested parties to
20that settlement and agreement, other than the payee, will not be affected by a
21transfer of the structured settlement payment right.
SB298,3,24 22(6) "Governmental unit" means the United States; the state; any county, city,
23village or town; or any political subdivision, department, division, board or agency
24of the United States, the state or any county, city, village or town.
SB298,4,3
1(7) "Independent professional advice" means advice provided by an
2appropriate licensed professional adviser if the person providing the advice meets all
3of the following criteria:
SB298,4,54 (a) Is requested by the payee to render advice concerning the legal, tax and
5financial implications of a transfer of the structured settlement payment right.
SB298,4,76 (b) Is not affiliated with or compensated by the transferee of the structured
7settlement payment right.
SB298,4,108 (c) Receives compensation for rendering advice concerning the legal, tax and
9financial implications of a transfer of the structured settlement payment right that
10is not affected by the transfer occurring or not occurring.
SB298,4,14 11(8) "Interested party" means the payee, any beneficiary designated under the
12annuity contract to receive payments following the payee's death, the annuity issuer,
13the structured settlement obligor and any other person who has continuing rights
14or obligations under the structured settlement.
SB298,4,15 15(9) "Internal Revenue Code" has the meaning given in s. 71.01 (6).
SB298,4,17 16(10) "Payee" means the individual who is receiving tax-free payments for
17injuries under a structured settlement.
SB298,4,18 18(11) "Periodic payments" include scheduled future lump-sum payments.
SB298,4,21 19(12) "Qualified assignment agreement" means an agreement providing for a
20qualified assignment within the meaning of section 130 of the Internal Revenue
21Code.
SB298,4,24 22(13) "Responsible administrative authority" means any governmental unit
23vested by law with exclusive jurisdiction over the original tort claim or worker's
24compensation claim that was resolved by a structured settlement.
SB298,5,4
1(14) "Structured settlement" means an arrangement for the periodic payments
2of damages for personal injuries that was established by a settlement or a court
3judgment that resolved a tort claim or for periodic payments in settlement of a
4worker's compensation claim.
SB298,5,6 5(15) "Structured settlement agreement" means the agreement, judgment,
6stipulation or release that includes the terms of a structured settlement.
SB298,5,9 7(16) "Structured settlement obligor" means the person who has the continuing
8obligation to make periodic payments to the payee under a structured settlement
9agreement or under a qualified assignment agreement.
SB298,5,12 10(17) "Structured settlement payment right" means a right to receive periodic
11payments under a structured settlement, either from the structured settlement
12obligor or from the annuity issuer.
SB298,5,13 13(18) "Tax authority" means each of the following:
SB298,5,1514 (a) A provision of the Internal Revenue Code or a regulation adopted under that
15code.
SB298,5,1716 (b) A revenue ruling or revenue procedure issued by the internal revenue
17service.
SB298,5,1818 (c) A private letter ruling issued by the internal revenue service.
SB298,5,2019 (d) A decision of the U.S. supreme court or a decision of a lower federal court
20in which the internal revenue service has acquiesced.
SB298,5,24 21(19) "Terms of a structured settlement" includes the terms of the structured
22settlement agreement, the annuity contract, any qualified assignment agreement
23and any order or approval of a court, a responsible administrative authority or other
24governmental unit authorizing or approving the structured settlement.
SB298,6,2
1(20) "Transfer" means the sale, assignment, pledge or other form of alienation
2or encumbrance of a right for consideration.
SB298,6,4 3(21) "Transfer agreement" means the agreement providing for the transfer of
4a structured settlement payment right from a payee to a transferee.
SB298,6,6 5(22) "Transferee" means a party acquiring or proposing to acquire a structured
6settlement payment right through a transfer of that right.
SB298,6,16 7787.02 Conditions necessary to transfer the structured settlement
8payment right.
(1) If the payee, the structured settlement obligor or the annuity
9issuer under a structured settlement is domiciled in this state, or if the structured
10settlement agreement was approved by a court or a responsible administrative
11authority in this state, then no direct or indirect transfer of a structured settlement
12payment right under the settlement shall be effective and neither the structured
13settlement obligor nor the annuity issuer shall be required to make any payments
14directly or indirectly to any transferee of that right unless the transfer has been
15approved in advance by a final order of a court of competent jurisdiction or a
16responsible administrative authority.
SB298,6,19 17(2) A court or responsible administrative authority may approve a transfer of
18a structured settlement payment right only if the court or authority makes express
19findings that all of the conditions in subs. (3) to (9) are met.
SB298,6,21 20(3) The transfer complies with the requirements under this chapter and does
21not contravene other applicable law.
SB298,6,25 22(4) Not less than ten days before the date on which the payee first incurs any
23obligation with respect to the transfer, the transferee provides the payee with a
24disclosure statement written in bold print, in a type size that is no smaller than 14
25point.
SB298,7,1
1(5) The disclosure statement under sub. (4) includes all of the following:
SB298,7,32 (a) The amounts and due dates of the structured settlement payments to be
3transferred.
SB298,7,54 (b) The aggregate amount of the structured settlement payments to be
5transferred.
SB298,7,76 (c) The discounted present value of the structured settlement payments to be
7transferred.
SB298,7,98 (d) The discount rate used in determining the discounted present value of the
9structured settlement payments to be transferred.
SB298,7,1110 (e) The gross amount payable to the payee in exchange for the structured
11settlement payments to be transferred.
SB298,7,1412 (f) An itemized listing of all charges, commissions, costs, expenses and fees
13payable by the payee or deductible from the gross amount otherwise payable to the
14payee in exchange for the structured settlement payments being transferred.
SB298,7,1615 (g) The net amount payable to the payee after the deduction of all of the
16amounts described under par. (f).
SB298,7,1917 (h) The number, expressed as a percentage, obtained by dividing the net
18payment amount under par. (g) by the discounted present value of the structured
19settlement payments to be transferred under par. (c).
SB298,7,2220 (i) The amount of any penalty and the maximum amount of any liquidated
21damages that the payee could be required to pay in the event of the payee's breach
22of the transfer agreement.
SB298,7,24 23(6) The extraordinary, unanticipated and imminent needs of the payee or his
24or her dependents make the transfer appropriate.
SB298,8,2
1(7) The payee has received independent professional advice regarding the
2legal, tax and financial implications of the transfer.
SB298,8,4 3(8) If the transfer would contravene the terms of the structured settlement, all
4of the following conditions are met:
SB298,8,115 (a) The transfer has been expressly approved in writing by each interested
6party, except that if at the time that the payee and the transferee entered into the
7transfer agreement, a favorable tax determination was in effect, then the approval
8of the annuity issuer and the structured settlement obligor is not required under this
9paragraph if all of the other interested parties approve the transfer and waive any
10rights to require that the transferred payments be made to the payee in accordance
11with the terms of the structured settlement.
SB298,8,1512 (b) The transfer has been expressly approved in writing by any court or
13governmental unit that previously approved the structured settlement, other than
14the court or responsible administrative authority from which approval of the
15transfer is sought under this section.
SB298,8,1916 (c) Signed originals of all approvals required under pars. (a) and (b) have been
17filed with the court or responsible administrative authority from which approval of
18the transfer is sought under this section and copies of those approvals have been
19provided to all the interested parties.
SB298,8,23 20(9) The transferee has given written notice of the transferee's name, address
21and taxpayer identification number to the annuity issuer and the structured
22settlement obligor and has filed a copy of that notice with the court or responsible
23administrative authority that has been asked to approve the transfer.
SB298,9,3
1787.03 Procedure for approving the transfer of the structured
2settlement payment right. (1)
The circuit court shall have nonexclusive
3jurisdiction over any application for the approval of a transfer under s. 787.02 (2).
SB298,9,8 4(2) Not less than 20 days before a scheduled hearing before a court or
5responsible administrative authority on any application for approval of a transfer of
6a structured settlement payment right, the transferee shall file a notice of the
7proposed transfer and an application for approval of the transfer with the court or
8responsible administrative authority.
SB298,9,14 9(3) Not less than 20 days before a scheduled hearing before a court or
10responsible administrative authority on any application for approval of a transfer of
11a structured settlement payment right, the transferee shall serve notice of the
12proposed transfer and an application for approval of the transfer on any other
13governmental unit that previously approved the structured settlement and on all
14interested parties.
SB298,9,15 15(4) The notice under sub. (3) shall include all of the following:
SB298,9,1616 (a) A copy of the transferee's application.
SB298,9,1717 (b) A copy of the proposed transfer agreement.
SB298,9,1818 (c) A copy of the disclosure statement required under s. 787.02 (4).
SB298,9,2219 (d) A statement that any interested party may support, oppose or otherwise
20respond to the transferee's application, either personally or by counsel, by
21submitting written comments to the court or responsible administrative authority
22or by participating at the hearing.
SB298,9,2523 (e) A statement of the time and place of the hearing and of the manner in which
24and time by which written responses to the transferee's application shall be filed in
25order to be considered by the court or responsible administrative authority.
SB298,10,3
1(5) Interested parties may file written responses to the transferee's application
2with the court or responsible administrative authority within 15 days after receipt
3of the notice under sub. (3).
SB298,10,5 4787.04 Waiver. The rights and responsibilities created under this chapter may
5not be waived.
SB298,10,11 6787.05 Exemption from penalties and fees. A payee who proposes to make
7a transfer of a structured settlement payment right shall not be required to pay the
8proposed transferee any penalty, forfeit any application fee or other payment made
9to the proposed transferee or incur any liability to the proposed transferee as the
10result of the failure of the proposed transfer agreement to meet the conditions under
11s. 787.02.
SB298,10,15 12787.06 Construction of chapter. This chapter shall not be construed to
13authorize any transfer of a structured settlement payment right in contravention of
14any applicable law or to give effect to any transfer of a structured settlement
15payment right that is invalid under any applicable law.
SB298, s. 2 16Section 2. Initial applicability.
SB298,10,1817 (1) This act first applies to the transfer of a structured settlement payment
18right under a transfer agreement entered into on the effective date of this subsection.
SB298, s. 3 19Section 3. Effective date.
SB298,10,2120 (1) This act takes effect on the first day of the 2nd month beginning after
21publication.
SB298,10,2222 (End)
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