Every year in America, 3.3 million people suffer from a workplace injury
“Every year in America, 3.3 million people suffer from a workplace injury from which they may never recover.” (US Dept. of Labor. Secretary of Labor Hilda Soils. 2011.)
Maybe you were one of these people and now you’d like to sell a portion or all of your payments to pay some serious debt. Or maybe you are one of the Insurance Companies that underwrote the structured settlement that one of these 3.3 million people are receiving today and you are interested in participating in the transfer of payments of some of these annuities. Whatever the case, it is safe to say that the primary market for structured settlements is doing very well and is growing and the secondary market for structured settlements is a necessary evil and is not going anywhere. But how safe is it to transfer payments in our economy today?
How well could any market do in today’s economy? The International Monetary Fund (IMF) is cautioning us of a global recession and is stating we will hit a “soft patch” of growth for 2012. The growth for the U.S. alone, they forecast 2012 as having a cut in growth by 0.2%. (www.imf.org.2011)
The German ZEW’s economic think-tank sentiment index fell to -43.3 in September, which is the lowest reading in three years. (www.zew.de/en/. 2011.) The transportation strike is going strong in Athens and Japan’s exports are falling as we speak. (www.af.reuters.com).
Despite the grim global outlook, the U.S. economy is showing signs of strength and growth.
1. Fewer Americans applied for unemployment benefits just last week
2. Our Banks have almost $1 trillion in capital and only $54 billion in exposure to the weakest
Euro Zone countries. Even if the Euro Zone does completely default, our largest banks won’t
go under with them.
3. Our revenues and earnings are up! The S&P 500 rose 11% this October and it broke above its
200-day average on October 27.
There are more reasons why the U.S. economy is looking brighter: mergers and acquisitions are still happening, new business are suddenly sprouting up, credit card delinquency is down since 2008 and the housing market is showing signs of some recovery.
In addition to these reasons, specific to the structured settlement industry, major insurance providers are vying to get back in the annuities market – primary and secondary. So get with a good lawyer who is sensitive to our U.S. and the global economies, like Eugene Ahtirski.
North Carolina Structured Settlement Protection Act
Article 44B.
Structured Settlement Protection Act.
§ 1-543.10. Title.
This Article may be cited as the North Carolina Structured Settlement Protection Act.
(1999-367, s. 1.)
§ 1-543.11. Definitions.
For purposes of this Article:
(1) “Annuity issuer” means an insurer that has issued an annuity or insurance
contract used to fund periodic payments under a structured settlement;
(2) “Discounted present value” means the fair present value of future payments,
as determined by discounting such payments to the present utilizing the
tables adopted in Article 5 of Chapter 8 of the General Statutes;
(3) “Independent professional advice” means advice of an attorney, certified
public accountant, actuary, or other licensed or registered professional or
financial adviser:
a. Who is engaged by a payee to render advice concerning the legal,
tax, and financial implications of a transfer of structured settlement
payment rights;
b. Who is not in any manner affiliated with or compensated by the
transferee of such transfer; and
c. Whose compensation for rendering such advice is not affected by
whether a transfer occurs or does not occur;
(4) “Interested parties” means, with respect to any structured settlement, the
payee, any beneficiary designated under the annuity contract to receive
payments following the payee’s death, the annuity issuer, the structured
settlement obligor, and any other party that has continuing rights or
obligations under the terms of the structured settlement;
(5) “Payee” means an individual who is receiving tax-free damage payments
under a structured settlement and proposes to make a transfer of payment
rights thereunder;
(6) “Qualified assignment agreement” means an agreement providing for a
qualified assignment within the meaning of section 130 of the Internal
Revenue Code, United States Code Title 26, as amended from time to time;
(7) “Responsible administrative authority” means, with respect to a structured
settlement, any government authority vested by law with exclusive
jurisdiction over the settled claim resolved by such structured settlement;
(8) “Settled claim” means the original tort claim resolved by a structured
settlement;
(9) “Structured settlement” means an arrangement for periodic payment of
damages for personal injuries established by settlement or judgment in
resolution of a tort claim;
(10) “Structured settlement agreement” means the agreement, judgment,
stipulation, or release embodying the terms of a structured settlement,
including the rights of the payee to receive periodic payments;
(11) “Structured settlement obligor” means, with respect to any structured
settlement, the party that has the continuing periodic payment obligation to
the payee under a structured settlement agreement or a qualified assignment
agreement;NC General Statutes – Chapter 1 Article 44B 2
(12) “Structured settlement payment rights” means rights to receive periodic
payments (including lump-sum payments) under a structured settlement,
whether from the settlement obligor or the annuity issuer, where:
a. The payee is domiciled in this State;
b. The structured settlement agreement was approved by a court or
responsible administrative authority in this State; or
c. The settled claim was pending before the courts of this State when
the parties entered into the structured settlement agreement;
(13) “Terms of the structured settlement” include, with respect to any structured
settlement, the terms of the structured settlement agreement, the annuity
contract, any qualified assignment agreement, and any order or approval of
any court or responsible administrative authority or other government
authority authorizing or approving such structured settlement; and
(14) “Transfer” means any sale, assignment, pledge, hypothecation, or other form
of alienation or encumbrance made by a payee for consideration;
(15) “Transfer agreement” means the agreement providing for transfer of
structured settlement payment rights from a payee to a transferee. (1999-367,
s. 1.)
§ 1-543.12. Structured settlement payment rights.
No direct or indirect transfer of structured settlement payment rights shall be effective, and
no structured settlement obligor or annuity issuer shall be required to make any payment
directly or indirectly to any transferee of structured settlement payment rights unless the
transfer has been authorized in advance in a final order of a court of competent jurisdiction or a
responsible administrative authority based on express findings by such court or responsible
administrative authority that:
(1) The transfer complies with the requirements of this Article [of] law;
(2) Not less than 10 days prior to the date on which the payee first incurred any
obligation with respect to the transfer, the transferee has provided to the
payee a disclosure statement in bold type, no smaller than 14 point setting
forth:
a. The amounts and due dates of the structured settlement payments to
be transferred;
b. The aggregate amount of such payments;
c. The discounted present value of such payments;
d. The gross amount payable to the payee in exchange for such
payments;
e. An itemized listing of all brokers’ commissions, service charges,
application fees, processing fees, closing costs, filing fees,
administrative fees, legal fees, notary fees and other commissions,
fees, costs, expenses, and charges payable by the payee or deductible
from the gross amount otherwise payable to the payee;
f. The net amount payable to the payee after deduction of all
commissions, fees, costs, expenses, and charges described in
sub-subdivision e. of this subdivision;
g. The quotient (expressed as a percentage) obtained by dividing the net
payment amount by the discounted present value of the payments;
h. The discount rate used by the transferee to determine the net amount
payable to the payee for the structured settlement payments to be
transferred; andNC General Statutes – Chapter 1 Article 44B 3
i. The amount of any penalty and the aggregate amount of any
liquidated damages (inclusive of penalties) payable by the payee in
the event of any breach of the transfer agreement by the payee;
(3) The transfer is in the best interest of the payee;
(4) The payee has received independent professional advice regarding the legal,
tax, and financial implications of the transfer;
(5) The transferee has given written notice of the transferee’s name, address, and
taxpayer identification number to the annuity issuer and the structured
settlement obligor and has filed a copy of such notice with the court or
responsible administrative authority;
(6) The discount rate used in determining the net amount payable to the payee,
as provided in subdivision (2) of this section, does not exceed an annual
percentage rate of prime plus five percentage points calculated as if the net
amount payable to the payee, as provided in sub-subdivision (2)f. of this
section, was the principal of a consumer loan made by the transferee to the
payee, and if the structured settlement payments to be transferred to the
transferee were the payee’s payments of principal plus interest on such loan.
For purposes of this subdivision, the prime rate shall be as reported by the
Federal Reserve Statistical Release H.15 on the first Monday of the month in
which the transfer agreement is signed by both the payee and the transferee,
except when the transfer agreement is signed prior to the first Monday of
that month then the prime rate shall be as reported by the Federal Reserve
Statistical Release H.15 on the first Monday of the preceding month;
(7) Any brokers’ commissions, service charges, application fees, processing
fees, closing costs, filing fees, administrative fees, notary fees and other
commissions, fees, costs, expenses, and charges payable by the payee or
deductible from the gross amount otherwise payable to the payee do not
exceed two percent (2%) of the net amount payable to the payee;
(8) The transfer of structured settlement payment rights is fair and reasonable;
and
(9) Notwithstanding a provision of the structured settlement agreement
prohibiting an assignment by the payee, the court may order a transfer of
periodic payment rights provided that the court finds that the provisions of
this Article are satisfied.
If the court or responsible administrative authority authorizes the transfer pursuant to this
section, the court or responsible administrative authority shall order the structured settlement
obligor to execute an acknowledgment of assignment letter on behalf of the transferee for the
amount of the structured settlement payment rights to be transferred; provided, however,
structured settlement payment rights arising from a claim pursuant to Chapter 97 shall not be
authorized. (1999-367, s. 1; 1999-456, s. 67.)
§ 1-543.13. Jurisdiction.
(a) Where the structured settlement agreement was entered into after commencement of
litigation or administrative proceedings in this State, the court or administrative agency where
the action was pending shall have exclusive jurisdiction over any application for authorization
under this Article of a transfer of structured settlement payment rights.
(b) Where the structured settlement agreement was entered into prior to the
commencement of litigation or administrative proceedings, or after the commencement of
litigation outside this State, the Superior Court Division of the General Court of Justice shall
have nonexclusive original jurisdiction over any application for authorization under this Article
of a transfer of structured settlement payment rights. (1999-367, s. 1.)NC General Statutes – Chapter 1 Article 44B 4
§ 1-543.14. Procedure for approval of transfers.
(a) Where the structured settlement agreement was entered into after the
commencement of litigation or administrative proceedings in this State, the application for
authorization of a transfer of structured settlement rights shall be filed with the court or
administrative agency where the settled claim was pending as a motion in the cause.
(b) Where the structured settlement agreement was entered into prior to the
commencement of litigation or administrative proceedings, or after the commencement of
litigation or administrative proceedings outside this State, the application for authorization of a
transfer of structured settlement payment rights shall be filed in the superior court with proper
venue pursuant to Article 7 of this Chapter. The nature of the action shall be a special
proceeding governed by the provisions of Article 33 of this Chapter.
(c) Not less than 30 days prior to the scheduled hearing on any application for
authorization of a transfer of structured settlement payment rights under this Article, the
transferee shall file with the proper court or responsible administrative authority and serve on
any other government authority which previously approved the structured settlement, on all
interested parties as defined in G.S. 1-543.11(4), and on the Attorney General, a notice of the
proposed transfer and the application for its authorization, including in such notice:
(1) A copy of the transferee’s application;
(2) A copy of the transfer agreement;
(3) A copy of the disclosure statement required under G.S. 1-543.12(a)(2);
(4) Notification that any interested party is entitled to support, oppose, or
otherwise respond to the transferee’s application, either in person or by
counsel, by submitting written comments to the court or responsible
administrative authority or by participating in the hearing; and
(5) Notification of the time and place of the hearing and notification of the
manner in which and the time by which written responses to the application
must be filed in order to be considered by the court or responsible
administrative authority.
(d) The Attorney General shall have standing to raise, appear, and be heard on any
matter relating to an application for authorization of a transfer of structured settlement payment
rights under this Article. (1999-367, s. 1.)
§ 1-543.15. No waiver; penalties.
(a) The provisions of this Article may not be waived.
(b) Any payee who has transferred structured settlement payment rights to a transferee
without complying with this Article may bring an action against the transferee to recover actual
monetary loss or for damages up to five thousand dollars ($5,000) for the violation by the
transferee, or bring actions for both. The payee is entitled to attorneys’ fees and costs incurred
to enforce this Article. In addition, all unpaid structured settlement payment rights transferred
in violation of this Article by any transferee shall be reconveyed to the payee.
(c) No payee who proposes to make a transfer of structured settlement payment rights
shall incur any penalty, forfeit any application fee or other payment, or otherwise incur any
liability to the proposed transferee based on any failure of such transfer to satisfy the conditions
of this Article. (1999-367, s. 1.)
