Oklahoma Structured Settlements Law

Yes, you can trade Oklahoma structured settlement payments for upfront cash.

Statute and Bill #: 12 Okl. St. § 3239 (OK S.B. 545)
Enacted 4/10/2001 Effective 11/1/2001
Summary: Permits the sale or assignment of Oklahoma structured settlement payment rights, subject to a court's review and approval based on showing that the proposed transfer is in the consumer's "best interests," taking into account the welfare of the consumer's dependents (if any). Requires certain disclosures and other consumer protections.


Full Text Of Bill:

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:

SECTION 1. NEW LAW A new section of law to be codified in the Oklahoma Statutes

as Section 3238 of Title 12, unless there is created a duplication in

numbering, reads as follows:

This act shall be known and may be cited as the "Structured Settlement

Protection Act of 2001".

SECTION 2. NEW LAW A new section of law to be codified in the Oklahoma

Statutes as Section 3239 of Title 12, unless there is created a duplication in

numbering, reads as follows:

As used in the Structured Settlement Protection Act of 2001:

1. "Annuity issuer" means an insurer that has issued a contract to fund

periodic payments under a structured settlement;

2. "Dependents" include a payee's spouse and minor children and all other

persons for whom the payee is legally obligated to provide support, including

alimony;

3. "Discounted present value" means the present value of future payments

determined by discounting the payments to the present using the most recently

published applicable federal rate for determining the present value of an

annuity, as issued by the United States Internal Revenue Service;

4. "Gross advance amount" means the sum payable to the payee or for the payee's

account as consideration for a transfer of structured settlement payment

rights before any reductions for transfer expenses or other deductions to be

made from the consideration;

5. "Independent professional advice" means advice of an attorney, certified

public accountant, actuary or other licensed professional adviser;

6. "Interested parties" means, with respect to any structured settlement, the

payee, any beneficiary irrevocably 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 structured settlement;

7. "Net advance amount" means the gross advance amount less the aggregate

amount of the actual and estimated transfer expenses required to be disclosed

under paragraph 5 of Section 3 of this act;

8. "Payee" means an individual who is receiving tax-free payments under a

structured settlement and proposes to make a transfer of the payment rights;

9. "Periodic payments" includes both recurring payments and scheduled future

lump sum payments;

10. "Qualified assignment agreement" means an agreement providing for a

qualified assignment within the meaning of section 130 of the United States

Internal Revenue Code, United States Code Title 26, as amended from time to

time;

11. "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 the structured settlement;

12. "Settled claim" means the original tort claim or workers compensation claim

resolved by a structured settlement;

13. "Structured settlement" means an arrangement for periodic payment of

damages for personal injuries or sickness established by settlement or judgment

in resolution of a tort claim or for periodic payments in settlement of a

workers compensation claim;

14. "Structured settlement agreement" means the agreement, judgment,

stipulation, or release embodying the terms of a structured settlement;

15. "Structured settlement obligor" means, with respect to any structured

settlement, the party that has the continuing obligation to make periodic

payments to the payee under a structured settlement agreement or a qualified

assignment agreement;

16. "Structured settlement payment rights" means rights to receive periodic

payments under a structured settlement, whether from the structured settlement

obligor or the annuity issuer, where:

a. the payee is domiciled in, or the domicile or principal place of business of

the structured settlement obligor or the annuity issuer is located in this

state,

b. the structured settlement agreement was approved by a court or responsible

administrative authority in this state, or

c. the structured settlement agreement is expressly governed by the laws of

this state;

17. "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 other

approval of any court or responsible administrative authority or other

government authority that authorized or approved such structured settlement;

18. " Transfer " means any sale, assignment, pledge, hypothecation or other

alienation or encumbrance of structured settlement payment rights made by a

payee for consideration; provided that the term " transfer " does not include

the creation or perfection of a security interest in structured settlement

payment rights under a blanket security agreement entered into with an insured

depository institution, in the absence of any action to redirect the structured

settlement payments to the insured depository institution, or an agent or

successor in interest thereof, or otherwise to enforce the blanket security

interest against structured settlement payment rights;

19. " Transfer agreement" means the agreement providing for a transfer of

structured settlement payment rights;

20. " Transfer expenses" means all expenses of a transfer that are required

under the transfer agreement to be paid by the payee or deducted from the gross

advance amount, including, without limitation, court filing fees, finders fees,

commissions, and other payments to a broker or other intermediary; "transfer

expenses" do not include preexisting obligations of the payee payable for the

payee's account from the proceeds of a transfer; and

21. "Transferee" means a party acquiring or proposing to acquire structured

settlement payment rights through a transfer;

SECTION 3. NEW LAW A new section of law to be codified in the Oklahoma Statutes

as Section 3240 of Title 12, unless there is created a duplication in

numbering, reads as follows:

Not less than three (3) days prior to the date on which a payee signs a

transfer agreement, the transferee shall provide to the payee a separate

disclosure statement, in bold type no smaller than fourteen (14) point, to

include the following:

1. The amounts and due dates of the structured settlement payments to be

transferred;

2. The aggregate amount of the payments;

3. The discounted present value of the payments to be transferred, which shall

be identified as the "calculation of current value of the transferred

structured settlement payments under federal standards for valuing annuities",

and the amount of the applicable federal rate used in calculating such

discounted present value;

4. The gross advance amount;

5. An itemized listing of all applicable transfer expenses, other than

attorneys fees and related disbursements payable in connection with the

transferee's application for approval of the transfer, and the transferee s

best estimate of the amount of any such fees and disbursements;

6. The net advance amount;

7. The amount of any penalties or liquidated damages payable by the payee in

the event of any breach of the transfer agreement by the payee; and

8. A statement that the payee has the right to cancel the transfer agreement,

without penalty or further obligation, not later than the third business day

after the date the agreement is signed by the payee.

SECTION 4. NEW LAW A new section of law to be codified in the Oklahoma Statutes

as Section 3241 of Title 12, unless there is created a duplication in

numbering, reads as follows:

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 approved in

advance in a final court order or order of a responsible administrative

authority based on express findings by such court or responsible administrative

authority that:

1. The transfer is in the best interest of the payee, taking into account the

welfare and support of the payee's dependents;

2. The payee has been advised in writing by the transferee to seek independent

professional advice regarding the transfer and has either received the advice

or knowingly waived the advice in writing; and

3. The transfer does not contravene any applicable statute or the order of any

court or other government authority.

SECTION 5. NEW LAW A new section of law to be codified in the Oklahoma Statutes

as Section 3242 of Title 12, unless there is created a duplication in

numbering, reads as follows:

Following a transfer of structured settlement payment rights under the

Structured Settlement Protection Act of 2001:

1. The structured settlement obligor and the annuity issuer shall, as to all

parties except the transferee, be discharged and released from any and all

liability for the transferred payments;

2. The transferee shall be liable to the structured settlement obligor and the

annuity issuer:

a. if the transfer contravenes the terms of the structured settlement, for any

taxes incurred by such parties as a consequence of the transfer, and

b. for any other liabilities or costs, including reasonable costs and attorneys

fees, arising from compliance by the parties with the order of the court or

responsible administrative authority or arising as a consequence of the

transferee's failure to comply with this act;

3. Neither the annuity issuer nor the structured settlement obligor may be

required to divide any periodic payment between the payee and any transferee or

assignee or between two or more transferees or assignees; and

4. Any further transfer of structured settlement payment rights by the payee

may be made only after compliance with all of the requirements of the

Structured Settlement Protection Act of 2001.

SECTION 6. NEW LAW A new section of law to be codified in the Oklahoma Statutes

as Section 3243 of Title 12, unless there is created a duplication in

numbering, reads as follows:

A. An application under the Structured Settlement Protection Act for approval

of a transfer of structured settlement payment rights shall be made by the

transferee and may be brought in the county in which the payee resides, in the

county in which the structured settlement obligor or the annuity issuer

maintains its principal place of business, or in any court or before any

responsible administrative authority which approved the structured settlement

agreement.

B. Not less than twenty (20) days prior to the scheduled hearing on any

application for approval of a transfer of structured settlement payment rights

under Section 4 of this act, the transferee shall file with the court or

responsible administrative authority and serve on all interested parties a

notice of the proposed transfer and the application for its authorization,

including with 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 Section 3 of this act;

4. A listing of each of the payee's dependents, together with each dependent's

age;

5. 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

6. 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, which shall be not less than fifteen (15) days after service of the

transferee's notice, in order to be considered by the court or responsible

administrative authority.

SECTION 7. NEW LAW A new section of law to be codified in the Oklahoma Statutes

as Section 3244 of Title 12, unless there is created a duplication in

numbering, reads as follows:

A. The provisions of the Structured Settlement Protection Act of 2001 may not

be waived by any payee.

B. Any transfer agreement entered into on or after the effective date of this

act by a payee who resides in this state shall provide that disputes under such

transfer agreement, including any claim that the payee has breached the

agreement, shall be determined in and under the laws of this state. No such

transfer agreement shall authorize the transferee or any other party to confess

judgment or consent to entry of judgment against the payee.

C. No transfer of structured settlement payment rights shall extend to any

payments that are life-contingent unless, prior to the date on which the payee

signs the transfer agreement, the transferee has established and has agreed to

maintain procedures reasonably satisfactory to the annuity issuer and the

structured settlement obligor for:

1. Periodically confirming the payee's survival; and

2. Giving the annuity issuer and the structured settlement obligor prompt

written notice in the event of the payee's death.

D. 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 or any assignee

based on any failure of such transfer to satisfy the conditions of this act.

E. Nothing contained in this act shall be construed to authorize any transfer

of structured settlement payment rights in contravention of any law or to imply

that any transfer under a transfer agreement entered into prior to the

effective date of this act is valid or invalid.

F. Compliance with the requirements set forth in Section 3 of this act and

fulfillment of the conditions set forth in Section 4 of this act shall be

solely the responsibility of the transferee in any transfer of structured

settlement payment rights, and neither the structured settlement obligor nor

the annuity issuer shall bear any responsibility for, or any liability arising

from, noncompliance with such requirements or failure to fulfill such

conditions.

SECTION 8. NEW LAW A new section of law to be codified in the Oklahoma Statutes

as Section 3245 of Title 12, unless there is created a duplication in

numbering, reads as follows:

This act shall apply to any transfer of structured settlement payment rights

under a transfer agreement entered into on or after the thirtieth day after the

date of enactment of this act; provided that nothing contained herein shall

imply that any transfer under a transfer agreement reached prior to such date

is either effective or ineffective.

SECTION 9. This act shall become effective November 1, 2001.