Colonial pays cash for structured settlements!

California statues regarding Structured Settlements. This state statute overseeing the sale of structured settlement payments and the buying of annuities is basically the Model Act with some additional" consumer protections"and complies with Federal Law (Colonial's interpretation) WEST'S ANNOTATED CALIFORNIA CODES INSURANCE CODE DIVISION 2. CLASSES OF INSURANCE PART 2. LIFE AND DISABILITY INSURANCE CHAPTER 1. THE CONTRACT ARTICLE 2.3. TRANSFERS OF STRUCTURED SETTLEMENT PAYMENT RIGHTS

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Current through ch. 64 of 2002 Reg.Sess. urgency
legislation & ch. 3 of 3rd Ex.Sess. & March 5, 2002 election

§ 10134. Definitions

For the purposes of this article, the following terms have the following meanings:

(a) "Buyer's first right of refusal" means any provision in the transfer agreement or related documents that obligate
the payee to give to the buyer the first choice or option to purchase any remaining structured settlement rights
belonging to the payee.

(b) "Dependents" include the payee's spouse and minor children and all other family members and other persons for
whom the payee is legally obligated to provide support, including alimony.

(c) "Discounted present value" means the fair present value of future payments, as determined by discounting those
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.

(d) "Effective equivalent interest rate," with respect to a transfer of structured settlement payment rights, means
the annualized rate of interest on the net advance amount, calculated by treating the transferred structured
settlement payments as if they were installment payments on a loan, with each payment applied first to accrued
unpaid interest and then to principal.

(e) "Expenses" means all broker's commissions, service charges, application or processing fees, closing costs, filing
or administrative charges, legal fees, notary fees and other commissions, fees, costs, and charges that a payee would
have to pay to transfer the structured settlement payment rights of a structured settlement agreement or that
would be deducted from the gross consideration that would be paid to the payee in connection with the transfer of
the structured settlement payment rights of a structured settlement agreement.

(f) "Independent professional advice" means advice of an attorney, certified public accountant, actuary, or other
licensed professional adviser meeting all of the following requirements:

(1) The adviser is engaged by a claimant or payee to render advice concerning the legal, tax, or financial
implications of a structured settlement or a transfer of structured settlement payment rights.

(2) The adviser's compensation for rendering independent professional advice is not affected by occurrence or lack
of occurrence of a settlement or transfer.

(3) A particular adviser is not referred to the payee by the transferee or its agent, except that the transferee may refer
the payee to a lawyer referral service or agency operated by a state or local bar association.

(g) "Interested parties" means, with respect to a structured settlement agreement, the payee, the payee's attorney,
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 who has continuing rights or obligations under the
structured settlement agreement. If the designated beneficiary is a minor, the beneficiary's parent or guardian shall
be an interested party.

(h) "Payee" means an individual who received tax-free payments pursuant to a structured settlement agreement.

(i) "Qualified assignment agreement" means an agreement providing for a qualified assignment within the meaning
of Section 130 of Title 26 of the United States Code, as amended from time to time.

(j) "Structured settlement agreement" means an arrangement for periodic payment of damages established by
settlement or judgment in resolution of a tort claim in which the payment of the judgment or award is paid in whole,
or in part, in periodic tax-free payments rather than a lump-sum payment. A structured settlement agreement
entered into pursuant to Section 667.7 of the Code of Civil Procedure or Section 970.6 or 984 of the Government
Code is not subject to the provisions of this article other than the requirements of Section 10138.

(k) "Structured settlement obligor" means the party that has the continuing periodic payment obligation to the
payee under a structured settlement agreement or a qualified assignment agreement.

(l) "Structured settlement payment rights" means rights to receive periodic payments, including lump-sum
payments, pursuant to a structured settlement agreement, whether from the settlement obligor or an annuity issuer.

(m) "Terms of the structured settlement" include, with respect to a structured settlement agreement, the terms of
the structured settlement agreement, annuity contract, qualified assignment agreement, and any order or approval
of a court or responsible administrative authority or other governmental authority authorizing or approving the
structured settlement.

(n) "Transfer" means any sale, assignment, pledge, hypothecation, or other form of alienation or encumbrance made
for consideration.

(o) "Transfer agreement" means the agreement providing for the transfer, and any other document used to effectuate
the transfer, from the payee to the transferee of structured settlement payment rights of a structured settlement
agreement.

(p) "Transferee" means any person receiving structured settlement payment rights resulting from a transfer.

§ 10135. Application of article

(a) This article is only applicable to transfers entered into on or after January 1, 2000.

(b) Notwithstanding subdivision (a), the changes to this article made by the act amending this section in the 2001-
02 Regular Session shall only be applicable to transfers entered into on or after January 1, 2002. [FN1]

§ 10136. Required disclosures; notice of proposed transfer

No transfer of structured settlement payment rights, either directly or indirectly, shall be effective by a payee
domiciled in this state, or by a payee entitled to receive payments under a structured settlement funded by an
insurance contract issued by an insurer domiciled in this state or owned by an insurer or corporation domiciled in
this state, and no structured settlement obligor or annuity issuer shall be required to make any payment directly or
indirectly to a transferee, unless all of the following subdivisions are satisfied:

(a) Ten or more days prior to the effective date of a transfer agreement, the transferee provides the payee with a
separate written disclosure statement, in at least 14-point boldface type, disclosing all of the following:

(1) The effective date of the transfer.

(2) The amounts and due dates of the structured settlement payments to be transferred.

(3) The aggregate amount of the structured settlement payments to be transferred.

(4) The gross amount of all expenses, if any, to be deducted from the amount to be paid to the payee in exchange
for the payments to be transferred.

(5) The amount payable to the payee, net of all expenses, in exchange for the payments to be transferred.

(6) The discounted present value of all structured settlement payments to be transferred and the discount rate used
in determining that discounted present value.

(7) The effective equivalent interest rate, which shall be disclosed in the following statement:

"YOU WILL BE PAYING THE EQUIVALENT TO AN INTEREST RATE OF __________ % PER YEAR.

Based on the net amount that you will receive from us and the amounts and timing of the structured settlement
payments that you are transferring to us, if the transferred structured settlement payments were installment
payments on a loan, with each payment applied first to accrued unpaid interest and then to principal, it would be as
if you were paying interest to us of __________ % per year, assuming funding on the effective date of transfer. "

(8) The quotient (expressed as a percentage) obtained by dividing the net payment amount by the discounted
present value of the payments.

(9) A statement that the payee should obtain independent professional advice regarding any federal and state
income tax consequences arising from the proposed transfer, and that the transferee may not refer the payee to any
specific adviser for that purpose.

(10) A statement of the payee's irrevocable and nonwaivable right of rescission pursuant to paragraph (2) of
subdivision (b).

(11) The following statement in capital letters: "IF YOU BELIEVE YOU WERE TREATEDUNFAIRLY OR
WERE MISLED AS TO THE NATURE OF THE OBLIGATIONS YOU ASSUMED UPON ENTERING INTO
THIS AGREEMENT, YOU SHOULD REPORT THOSE CIRCUMSTANCES TO YOUR LOCAL DISTRICT
ATTORNEY OR THE OFFICE OF THE ATTORNEY GENERAL."

(12) If court approval of the transfer agreement is required, all of the following shall apply:

(A) The effective date of the transfer agreement shall be deemed to be the date that the agreement was signed by the
payee.

(B) The payee shall be advised that payment to the payee pursuant to the transfer agreement is contingent upon
court approval of the transfer agreement.

(C) The payee shall be advised that payment to the payee pursuant to the transfer agreement will be delayed up to
30 days or more in order for the court to review and approve the transfer agreement.

No contract for the transfer of structured settlement payment rights shall be valid unless the seller has separately
acknowledged that he or she has read all of the disclosures required by this subdivision.

(b)(1) The transferee provides written notice of the proposed transfer to all other interested parties 10 or more days
prior to the date specified in the transfer agreement as the date on which the transfer agreement first becomes
binding upon the payee and 60 or more days prior to the date on which the first payment is due under a schedule
established by the structured settlement agreement.

Notice shall not be required by this paragraph if court approval of the transfer is required and notice is given
pursuant to paragraph (6) of subdivision (c) of Section 10139.5.

(2) At any time prior to the date on which the transfer agreement first becomes binding upon the payee, the payee
may cancel the transfer agreement without cost or further obligation, by providing written notice of cancellation to
the transferee.

(3) The notice to interested parties shall include the effective date of the transfer and identify the structured
settlement payment rights being transferred and the due dates of those payments.

(4) Any notice required by this subdivision shall be deemed to have been given if addressed to the recipient's last
known address and deposited, first-class postage prepaid, in the United States mail not less than five calendar days
prior to the date on which the notice is required to be provided.

(c) The contract for transferring the structured settlement payment rights does not violate the provisions of
Section 10138.

§ 10137. Required conditions

A transfer of structured settlement payment rights is void unless all of the following conditions are met:

(a) The transfer of the structured settlement payment rights is fair and reasonable and in the best interest of the
payee, taking into account the welfare and support of his or her dependents.

(b) The transfer complies with the requirements of this article and will not contravene other applicable law.

(c) Notice is given in compliance with subdivision (b) of Section 10136 or, when applicable, court approval of the
transfer is required and notice is given pursuant to paragraph (6) of subdivision (c) of Section 10139.5.