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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§ 10138. Prohibited provisions; waiver

(a) A transfer agreement, as defined in subdivision (o) of Section 10134, shall not include any provision described
in the paragraphs below. Any inclusion of a prohibited provision, with respect to a seller who is a California
resident, shall make the contract void and unenforceable.

(1) Any provision that waives the seller's right to sue under any law, or in which the seller agrees not to sue, or that
waives jurisdiction or standing to sue under the contract.

(2) Any provision that requires the seller to indemnify and hold harmless the buyer, or to pay the buyer's costs of
defense, in any claim or action brought by the seller or on the seller's behalf contesting the sale for any reason.

(3) Any provision that waives benefits or rights conferred by law with respect to garnishment of wages.

(4) Any provision providing that the contract is confidential or proprietary, belonging to the buyer.

(5) Any provision in which the seller stipulates to a confession of judgment.

(6) Any provision requiring the seller to pay the buyer's attorney's fees and costs if the purchase agreement is not
completed.

(7) Any provision requiring the seller to pay any tax liability arising under the federal tax laws, other than the
seller's own tax liability, if any, that results from the transfer.

(8) Any provision providing for brokerage fees incurred in the contract to be deducted from the purchase price
disclosed pursuant to paragraph (5) of subdivision (a) of Section 10136.

(9) Any forum selection provision providing for jurisdiction to be in a court outside of California for any action
arising under the contract.

(10) Any choice-of-law provision that provides for controlling law to be other than California law in any action
arising under the contract.

(11) A provision that provides the transferee with a security interest or collateral interest in any structured
settlement payment rights that exceed the actual dollar amount of the structured settlement payment rights being
transferred.

(12) Any provision that creates a "buyer's first right of refusal" to purchase any remaining structured payment rights
that the payee may desire to sell in the future.

(b) The provisions in this section may not be waived by agreement of the parties.

§ 10139. Filing of documents with attorney general; fee

(a) At the time notice is provided to interested parties pursuant to subdivision (b) of Section 10136, or subdivision
(c) of Section 10137, or, when applicable, at the time of filing a petition pursuant to paragraph (5) of subdivision (c)
of Section 10139.5 for court approval when court approval of the transfer agreement is required, the transferee shall
file with the Attorney General a copy of the transferee's petition for approval, a copy of the written disclosure
statement required by subdivision (a) of Section 10136, a copy of the transfer agreement as defined in subdivision
(o) of Section 10134, a copy of the annuity contract, a copy of any qualified assignment agreement, a copy of the
underlying structured settlement agreement, a copy of any order or approval of any court or responsible
administrative authority authorizing or approving the structured settlement, a copy and proof of notice to the
interested parties, and a verified statement from the transferee stating that all of the conditions set forth in Sections
10136, 10137, and 10138 have been met.

(b) The Attorney General may, but is not required to, review any transfer agreement in order to ensure that the
transfer meets the requirements of this article.

(c) The Attorney General may charge a reasonable fee for the filing of the transfer agreement as provided in this
section. The fee shall be paid by the transferee.

§ 10139.1. Subsequent transfers

Any subsequent transfer of any additional structured settlement payments between the payee and transferee may
be made only after compliance with all of the requirements of this article.

§ 10139.2. Mailing of notice

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

§ 10139.3. Waiver; transferee's responsibility; prohibited penalties; tax liability; division of payments

(a) None of the provisions of this article may be waived.

(b) Compliance with the requirements set forth in Sections 10136, 10137, and 10138 shall be solely the
responsibility of the transferee in any transfer of structured settlement payment rights.

(c) A payee who proposes to make a transfer of structured settlement payment rights shall not incur any penalty,
shall not forfeit any application fee or other payment, and shall not otherwise incur any liability to the proposed
transferee based on any failure of that transfer to satisfy the requirements of Sections 10136, 10137, and 10138.

(d) The transferee and any assignee shall be liable to the structured settlement obligor and the annuity issuer for
any and all taxes incurred as a consequence of the transfer or as a consequence of any failure of the transferee or
assignee to comply with this article or the terms of the structured settlement agreement.

(e) Neither the annuity issuer nor the structured settlement obligor may be required to divide any structured
settlement payment between the payee and any transferee or assignee or between two or more transferees or
assignees.

§ 10139.4. Unfair business practices

A violation of this article by a transferee shall constitute an unfair business practice pursuant to Chapter 5
(commencing with Section 17200) of Part 2 of Division 7 of the Business and Professions Code and shall be subject
to the penalties and other remedies of that chapter.

§ 10139.5. Court approval of transfers; filing of court orders; report

(a) This section shall become operative only upon enactment into law of amendments to the Federal Internal
Revenue Code to impose an excise tax on a transfer of structured settlement payment rights if the transfer is not
approved by a court.

This section shall remain in effect only until January 1, 2005, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2005, deletes or extends that date.

(b) A direct or indirect transfer of structured settlement payment rights is not effective and a structured
settlement obligor or annuity issuer is not 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 based
on express findings by the court 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 that advice or knowingly waived that advice in writing.

(3) The transferee has provided the payee with a disclosure form consistent with Section 10136 and the transfer
agreement complies with Section 10138.

(4) The transfer does not contravene any applicable statute or the order of any court or other government authority.

(c) Following a transfer of structured settlement payment rights under this article:

(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 if the transfer
contravenes the terms of the structured settlement for the following:

(A) Any taxes incurred by those parties as a consequence of the transfer.

(B) Any other liabilities or costs, including reasonable costs and attorneys' fees, arising from compliance by those
parties with the order of the court or arising as a consequence of the transferee's failure to comply with this article.

(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.

(4) Any further transfer of structured settlement payment rights by the payee may be made only after compliance
with all of the requirements of this article.

(5) An application under this article for approval of a transfer of structured settlement payment rights shall be
made by the transferee and brought in the county in which the payee resides if the payee is a resident of California.
If the payee is not a resident of California, the application for approval of a transfer of structured settlement
payment rights shall be made by the transferee and may be brought as follows:

(A) In the county in which the payee resides.

(B) In the county in which the structured settlement obligor or the annuity issuer maintains its principal place of
business.

(C) In any court that approved the structured settlement agreement.

(6) Not less than 20 days prior to the scheduled hearing on any application for approval of a transfer of structured
settlement payment rights under this article, the transferee shall file with the court and serve on all interested parties
a notice of the proposed transfer and the application for its authorization, and shall include the following with that
notice:

(A) A copy of the transferee's application.

(B) A copy of the transfer agreement.

(C) A listing of each of the payee's dependents, together with each dependent's age.

(D) A copy of the disclosure required in subdivision (a) of Section 10136.

(E) A copy of the annuity contract.

(F) A copy of any qualified assignment agreement.

(G) A copy of the underlying structured settlement agreement.

(H) 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 by participating in the
hearing.

(I) 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 may not be less than 15 days after service of the
transferee's notice, in order to be considered by the court .

(7) All court costs and filing fees shall be paid by the transferee.

(8) No later than the time of filing the petition for court approval, the transferee shall advise the payee of the payee's
right to seek counsel in connection with the transferee's petition for court approval of the transfer agreement, and
shall further advise the payee that if the payee retains counsel in connection with a petition for an order approving
the transfer agreement, that the transferee shall pay the payee's counsel's fees, regardless of whether the transfer
agreement is approved, in an amount not to exceed one thousand five hundred dollars ($1,500).

(d) The transferee shall, within 30 days of obtaining final court approval, file with the Attorney General a copy of
any final court order approving or denying the transfer of structured settlement payment rights. The transferee
shall specify in written form the following information:

(1) Whether the payee was represented by an attorney and the costs paid or owed to that attorney by the transferee
and, if known, by the payee.

(2) The county and judicial district where the court approval was filed.

(3) For approved agreements, whether any changes were made to the transfer agreement.

(4) For rejected agreements, the general category for the rejection.

(5) The total court costs and attorney's fees paid by the transferor to obtain court approval.

(6) The purchase prices of the transfer agreement and its effective interest rate.

(e) Not later than March 31, 2004, the Attorney General shall file a report with the Legislature to assist in the
evaluation of the impact of this section. The report shall include, based on information the Attorney General has
received from transferees, the following:

(1) The number of petitions filed.

(2) The number of petitions approved without change.

(3) The number of petitions approved with changes and the general category of the changes requested.

(4) The number of petitions rejected and the general categories for rejection.

(5) The range of purchase prices, mean purchase price, median purchase price mean, effective interest rate and
median effective interest rate.

(6) The number of petitions in which the payee was represented by counsel, and if known, the amount of
compensation paid to counsel by the transferee and the payee.

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