Colonial pays cash for structured settlements!
Delaware statues
regarding Structured Settlements.
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This state statute overseeing the
sale of structured settlement payments and
the buying of annuities is not exactly the
Model Act but complies with Federal Law.
It does allow the Attorney General involvement.
(Colonial's interpretation)
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DELAWARE CODE ANNOTATED
TITLE 10. COURTS AND JUDICIAL PROCEDURE
PART IV. SPECIAL PROCEEDINGS
CHAPTER 66. STRUCTURED SETTLEMENTS
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Copyright © 1975-2001 by The State of Delaware. All
rights reserved.
Current through 2001 Regular Session of the 141st General
Assembly
§ 6601 Conditions to transfers of 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 responsible administrative
authority, based on express findings by such court or
responsible administrative authority that:
(1) the transfer complies with the requirements of
this chapter and will not contravene other
applicable 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 small
than
14 points, 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, together with the discount rate
used in
determining
such discounted present value;
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 subparagraph e. of this paragraph;
g. the quotient (expressed
as a percentage) obtained by dividing the net payment
amount by the
discounted
present value of the payments; and
h. 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 fair and reasonable and in the
best interests of the payee and the payee's
dependents;
(4) The payee has received independent professional
advice regarding the legal, tax and financial
implications of the transfer;
(5) If the transfer would contravene the terms of the
structured settlement:
a. The transfer has been
expressly approved in writing by:
1. Each interested party;
provided, however, that the approval of the annuity
issuer and the
structured settlement obligor shall not be required
if all other interested parties approve the transfer
and waive any and all rights to require that the transferred
payments be made to the payee in accordance
with the terms of the structured settlement; and
2. Any court or government
authority, other than the court or responsible administrative
authority from which authorization of the transfer is
sought under this chapter, which previously
approved the structured settlement; and
b. Signed originals of
all approvals required under subparagraph a. of this
paragraph have been
filed with the court or responsible administrative authority
from which authorization of the transfer is
sought under this chapter, and originals or copies have
been furnished to all interested parties; and
(6) 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.
§ 6602 Definitions.
The following words, terms and phrases, when used in
this chapter, shall have the meanings ascribed to
them, except where the context clearly indicates a different
meaning:
(a) "Annuity issuer" shall mean an insurer that has
issued an insurance contract used to fund periodic
payments under a structured settlement;
(b) "Applicable law" shall mean:
(1) The federal laws
of the United States;
(2) The laws of this
State, including principles of equity applied in the
courts of this State; and
(3) The laws of any other
jurisdiction:
a. Which is the domicile
of the payee or any other interested party;
b. Under whose laws a
structured settlement agreement was approved by a court;
or
c. In whose courts a
settled claim was pending when the parties entered into
a structured
settlement
agreement;
(c) "Dependents" shall include a 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;
(d) "Discounted present value" shall mean the fair
present value of future payments, as determined by
discounting such 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;
(e) "Favorable tax determination" shall mean, with
respect to a proposed transfer of structured
settlement payment rights, any of the following authorities
that definitively establishes that the federal
income tax treatment of the structured settlement for
the parties to the structured settlement
agreement and any qualified assignment agreement, other
than the payee, will not be affected by such
transfer:
(1) A provision of the
United States Internal Revenue Code, United States Code
Title 26 [26 U.S.C.S. § 130],
as amended from time to time, or a United States Treasury
regulation adopted pursuant thereto;
(2) A revenue ruling
or revenue procedure issued by the United States Internal
Revenue Service;
(3) A private letter
ruling by the United States Internal Revenue Service
with respect to such transfer;
(4) A decision of the
United States Supreme Court or a decision of a lower
federal court in which
the United States Internal Revenue Service has acquiesced;
(f) "Federal hardship standard" shall mean a federal
standard applicable to transfers of structured
settlement payment rights based on findings of a court
or responsible administrative authority regarding
the payees' needs, as contained in the United States
Internal Revenue Code, United States Code Title 26,
as amended from time to time, or in a United States
Treasury regulation adopted pursuant thereto;
(g) "Independent professional advice" shall mean the
advice of an attorney, certified public
accountant, actuary or other licensed professional adviser:
(1) Who is engaged by
a payee to render advice concerning the legal, tax and
financial
implications of a transfer of structured settlement
payment rights;
(2) Who is not in any manner affiliated with or compensated
by the transferee of such transfer; and
(3) Whose compensation for rendering such advice is
not affected by whether a transfer occurs
or does not occur.
(h) "Interested parties" shall mean, 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 such structured settlement;
(i) "Payee" shall mean an individual who is receiving
tax-free damage payments under a structured
settlement and proposes to make a transfer of payment
rights thereunder;
(j) "Qualified assignment agreement" shall mean an
agreement providing for a qualified assignment
within the meaning of § 130 of the United States Internal
Revenue Code, United States Code Title 26
(26 U.S.C.S. § 130), as amended from time to time;
(k) "Responsible administrative authority" shall mean,
with respect to a structured settlement, any
government authority vested by law with exclusive jurisdiction
over the settled claim resolved by such
structured settlement;
(l) "Settled claim" shall mean the original tort claim
or workers' compensation claim resolved by a
structured settlement;
(m) "Structured settlement" shall mean an arrangement
for periodic payment of damages for
personal injuries established by settlement or judgment
in resolution of a tort claim or for periodic
payments in settlement of a workers" compensation claim;
(n) "Structured settlement agreement" shall mean the
agreement, judgment, stipulation or release
embodying the terms of a structured settlement, including
the rights of the payee to receive periodic
payments;
(o) "Structured settlement obligor" shall mean, 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;
(p) "Structured settlement payment rights" shall mean
rights to receive periodic payments
(including lump sum payments) under a structured settlement,
whether from the settlement obligor or
the annuity issuer, where:
(1) The payee, the settlement
obligor, the annuity issuer, or any other interested
party is
domiciled in this State;
(2) The structured settlement
agreement was approved by a court or responsible administrative
authority in this State; or
(3) The settled claim
was pending before the courts of this State when the
parties entered into the
structured settlement agreement;
(q) "Transfer" shall mean any sale, assignment, pledge,
hypothecation or other form of alienation or
encumbrance made by a payee for consideration; and
(r) "Terms of the structured settlement" shall 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;
(s) "Transfer agreement" shall mean the agreement
providing for transfer of structured settlement
payment rights from a payee to a transferee.
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