Colonial pays cash for structured settlements!
Massachusetts
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 because of additional disclosures.
But it complies with Federal Law
(Colonial's interpretation)
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MASSACHUSETTS GENERAL LAWS
ANNOTATED
PART III. COURTS, JUDICIAL OFFICERS AND PROCEEDINGS
IN CIVIL CASES
TITLE II. ACTIONS AND PROCEEDINGS THEREIN
CHAPTER 231C. STRUCTURED SETTLEMENT CONTRACTS
Current through Ch. 138 of the 2002 Second Annual
Session
of the General Court., approved 6/13/2002.
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§ 2. Transfers of structured settlement payment
rights
(a) 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 a payment directly or indirectly to a 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, such as an administrative
law judge, based on the court's or responsible administrative
authority's written express findings that:
(1) the transfer complies with the requirements
of this chapter and will not contravene other applicable
law;
(2) not less than ten days before the date on which
the payee first incurred an obligation with respect
to the transfer, the transferee has provided to the
payee a disclosure statement in bold type, no smaller
than 14 points, specifying:
(i) the amounts and due dates of the structures
settlement payments to be transferred;
(ii) the aggregate amount of the payments;
(iii) the discounted present value of the payments,
together with the discount rate used in determining
the discounted present value;
(iv) the gross amount payable to the payee in
exchange for the payments;
(v) an itemized listing of all brokers' commissions,
service charges, application fees, processing fees,
closing costs, filing fees, referral 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;
(vi) the net amount payable to the payee after
deduction of all commissions, fees, costs, expenses
and charges described in clause (v);
(vii) the quotient, expressed as a percentage,
obtained by dividing the net payment amount by the
discounted present value of the payments, which
shall be disclosed in the statement as follows:
"The net amount that you will receive from
us in exchange for your future structured settlement
payments represent ___% of the estimated current
value of the payments";
(viii) the effective annual interest rate, which
rate shall be disclosed in the statement as follows:
"Based on the net amount that you receive from
us and the amounts and timing of the structured
settlement payments that you are turning over to
us, you will, in effect, be paying interest to us
at a rate of ___% per year"; and
(ix) the amount of any penalty and the aggregate
amount of any liquidated damages, including penalties
payable by the payee in the event of a breach of
the transfer agreement by the payee;
(3) the payee has established that the transfer
is in the best interests of the payee and the payee's
dependents;
(4) the payee has received, or waived the right
to receive 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 the notice with the
court or responsible administrative authority;
(6) the transfer agreement provides that if the
payee is domiciled in the commonwealth, any disputes
between the parties shall be governed, interpreted,
construed, and enforced in accordance with the laws
of the commonwealth and that the domicile state of
the payee is the proper place of venue to bring any
cause of action arising out of a breach of the agreement;
and
(7) the court or responsible administrative agency
has made a determination that the net amount payable
to the payee is fair, just and reasonable under the
circumstances then existing.
(b) The transfer agreement shall also provide that
the parties agree to the jurisdiction of any court of
competent jurisdiction located in the commonwealth.
If the transfer would contravene the terms of the structured
settlement, upon the filing of a written objection by
any interested party and after considering the objection
and any response to it, the court or responsible administrative
authority may grant, deny or impose conditions upon
the proposed transfer as the court or responsible administrative
authority deems just and proper under the facts and
circumstances in accordance with established principles
of law. Any order approving the transfer shall require
that the transferee indemnify the annuity issuer and
the structured settlement obligor for any liability
including reasonable costs and attorney's fees arising
from compliance by the issuer or obligor with the order
of the court or responsible administrative authority.
(c) A provision in a transfer agreement giving a transferee
power to confess judgment against a payee shall be unenforceable
to the extent the amount of the judgment would exceed
the amount paid by the transferee to the payee, less
any payments received from the structured settlement
obligor or the payee.
(d) In negotiatinga structured settlement of claims
brought by or on behalf of a claimant who is domiciled
in the commonwealth, the structured settlement obligor
shall disclose in writing to the claimant or the claimant's
legal representative all of the following information
that is not otherwise specified in the structured settlement
agreement:
(1) the amounts and due dates of the periodic payments
to be made under the structured settlement agreement;
in the case of payments that will be subject to periodic
percentage increases, the amounts of future payments
may be disclosed by identifying the base payment amount,
the amount and timing of scheduled increases, and
the manner in which increases will be compounded;
(2) the amount of the premium payable to the annuity
issuer;
(3) the discounted present value of all periodic
payments that are not life- contingent, together with
the discount rate used in determining the discounted
present value;
(4) the nature and amount of any cost that may be
deducted from any of the periodic payments;
(5) where applicable, that any transfer of the periodic
payments is prohibited by the terms of the structured
settlement and may otherwise be prohibited or restricted
under applicable law; and
(6) that any transfer of the periodic payments by
the claimant may subject the claimant to serious adverse
tax consequences.
(e) The district court shall have nonexclusive jurisdiction
over an application for authorization of a transfer
of structured settlement payment rights.
(f) Not less than 20 days before the scheduled hearing
on an application for authorization of a transfer of
structured settlement payment rights, the transferee
shall file with the court or responsible administrative
authority, any other government authority that previously
approved the structured settlement, and all interested
parties a notice of the proposed transfer and the application
for its authorization. The notice shall include:
(1) a copy of the transferee's application to the
court or responsible administrative authority;
(2) a copy of the transfer agreement;
(3) a copy of the disclosure statement required
under this section;
(4) notification that an 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 shall
be filed, in order to be considered by the court or
responsible administrative authority.
Written responses to the application shall be filed
within 15 days after service of the transferee's notice.
§ 3. Waiver of secs. 2 to 4; payee penalty for
failure to transfer
(a) The provisions of sections 2 to 4, inclusive,
shall not be waived.
(b) No payee who proposes to make a transfer of structured
settlement payment rights shall incur a penalty, forfeit
an application fee or other payment, or otherwise incur
any liability to the proposed transferee based on the
failure of the transfer to satisfy the conditions of
section 2.
§ 4. Violations of discount/finance charge stipulation
or of disclosure requirements; penalties; civil actions
by attorney general
(a) If in connection with a transfer of structured
settlement payment rights, a transferee has violated
the discount/finance charge stipulation, neither the
transferee nor any assignee shall be entitled to collect
from the transferred payment rights, or from the payee,
any amount in excess of the net advance amount, and
the payee shall have a right to recover from the transferee
or any assignee:
(1) a refund of any excess amounts previously received
by the transferee or any assignee;
(2) a penalty in an amount determined by the court;
and
(3) reasonable costs and attorney's fees.
(b) If in connection with a transfer of structured
settlement payment rights, the transferee has violated
the disclosure requirements in section 3, the transferee
and any assignees shall be liable to the payee for:
(1) a penalty in an amount determined by the court;
and
(2) reasonable costs and attorney's fees.
(c) A transferee or assignee shall not be liable for
a penalty in any action brought under this section if
the transferee or assignee establishes by a preponderance
of evidence that the violation was not intentional and
resulted from a bona fide error, notwithstanding the
transferee's maintenance of procedures reasonably designed
to avoid such errors.
(d) No action may be brought under this section if:
(1) in the case of a violation of the discount/finance
charge stipulation, more than one year after the due
date of the last transferred structured settlement
payment; and
(2) in the case of the disclosure requirements of
section 2, more than one year after the due date of
the first transferred structured settlement payment.
(e) If the attorney general has reason to believe
that any transferee has violated this chapter, the attorney
general may bring a civil action for injunctive relief
and such penalties and other relief as may be appropriate
to secure compliance with this chapter.
§ 5. Applicability of this chapter to workers'
compensation payment rights
Nothing contained in this chapter shall be construed
to authorize any transfer of workers' compensation payment
rights in contravention of applicable law or to give
effect to any transfer of workers' compensation or other
payment rights that is invalid under applicable law.
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