Colonial pays cash for structured settlements!
New York 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 it has some consumer "
add ons", but it complies with Federal
Law.
(Colonial's interpretation)
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MCKINNEY'S CONSOLIDATED LAWS
OF NEW YORK ANNOTATED
GENERAL OBLIGATIONS LAW
CHAPTER 24-A OF THE CONSOLIDATED LAWS
ARTICLE 5--CREATION, DEFINITION AND ENFORCEMENT
OF CONTRACTUAL OBLIGATIONS
TITLE 17. STRUCTURED SETTLEMENT PROTECTION ACT
Current through
L.2002, chs. 1, 5 to 589, 591 to 596 and 598 to
601.
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§ 5-1704. Provisions prohibited in transfer agreement
No transfer agreement or other document or agreement
executed in association with the transfer shall contain
any provision described in this section. To the extent
that a prohibited provision is included in a transfer
agreement such provision shall be void and unenforceable.
A prohibited provision is:
(a) any provision that waives the payee's right to
sue under any law, or where the payee agrees not to
sue, or which waives jurisdiction or standing to sue
under the transfer agreement;
(b) any provision that requires the payee to indemnify
and hold harmless the transferee, or to pay the transferee's
costs of defense, in any claim or action brought by
the payee on or the payee's behalf contesting the transfer
for any reason;
(c) any provision that requires the payee to pay the
transferee's attorney's fees or costs if the transfer
contemplated by the transfer agreement is not completed;
and
(d) any provision that requires the payee to pay any
tax liability arising under federal tax laws, other
than the seller's own tax liability, if any, that results
from the transfer.
§ 5-1705. Procedure for approval of transfers
(a) An action for approval of a transfer of a structured
settlement shall be by a special proceeding.
(b) Such proceeding shall be commenced to obtain approval
of a transfer of structured settlement payment rights.
Such proceeding shall be commenced:
(i) in the supreme court of the county in which
the payee resides; or
(ii) in any court which approved the structured
settlement agreement.
(c) A copy of the notice of petition and petition
or order to show cause and petition shall be served
upon all interested parties at least twenty days before
the time at which the petition is noticed to be heard.
A response shall be served at least seven days before
the petition is noticed to be heard.
(d) A petition for approval of a transfer of structured
settlement payment rights shall include:
(i) a copy of the transfer agreement;
(ii) a copy of the disclosure statement and proof
of notice of that statement required under section
5-1703 of this title; and
(iii) a listing of each of the payee's dependents,
together with each dependent's age.
§ 5-1706. Approval of 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 based upon express findings
by such court that:
(a) the transfer complies with the requirements of
this title;
(b) the transfer is in the best interest of the payee,
taking into account the welfare and support of the payee's
dependants; and whether the transaction, including the
discount rate used to determine the gross advance amount
and the fees and expenses used to determine the net
advance amount, are fair and reasonable;
(c) the payee has been advised in writing by the transferee
to seek independent professional advice regarding the
transfer and has either received such advice or knowingly
waived such advice in writing;
(d) the transfer does not contravene any applicable
statute or the order of any court or other government
authority; and
(e) is written in plain language and in compliance
with section 5-702 of this article.
§ 5-1707. Effects of transfer of structured settlement
payment rights
Following a transfer of structured settlement payment
rights under this title:
(a) 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;
(b) The transferee shall be liable to the structured
settlement obligor and the annuity issuer:
(i) if the transfer contravenes the terms of the
structured settlement, for any taxes incurred by such
parties as a consequence of the transfer; and
(ii) for any other liabilities or costs, including
reasonable costs and attorneys' fees, arising from
compliance by such parties with the order of the court
or arising as a consequence of the transferee's failure
to comply with this title;
(c) 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
(d) Any further transfer of structured settlement
payment rights by the payee may be made only after compliance
with all of the requirements of this title.
§ 5-1708. General provisions; construction
(a) The provisions of this title may not be waived
by any payee.
(b) Any transfer agreement entered into on or after
the effective date of this title 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 (i) periodically confirming the payee's
survival, and (ii) giving the annuity issuer and the
structured settlement obligor prompt written notice
in the even 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 title.
(e) Nothing contained in this title shall be construed
to authorize any transfer of structured settlement payment
rights in contravention of any statute or to imply that
any transfer under a transfer agreement entered into
prior to the effective date of this title is valid or
invalid.
(f) Compliance with the requirements set forth in
section 5-1703 of this title and fulfillment of the
conditions set forth in section 5-1705 of this title
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, non-compliance with such
requirements or failure to fulfill such conditions.
(g) The assignee of any transfer agreement or any
agreement executed in connection therewith, shall be
subject to all claims and defenses of the payee against
the transferee arising from such transfer agreement
notwithstanding any agreement to the contrary. Recovery
hereunder by the payee shall not exceed the amount owing
to the assignee at the time the claim or defense is
asserted against the assignee. Rights of the payee under
this provision can be asserted affirmatively against
a claim by the assignee.
§ 5-1709. Enforcement
(a) In addition to the other remedies provided, whenever
there shall be a violation of this title, application
may be made by the attorney general in the name of the
people of the state of New York to a court of competent
jurisdiction by a special proceeding to issue an injunction,
and upon notice to the defendant of not less than five
days, to enjoin and restrain the continuance of such
violations; and if it shall appear to the satisfaction
of the court or justice that the defendant has, in fact,
violated this title, an injunction may be issued by
such court or justice, enjoining and restraining any
further violation, without requiring proof that any
person has, in fact, been injured or damaged thereby.
In any such proceedings, the court may make allowances
to the attorney general as provided in paragraph six
of subdivision (a) of section eighty-three hundred three
of the civil practice law and rules, and direct restitution.
Whenever the court shall determine that a violation
of this title has occurred, the court may impose a civil
penalty of not more than one thousand dollars for each
violation. In connection with any such proposed application,
the attorney general is authorized to take proof and
make a determination of the relevant facts and to issue
subpoenas in accordance with the civil practice law
and rules.
(b) Any payee injured by a violation of this title
may bring an action for the recovery of damages. The
court may award reasonable attorney's fees to the prevailing
plaintiff.
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