Colonial pays cash for structured settlements!
regarding Structured Settlements.
This state statute
overseeing the sale of structured settlement
payments and the buying of annuities is
basically the Model Act and complies with
VERNON'S TEXAS STATUTES AND
CIVIL PRACTICE AND REMEDIES CODE
TITLE 6. MISCELLANEOUS PROVISIONS
CHAPTER 141. STRUCTURED SETTLEMENT PROTECTION
§ 141.001. Short Title
This chapter may be cited as the Structured Settlement
§ 141.002. Definitions
In this chapter:
(1) "Annuity issuer" means an insurer that
has issued a contract to fund periodic payments under
a structured settlement.
(2) "Court" means:
(A) the court of original jurisdiction that authorized
or approved a structured settlement; or
(B) if the court that authorized or approved the
structured settlement no longer has jurisdiction to
approve a transfer of payment rights under the structured
settlement under this chapter, a statutory county
court or a district court located in the county in
which the payee resides.
(3) "Dependents" includes a payee's spouse,
minor children, and all other persons for whom the payee
is legally obligated to provide support, including alimony.
(4) "Discounted present value" means the
present value of future payments determined by discounting
the 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.
(5) "Gross advance amount" means the sum
payable to the payee or for the payee's account as consideration
for a transfer of structured settlement payment rights
before any reductions for transfer expenses or other
deductions to be made from the consideration.
(6) "Independent professional advice" means
advice of an attorney, certified public accountant,
actuary, or other licensed professional adviser.
(7) "Interested party" means, with respect
to any structured settlement:
(A) the payee;
(B) any beneficiary irrevocably designated under
the annuity contract to receive payments following
the payee's death;
(C) the annuity issuer;
(D) the structured settlement obligor; and
(E) any other party that has continuing rights or
obligations under the structured settlement.
(8) "Net advance amount" means the gross
advance amount less the aggregate amount of the actual
and estimated transfer expenses required to be disclosed
under Section 141.003(5).
(9) "Payee" means an individual who is receiving
tax-free payments under a structured settlement and
proposes to transfer payment rights under the structured
(10) "Periodic payments" includes both recurring
payments and scheduled future lump-sum payments.
(11) "Qualified assignment agreement" means
an agreement providing for a qualified assignment within
the meaning of Section 130, Internal Revenue Code of
1986 (26 U.S.C. Section 130), as amended.
(12) "Settled claim" means the original
tort claim or workers' compensation claim resolved by
a structured settlement.
(13) "Structured settlement" means an arrangement
for periodic payment of damages for personal injuries
or sickness established by settlement or judgment in
resolution of a tort claim or for periodic payments
in settlement of a workers' compensation claim.
(14) "Structured settlement agreement" means
the agreement, judgment, stipulation, or release embodying
the terms of a structured settlement.
(15) "Structured settlement obligor" means,
with respect to any structured settlement, the party
that has the continuing obligation to make periodic
payments to the payee under a structured settlement
agreement or a qualified assignment agreement.
(16) "Structured settlement payment rights"
means rights to receive periodic payments under a structured
settlement, whether from the structured settlement obligor
or the annuity issuer, if:
(A) the payee is domiciled in or the domicile or
principal place of business of the structured settlement
obligor or the annuity issuer is located in this state;
(B) the structured settlement agreement was authorized
or approved by a court located in this state; or
(C) the structured settlement agreement is expressly
governed by the laws of this state.
(17) "Terms of the structured settlement"
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 other approval of the court.
(18) "Transfer" means any sale, assignment,
pledge, hypothecation, or other alienation or encumbrance
of structured settlement payment rights made by a payee
for consideration, except that the term does not include
the creation or perfection of a security interest in
structured settlement payment rights under a blanket
security agreement entered into with an insured depository
institution, in the absence of any action to redirect
the structured settlement payments to the insured depository
institution, or its agent or successor in interest,
or to enforce the blanket security interest against
the structured settlement payment rights.
(19) "Transfer agreement" means the agreement
providing for a transfer of structured settlement payment
(20) "Transfer expenses" means all the expenses
of a transfer that are required under the transfer agreement
to be paid by the payee or deducted from the gross advance
amount, including court filing fees, attorney's fees,
escrow fees, lien recording fees, judgment and lien
search fees, finders' fees, commissions, and other payments
to a broker or other intermediary, except that the term
does not include preexisting obligations of the payee
payable for the payee's account from the proceeds of
(21) "Transferee" means a party acquiring
or proposing to acquire structured settlement payment
rights through a transfer.
§ 141.003. Required Disclosures to Payee
At least three days before the date on which the payee
signs a transfer agreement, the transferee shall provide
to the payee a separate disclosure statement, in bold
type at least 14 points in size, that states:
(1) the amounts and due dates of the structured settlement
payments to be transferred;
(2) the aggregate amount of the payments;
(3) the discounted present value of the payments to
be transferred, which shall be identified as the "calculation
of current value of the transferred structured settlement
payments under federal standards for valuing annuities,"
and the amount of the Applicable Federal Rate used in
calculating the discounted present value;
(4) the gross advance amount;
(5) an itemized listing of all applicable transfer
expenses, other than attorney's fees and related disbursements
payable in connection with the transferee's application
for approval of the transfer, and the transferee's best
estimate of the amount of those expenses;
(6) the net advance amount;
(7) the amount of any penalties or liquidated damages
payable by the payee in the event of any breach of the
transfer agreement by the payee; and
(8) a statement that the payee has the right to cancel
the transfer agreement, without penalty or further obligation,
not later than the third business day after the date
the agreement is signed by the payee.
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