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View NCGA Bill Details2023-2024 Session
Senate Bill 655 (Public) Filed Thursday, April 6, 2023
Intro. by Sawyer, Craven, Johnson.

Status: Ref To Com On Rules and Operations of the Senate (Senate action) (Apr 10 2023)

SOG comments (1):

Identical bill

Identical to H 845, filed 4/24/23.

Bill History:

S 655

Bill Summaries:

  • Summary date: Apr 13 2023 - View Summary

    Enacts GS 1-543.11A requiring a person who wishes to act as a transferee, attempt to acquire structured settlement payment rights through a transfer from a payee who resides in the State, or file a structured settlement transfer proceeding in this State to first register with the Department of Insurance (Department) as a structured settlement purchase company (SSPC). Authorizes the Department to develop rules and charge a registration fee. Provides for initial registration on a form prescribed by the Department, and requires a surety bond, letter of credit, or cash bond of $50,000. Sets forth notice requirements when a judgment is secured against an SSPC by a payee.  Specifies that the liability of the surety (i.e., a co-signer) under the bond is not affected by any (1) breach of contract, (2) breach of warranty, (3) failure to pay a premium, (4) other act or omission of the bonded SSPC, or (5) insolvency or bankruptcy of the SSPC. Specifies limits on cancellation of a surety bond. Provides that registration of the SSPC expires automatically upon the cancellation of the bond unless a new surety bond, letter of credit, or cash bond is filed with the Department. Exempts assignees and employees from SSPC registration. Sets forth rules related to federal tax liability under 26 USC 5891 (structured settlement factoring transactions). 

    Makes amendments to GS 1-543.11 to amend definitions of discounted present value, independent professional advice, interested parties, payee, qualified assignment agreement, structured settlement agreement, and structured settlement payment rights. Adds and defines terms assignee, dependents, gross advance amount, net advance amount, periodic payments, person, renewal date, SSPC, structured settlement transfer proceeding, transfer order, and transferee.

    Enacts GS 1-543.11B pertaining to prohibited practices, a private right of action, and penalties. Bars transferees, SSPCs, or an employee or other representative of an SSPC or transferee from engaging in 11 prohibited practices, including (1) acquiring structured settlement payment rights from a payee without complying with this Article and obtaining court approval of the transfer in accordance with this Article; (2) intentionally advertising materially false or misleading information regarding its products or services; (3) attempting to coerce, bribe, or intimidate a payee seeking to transfer structured settlement payment rights; and (4) attempting to defraud a payee, any party to a structured settlement transfer, or any interested party in a structured settlement transfer proceeding by means of forgery or false identification. Grants a payee standing to bring a private action for violation of the Structured Settlement Protection Act (Act). Permits the payee to recover all damages and pursue all rights and remedies to which the payee may be entitled pursuant to the Act or any other law. Provides for recovery of attorneys’ fees, actual damages, and payment of damages of up to $5,000 along with reconveyance to the payee of all unpaid structured settlement payment rights transferred in violation of the Act. Authorizes a court that determines that an SSPC or transferee is in violation of GS 1-543.11B(a) to do any of the following: (1) revoke the SSPC’s registration, (2) suspend the SSPC’s registration for a period of time, (3) enjoin the SSPC or transferee from filing new structured settlement transfer proceedings in the State or otherwise pursuing transfers in the State. Specifies when an SSPC may bring a private action under GS 1-543.11B(a) and allows recovery of all damages or any remedies available to the SSPC.

    Enacts GS 1-543.11C, which sets forth 11 required disclosures that an SSPC must provide to a payee not less than three days prior to the date on which the payee signs a transfer agreement, with specifications as to font size and format.

    Amends GS 1-543.12 pertaining to transfers of structured settlement payment rights. Expands the section’s scope to also apply to assignees of structured settlement payment rights (currently, just transferees). Amends the findings that a court order must contain authorizing the transfer to delete provisions pertaining to required notice, the discount rate, brokers’ commissions and other fees, a determination that the transfer is fair and reasonable, and authorizing a court to transfer payment rights even if the agreement prohibits such transfers. Requires the court to determine that the transfer does not contravene any statute or the order of any court or other government authority; that the transfer is in the best interest of the payee, taking into account the welfare and support of the payee’s dependents; and the payee has been advised in writing by the transferee to seek independent professional advice regarding the transfer and has either received advice or knowingly waived that opportunity.  

    Specifies that no direct or indirect transfer of a minor's structured settlement payment rights by a parent, conservator, or guardian is effective and no structured settlement obligor or annuity issuer will be required to make a payment directly or indirectly to a transferee or assignee of the minor's structured settlement payment rights unless, in addition to the findings set forth above, the court also finds all of the following: (1) the proceeds of the proposed transfer would be applied solely for the support, care, education, health, and welfare of the minor payee and (2) any excess proceeds would be preserved for the future support, care, education, health, and welfare of the minor payee and transferred to the minor payee upon emancipation. Makes conforming changes to section title. Bars structured settlement payment rights arising from a worker’s compensation claim. 

    Enacts GS 1-543.12A setting forth the effects of a transfer of structured settlement payment rights, including reliance on the court order, transferee liability to the structured settlement obligor and the annuity issuer, and further transfer of structured settlement payment rights. Makes technical changes to GS 1-543.13 (pertaining to jurisdiction over structured settlement agreements).

    Amends GS 1-543.14 (procedure for approval of transfers) to require an in-person hearing on an application and makes conforming changes to account for registration requirements. Changes the filing/service deadline for a transferee to file/serve certain documents with the court or responsible administrative authority from 30 days prior to the scheduled hearing to 20 days and specifies that the parent or other guardian or authorized legal representative of any interested party who is not legally competent must also be served with copies of the required documents. Adds to the items that must be included in the notice. Sets a deadline for any response to those documents to five days before the hearing.

    Amends GS 1-543.15 (pertaining to waiver and, as amended, miscellaneous provisions) to include the following. Makes conforming changes to account for newly expanded private right of action. Requires that transfer agreements entered into with a payee who resides in the State to contain a forum selection/choice of law provision requiring that any disputes be resolved in North Carolina and under North Carolina law. Bars confessed judgments (i.e., judgment without notice or a hearing). Bars transfer of structured settlement payment rights to any payments that are life contingent unless certain preconditions are fulfilled. Requires a transferee to request dismissal of an application when the payee cancels a transfer agreement or the transfer agreement otherwise terminates after an application for approval of a transfer of structured settlement payment rights has been filed but not yet granted or denied.

    Effective when the act becomes law and applies to transfer agreements entered into on or after October 1, 2024. Clarifies that nothing in the act is intended to imply that any transfer under a transfer agreement entered into prior to October 1, 2024, is valid or invalid.