BILL NUMBER: SB 510INTRODUCED BILL TEXT INTRODUCED BY Senator Corbett FEBRUARY 26, 2009 An act to amend Section 10139.5 of the Insurance Code, relating to structured settlements. LEGISLATIVE COUNSEL'S DIGEST SB 510, as introduced, Corbett. Structured settlements: payment transfers. Existing law provides that no direct or indirect transfer of structured settlement payment rights is effective unless the transfer has been approved in advance in a final court order based on certain written court findings. This bill would provide that every application for approval of a transfer of structured settlement payment rights shall contain certain specified information. Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 10139.5 of the Insurance Code is amended to read: 10139.5. (a) A direct or indirect transfer of structured settlement payment rights is not effective and a structured settlement obligor or annuity issuer is not required to make any payment directly or indirectly to any transferee of structured settlement payment rights unless the transfer has been approved in advance in a final court order based on express written findings by the court that: (1) The transfer is in the best interest of the payee, taking into account the welfare and support of the payee's dependents. (2) The payee has been advised in writing by the transferee to seek independent professional advice regarding the transfer and has either received that advice or knowingly waived that advice in writing. (3) The transferee has provided the payee with a disclosure form that complies with Section 10136 and the transfer agreement complies with Sections 10136 and 10138. (4) The transfer does not contravene any applicable statute or the order of any court or other government authority. (5) The payee reasonably understands the terms of the transfer agreement, including the terms set forth in the disclosure statement required by Section 10136. (6) The payee reasonably understands and does not wish to exercise the payee's right to cancel the transfer agreement. (b) Every application for approval of a transfer of structured settlement payment rights shall include all of the following: (1) The payee's name, address and age. (2) The payee's marital status, and if married or separated, the name of the payee's spouse. (3) The names, ages, and place or places of residence of the payee' s minor children or other dependents, if any. (4) The payee's monthly income and sources of income, and, if presently married, the monthly income and sources of income of the payee's spouse.(b)(c) Following a transfer of structured settlement payment rights under this article: (1) 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. (2) The transferee shall be liable to the structured settlement obligor and the annuity issuer if the transfer contravenes the terms of the structured settlement for the following: (A) Any taxes incurred by those parties as a consequence of the transfer. (B) Any other liabilities or costs, including reasonable costs and attorney's fees, arising from compliance by those parties with the order of the court or arising as a consequence of the transferee's failure to comply with this article. (3) 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. (4) Any further transfer of structured settlement payment rights by the payee may be made only after compliance with all of the requirements of this article.(c)(d) (1) An application under this article for approval of a transfer of structured settlement payment rights shall be made by the transferee and brought in the county in which the payee resides. (2) Not less than 20 days prior to the scheduled hearing on any application for approval of a transfer of structured settlement payment rights under this article, the transferee shall file with the court and serve on all interested parties a notice of the proposed transfer and the application for its authorization, and shall include the following with that notice: (A) A copy of the transferee's application. (B) A copy of the transfer agreement. (C) A listing of each of the payee's dependents, together with each dependent's age. (D) A copy of the disclosure required in subdivision (b) of Section 10136. (E) A copy of the annuity contract. (F) A copy of any qualified assignment agreement. (G) A copy of the underlying structured settlement agreement. (H) Notification that any 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 by participating in the hearing. (I) 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 must be filed, which may not be less than 15 days after service of the transferee's notice, in order to be considered by the court.(d)(e) All court costs and filing fees shall be paid by the transferee.(e)(f) No later than the time of filing the petition for court approval, the transferee shall advise the payee of the payee's right to seek independent counsel and financial advice in connection with the transferee's petition for court approval of the transfer agreement, and shall further advise the payee that if the payee retains counsel, a licensed certified public accountant, or a licensed actuary in connection with a petition for an order approving the transfer agreement, that the transferee shall pay the fees of the payee's counsel, accountant, or actuary, regardless of whether the transfer agreement is approved, and regardless of whether the attorney, accountant, or actuary files any document or appears at the hearing on the application for transfer, in an aggregate amount not to exceed one thousand five hundred dollars ($1,500). The transferee' s accountant, counsel, or actuary may not advise the payee.(f)(g) The court shall retain continuing jurisdiction to interpret and monitor the implementation of the transfer agreement as justice requires.