Massachusetts 2025-2026 Regular Session

Massachusetts House Bill H1863 Compare Versions

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1	1	1 of 1
2	2	HOUSE DOCKET, NO. 3829 FILED ON: 1/17/2025
3	3	HOUSE . . . . . . . . . . . . . . . No. 1863
4	4	The Commonwealth of Massachusetts
5	5	_________________
6	6	PRESENTED BY:
7	7	John J. Mahoney
8	8	_________________
9	9	To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
10	10	Court assembled:
11	11	The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
12	12	An Act relative to structured settlement payment protections.
13	13	_______________
14	14	PETITION OF:
15	15	NAME:DISTRICT/ADDRESS :DATE ADDED:John J. Mahoney13th Worcester1/17/2025 1 of 16
16	16	HOUSE DOCKET, NO. 3829 FILED ON: 1/17/2025
17	17	HOUSE . . . . . . . . . . . . . . . No. 1863
18	18	By Representative Mahoney of Worcester, a petition (accompanied by bill, House, No. 1863) of
19	19	John J. Mahoney relative to structured settlement payment protections. The Judiciary.
20	20	The Commonwealth of Massachusetts
21	21	_______________
22	22	In the One Hundred and Ninety-Fourth General Court
23	23	(2025-2026)
24	24	_______________
25	25	An Act relative to structured settlement payment protections.
26	26	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
27	27	of the same, as follows:
28	28	1 SECTION 1. Section 1 of chapter 231C of the General Laws, as appearing in the 2022
29	29	2Official Edition, is hereby amended by striking out the definition of “independent professional
30	30	3advice” and replacing it with the following:-
31	31	4 “Independent professional advice”, advice of an attorney, certified public accountant,
32	32	5actuary, or other licensed professional advisor.
33	33	6 SECTION 2. Said section 1 of said chapter 231C, as so appearing, is hereby amended by
34	34	7inserting after the definition of “Interested party” the following definition:-
35	35	8 “Minor” an individual who is under 18 years of age.
36	36	9 And further by inserting after the definition of “Payee” the following two definitions:-
37	37	10 “Periodic payments”, includes both recurring payments and scheduled future lump-sum
38	38	11payments. 2 of 16
39	39	12 “Protected person”, an individual:
40	40	13 With a mental or cognitive impairment that significantly affects decision-making
41	41	14abilities, including, but not limited to conditions such as Alzheimer's disease, dementia,
42	42	15traumatic brain injury, or intellectual and developmental disabilities, including autism;
43	43	16 Whose estate in the commonwealth or in any other jurisdiction is currently administered
44	44	17by a guardian or conservator, due to such impairment, as appointed by a court; or
45	45	18 Who has been determined by the court to lack capacity.
46	46	19 And further by inserting after the definition of “Structured settlement payment rights” the
47	47	20following definition:-
48	48	21 "Structured settlement purchase company", an entity, including an employee or other
49	49	22representative thereof, that acts as a transferee in the state and who is registered with the attorney
50	50	23general pursuant to section 6.
51	51	24 SECTION 3. Section 2 of said chapter 231C, as so appearing, is hereby amended by
52	52	25striking section 2 in its entirety and inserting in place thereof the following section:-
53	53	26 Section 2. Transfers of structured settlement payment rights
54	54	27 (a) No direct or indirect transfer of structured settlement payment rights shall be
55	55	28effective, and no structured settlement obligor or annuity issuer shall be required to make a
56	56	29payment directly or indirectly to a transferee of structured settlement payment rights, unless the
57	57	30transfer has been authorized in advance in a final order of a court of competent jurisdiction or
58	58	31responsible administrative authority, such as an administrative law judge, based on the court's or
59	59	32responsible administrative authority's written express findings that: 3 of 16
60	60	33 (1) the transfer complies with the requirements of this chapter and will not contravene
61	61	34other applicable law;
62	62	35 (2) the transfer is in the best interests of the payee, taking into consideration the welfare
63	63	36and support of the payee’s dependents, if any;
64	64	37 (3) the payee has been advised in writing by the transferee to seek independent
65	65	38professional advice pursuant to subsection (8)(xi) regarding the legal, tax, and financial
66	66	39implications of the transfer and has received such advice, or waived the right to receive
67	67	40independent professional advice regarding the legal, tax and financial implications of the
68	68	41transfer, so long as the payee is not a minor or protected person, as defined in section 1, subject
69	69	42to the provisions in sections 6 and 7;
70	70	43 (4) the transferee has given written notice of the transferee's name, address, and taxpayer
71	71	44identification number to the annuity issuer and the structured settlement obligor and has filed a
72	72	45copy of the notice with the court or responsible administrative authority;
73	73	46 (5) the transfer agreement provides that if the payee is domiciled in the commonwealth,
74	74	47any disputes between the parties shall be governed, interpreted, construed, and enforced in
75	75	48accordance with the laws of the commonwealth and that the domicile state of the payee is the
76	76	49proper place of venue to bring any cause of action arising out of a breach of the agreement; and
77	77	50 (6) the court or responsible administrative agency has made a determination that the net
78	78	51amount payable to the payee is fair, just and reasonable under the circumstances then existing;
79	79	52 (7) the payee has been informed of their right to cancel the transfer agreement, without
80	80	53penalty of further obligation, until the transfer is approved by the court; and 4 of 16
81	81	54 (8) not less than ten days before the date on which the payee first incurred an obligation
82	82	55with respect to the transfer, the transferee has provided to the payee a disclosure statement in
83	83	56bold type, no smaller than 14 points, specifying:
84	84	57 (i) the amounts and due dates of the structures settlement payments to be transferred;
85	85	58 (ii) the aggregate amount of the payments;
86	86	59 (iii) the discounted present value of the payments, together with the discount rate used in
87	87	60determining the discounted present value;
88	88	61 (iv) the gross amount payable to the payee in exchange for the payments;
89	89	62 (v) an itemized listing of all brokers' commissions, service charges, application fees,
90	90	63processing fees, closing costs, filing fees, referral fees, administrative fees, legal fees, notary
91	91	64fees, and other commissions, fees, costs, expenses and charges payable by the payee or
92	92	65deductible from the gross amount otherwise payable to the payee;
93	93	66 (vi) the net amount payable to the payee after deduction of all commissions, fees, costs,
94	94	67expenses and charges described in clause (v);
95	95	68 (vii) the quotient, expressed as a percentage, obtained by dividing the net payment
96	96	69amount by the discounted present value of the payments, which shall be disclosed in the
97	97	70statement as follows: ''The net amount that you will receive from us in exchange for your future
98	98	71structured settlement payments represent ___% of the estimated current value of the payments'';
99	99	72 (viii) the effective annual interest rate, which rate shall be disclosed in the statement as
100	100	73follows: ''Based on the net amount that you receive from us and the amounts and timing of the 5 of 16
101	101	74structured settlement payments that you are turning over to us, you will, in effect, be paying
102	102	75interest to us at a rate of ___% per year'';
103	103	76 (ix) the amount of any penalty and the aggregate amount of any liquidated damages,
104	104	77including penalties payable by the payee in the event of a breach of the transfer agreement by the
105	105	78payee;
106	106	79 (x) that the payee has the right to cancel the transfer agreement, without penalty or further
107	107	80obligation, until the transfer agreement is approved by the court;
108	108	81 (xi) that the payee has the right to seek independent professional advice from an attorney,
109	109	82certified public accountant, actuary, or other licensed professional regarding the proposed
110	110	83transfer and should consider doing so before agreeing to the transfer of any structured settlement
111	111	84payment rights, with the additional statement as follows: “It is prohibited for us to refer you to a
112	112	85specific independent professional advisor. We may refer you to a state or local referral service,
113	113	86bar association, legal aid or any other entity unrelated to us which assists people with locating
114	114	87independent professional advice, if requested”; and
115	115	88 (xii) the payee has the right to seek out and consider additional offers for transferring the
116	116	89structured settlement payment rights and should do so.
117	117	90 (b) In determining whether a proposed transfer is in the best interest of the payee or the
118	118	91payee’s dependents, the court or administrative authority shall, among other things, consider the
119	119	92following factors:
120	120	93 (1) the reasonable preference of the payee, in light of their age, mental capacity, maturity
121	121	94level, understanding of the terms of the agreement, and stated purpose for the transfer; 6 of 16
122	122	95 (2) if the periodic payments are intended to cover future income, loss of income, or
123	123	96medical expenses, and whether the payee has means of financial support aside from the
124	124	97structured settlement to meet such obligations as they may occur.
125	125	98 (3) whether the payee can meet the financial needs of, and obligations to, the payee’s
126	126	99dependents if the transfer is allowed to proceed, including child support and spousal
127	127	100maintenance;
128	128	101 (4) whether the payee completed previous transactions involving the payee’s structured
129	129	102settlement payment rights and actual use of the proceeds;
130	130	103 (5) the impact of the proposed transfer on current or future eligibility of the payee or the
131	131	104payee’s dependents for public benefits, including, but not limited to,
132	132	105 (6) any other factors or facts the court or administrative authority determines are relevant
133	133	106to the proposed transfer.
134	134	107 (c) The transfer agreement shall also provide that the parties agree to the jurisdiction of
135	135	108any court of competent jurisdiction located in the commonwealth. If the transfer would
136	136	109contravene the terms of the structured settlement, upon the filing of a written objection by any
137	137	110interested party and after considering the objection and any response to it, the court or
138	138	111responsible administrative authority may grant, deny or impose conditions upon the proposed
139	139	112transfer as the court or responsible administrative authority deems just and proper under the facts
140	140	113and circumstances in accordance with established principles of law. Any order approving the
141	141	114transfer shall require that the transferee indemnify the annuity issuer and the structured
142	142	115settlement obligor for any liability including reasonable costs and attorney's fees arising from 7 of 16
143	143	116compliance by the issuer or obligor with the order of the court or responsible administrative
144	144	117authority.
145	145	118 (d) A provision in a transfer agreement giving a transferee power to confess judgment
146	146	119against a payee shall be unenforceable to the extent the amount of the judgment would exceed
147	147	120the amount paid by the transferee to the payee, less any payments received from the structured
148	148	121settlement obligor or the payee.
149	149	122 (e) In negotiating a structured settlement of claims brought by or on behalf of a claimant
150	150	123who is domiciled in the commonwealth, the structured settlement obligor shall disclose in
151	151	124writing to the claimant or the claimant's legal representative all of the following information that
152	152	125is not otherwise specified in the structured settlement agreement:
153	153	126 (1) the amounts and due dates of the periodic payments to be made under the structured
154	154	127settlement agreement; in the case of payments that will be subject to periodic percentage
155	155	128increases, the amounts of future payments may be disclosed by identifying the base payment
156	156	129amount, the amount and timing of scheduled increases, and the manner in which increases will
157	157	130be compounded;
158	158	131 (2) the amount of the premium payable to the annuity issuer;
159	159	132 (3) the discounted present value of all periodic payments that are not life-contingent,
160	160	133together with the discount rate used in determining the discounted present value;
161	161	134 (4) the nature and amount of any cost that may be deducted from any of the periodic
162	162	135payments; 8 of 16
163	163	136 (5) where applicable, that any transfer of the periodic payments is prohibited by the terms
164	164	137of the structured settlement and may otherwise be prohibited or restricted under applicable law;
165	165	138and
166	166	139 (6) that any transfer of the periodic payments by the claimant may subject the claimant to
167	167	140serious adverse tax consequences.
168	168	141 (f) The district court shall have non-exclusive jurisdiction over an application for
169	169	142authorization of a transfer of structured settlement payment rights.
170	170	143 (g) Not less than 20 days before the scheduled hearing on an application for authorization
171	171	144of a transfer of structured settlement payment rights, the transferee shall file with the court or
172	172	145responsible administrative authority, any other government authority that previously approved
173	173	146the structured settlement, and all interested parties a notice of the proposed transfer and the
174	174	147application for its authorization. The notice shall include:
175	175	148 (1) a copy of the transferee's application to the court or responsible administrative
176	176	149authority;
177	177	150 (2) a copy of the transfer agreement;
178	178	151 (3) a copy of the disclosure statement required under this section;
179	179	152 (4) notification that an interested party is entitled to support, oppose, or otherwise
180	180	153respond to the transferee's application, either in person or by counsel, by submitting written
181	181	154comments to the court or responsible administrative authority or by participating in the hearing;
182	182	155and 9 of 16
183	183	156 (5) notification of the time and place of the hearing and notification of the manner in
184	184	157which and the time by which written responses to the application shall be filed, in order to be
185	185	158considered by the court or responsible administrative authority.
186	186	159 Written responses to the application shall be filed within 15 days after service of the
187	187	160transferee's notice.
188	188	161 SECTION 4. Section 4 of said chapter 231C, as so appearing, is hereby amended by
189	189	162striking out subsection (e) in its entirely and replacing it with the following four subsections:-
190	190	163 (e) No payee who proposes to make transfer of structured settlement payment rights shall
191	191	164incur any penalty, forfeit any application fee or other payment, or otherwise incur any liability to
192	192	165the proposed transferee or any assignee based on failure to satisfy the conditions of this chapter.
193	193	166Compliance with the requirements set forth in this chapter are solely the responsibility of the
194	194	167transferee in any transfer of a structured settlement payment rights.
195	195	168 (f) A payee may file a motion in the district court in which the structured settlement
196	196	169transfer proceeding was pending alleging a violation of this chapter and may pursue all rights
197	197	170and remedies to which the payee may be entitled pursuant to this chapter or any other applicable
198	198	171law.
199	199	172 (g) If a court finds that a structured settlement purchase company or transferee is in
200	200	173violation of this chapter, the court may:
201	201	174 (1) revoke the registration of the structured settlement purchase company;
202	202	175 (2) suspend the registration of the structured settlement purchase company for a period to
203	203	176be determined at the discretion of the court; 10 of 16
204	204	177 (3) enjoin the structured settlement purchase company or transfer from filing new
205	205	178structured settlement transfer proceedings in this state or otherwise pursuing transfers in this
206	206	179state; and
207	207	180 (4) order any other equitable relief as determined at the discretion of the court.
208	208	181 (h) In addition to, and in furtherance of subsection (g), if the attorney general has reason
209	209	182to believe that any transferee of structured settlement payment rights is in violation of this
210	210	183chapter, the attorney general may bring a civil action for injunctive relief and such penalties and
211	211	184other relief as may be appropriate to secure compliance with this chapter.
212	212	185 SECTION 5. Said chapter 231C of the General Laws, as so appearing, is hereby amended
213	213	186by inserting after section 5 the following three sections:-
214	214	187 Section 6. Registration requirements of structured settlement purchase companies
215	215	188 (a) A person or entity shall not act as a transferee, attempt to acquire structured settlement
216	216	189payment rights through a transfer from a payee who resides in the commonwealth, or file a
217	217	190structured settlement transfer proceeding unless registered with the attorney general’s office as a
218	218	191structured settlement purchase company.
219	219	192 (b) A person or entity may apply pursuant to this section with the attorney general for
220	220	193registration to do business in the commonwealth as a structured settlement purchase company by
221	221	194submitting a form of application, for an initial or renewed registration, as prescribed by the
222	222	195attorney general’s office.
223	223	196 An initial registration is valid for one year from the date it is issued, expires one year
224	224	197after it is issued, and may be renewed annually on or before the expiration date. 11 of 16
225	225	198 (c) Each initial or renewal application must contain a sworn certification by an owner,
226	226	199officer, director, or manager of the applicant, if the applicant is not a natural person, or by the
227	227	200applicant if the applicant is a natural person, certifying that they will comply with chapter 231C
228	228	201when acting as a structured settlement purchase company and filing structured settlement transfer
229	229	202proceedings.
230	230	203 (d) No later than ten days after a judgment is obtained against a structured settlement
231	231	204purchase company by a payee, the structured settlement purchase company shall file a notice
232	232	205with the attorney general. The notice shall contain (i) a copy of the judgement; (ii) the name and
233	233	206address of the judgment creditor; (iii) the status of the matter, including whether the judgement
234	234	207will be appealed, or has been paid or otherwise satisfied.
235	235	208 Section 7. Prohibited practices of structured settlement companies
236	236	209 (a) A transferee, structured settlement purchase company, or an employee or other
237	237	210representative thereof shall not:
238	238	211 (1) pursue or complete a transfer with a payee without complying with the provisions of
239	239	212sections 2, 6, 7, and 8 of this chapter;
240	240	213 (2) refuse or fail to fund a transfer after court approval of said transfer;
241	241	214 (3) acquire structured settlement payment rights from a payee without complying with all
242	242	215applicable provisions of this chapter, including obtaining court approval of said transfer;
243	243	216 (4) attempt to coerce, bribe, or intimidate a payee seeking to transfer structured
244	244	217settlement payment rights, including providing any gift, loan, extension of credit, advance, or 12 of 16
245	245	218other forms of consideration paid to or given to the payee as an inducement to enter a transfer
246	246	219agreement;
247	247	220 (5) attempt to defraud a payee or any party to a structured settlement transfer or
248	248	221proceeding of such transfer by any means, including, but not limited to, forgery or false
249	249	222identification;
250	250	223 (6) knowingly contact a payee who has signed a transfer agreement or is pursuing a
251	251	224proposed transfer with another structured settlement purchase company for the purpose of
252	252	225inducing the payee into canceling the proposed transfer or transfer agreement if a proceeding has
253	253	226been filed by the other structured settlement purchase company and is pending.
254	254	227 (i) the provisions of this subsection do not apply if a hearing has not been held for the
255	255	228pending structured settlement transfer proceeding within 90 days after the filing of such
256	256	229proceeding.
257	257	230 (7) fail to dismiss a pending structured settlement transfer proceeding at the request of the
258	258	231payee; provided that a dismissal of a structured settlement proceeding after a structured
259	259	232settlement purchase company has violated the provisions of this chapter does not exempt the
260	260	233structured settlement purchase company from any liability.
261	261	234 (8) solicit a prospective payee through the conveyance of a document which resembles a
262	262	235check or other form of payment;
263	263	236 (9) provide a transfer agreement or related document that purports to give the transferee
264	264	237the first choice or option to purchase any remaining structured settlement payment rights 13 of 16
265	265	238belonging to the payee or a person associated with the payee which are not subject to the current
266	266	239structured settlement transfer proceeding;
267	267	240 (10) communicate with a payee, prospective payee or person associated with the payee:
268	268	241 (i) after such person or persons has informed the structured settlement purchase company
269	269	242to cease further communication;
270	270	243 (ii) at any time before 8am or after 9pm Eastern Standard Time, or knowingly at a time
271	271	244that is inconvenient to the consumer or payee; or
272	272	245 (iii) repeatedly or continuously with intent to annoy, abuse, or harass a payee, prospective
273	273	246payee, or person associated with the payee.
274	274	247 (11) instruct a payee to hire or directly refer a payee or a prospective payee to seek
275	275	248independent professional advice from a specific person concerning the legal, tax and financial
276	276	249implications of a transfer of structured settlement payment rights, except that a structured
277	277	250settlement purchase company may refer a payee to a state or local referral service, bar
278	278	251association, legal aid, or any other entity unrelated to the structured settlement purchase
279	279	252company.
280	280	253 (i) a person rendering independent professional advice to a payee or prospective payee
281	281	254shall not be affected by whether a transfer occurs or does not occur and must not in any manner
282	282	255be affiliated with or compensated by the transferee or a structured settlement purchase company
283	283	256unless ordered by the court. 14 of 16
284	284	257 (ii) notwithstanding newly inserted section 2, a minor or protected person, pursuant to
285	285	258section 1, must receive independent professional advice regarding the legal, tax, and financial
286	286	259implications of a transfer pursuant to this chapter.
287	287	260 Section 8. Structured settlement transfers involving minors and protected persons
288	288	261 (a) The court shall appoint an attorney in any case involving:
289	289	262 (1) a proposed transfer of a minor's structured settlement payments rights by a parent,
290	290	263conservator, or guardian where the attorney must advise the court on whether the proposed
291	291	264transfer is of direct benefit to the minor; or
292	292	265 (2) a proposed transfer of structured settlement payment rights involving a payee if it
293	293	266appears to the court that the payee may suffer from a mental or cognitive impairment or may be
294	294	267considered a protected person pursuant to section 1.
295	295	268 (b) The transferee shall file a motion for the appointment of an attorney prior to a hearing
296	296	269on the proposed transfer if the transferee:
297	297	270 (1) is aware that the underlying structured settlement arose from a case in which a finding
298	298	271was made in a court record of a mental or cognitive impairment on the part of the payee; or
299	299	272 (2) is aware of any other case in which a finding was made in a court record of mental or
300	300	273cognitive impairment on the part of the payee, pursuant to section 1; or
301	301	274 (c) In conjunction with the motion, the transferee shall provide to the court, either in-
302	302	275camera or as directed by the court in a way to protect the privacy of the payee, any such findings
303	303	276known to the transferee that describe the nature, extent or consequences of the payee’s mental or
304	304	277cognitive impairment. 15 of 16
305	305	278 (d) No direct or indirect transfer of a minor’s structured settlement payment rights by a
306	306	279parent, conservator, or guardian shall be effective unless, in addition to the requirements
307	307	280provided in section 2, the court also finds that:
308	308	281 (1) the proceeds of the proposed transfer would be applied solely for support, care,
309	309	282education, health, and welfare of the minor payee; and
310	310	283 (2) any excess proceeds would be preserved for the future support, care, education,
311	311	284health, and welfare of the minor payee, and transferred to them upon emancipation.
312	312	285 (e) No direct or indirect transfer of a protected person's structured settlement payment
313	313	286rights shall be effective unless, in addition to the requirements provided in section 2, the court
314	314	287also finds that:
315	315	288 (1) the proceeds of the proposed transfer would be applied solely for support, care,
316	316	289education, health, and welfare of the payee and their dependents, if any; and
317	317	290 (2) any excess proceeds would be preserved for the future support, care, education,
318	318	291health, and welfare of the payee, and their dependents, if any.
319	319	292 (f) Notwithstanding any general or special law to the contrary, any court records relating
320	320	293to the settlement of a minor or protected person’s claim pursuant to this chapter shall not be
321	321	294subject to disclosure to any person who is not a party to a structured settlement, or made
322	322	295available for public or inspection, except upon motion and show of good cause.
323	323	296 SECTION 6. Nothing in this act shall be construed to authorize a transfer of structured
324	324	297settlement payment rights in contravention of any applicable law or to imply that any transfer
325	325	298under a transfer agreement entered into before the effective date of this act is valid or invalid. 16 of 16
326	326	299 SECTION 7. Sections 1 to 6 of this act shall be effective as of January 1, 2027, and will
327	327	300apply to any transfer of structured settlement payment rights filed on or after this date.