Update Structured Settlement Protection Act
If enacted, HB 845 will significantly impact how structured settlements are managed and transferred in North Carolina. The bill imposes stringent requirements on the transfer of structured settlement payment rights, including court approval and appropriate disclosures to payees. It aims to prevent predatory practices by making it more challenging for unscrupulous companies to operate without oversight. The new guidelines will ensure that payees are informed and protected, promoting transparency and fairness in the transfer process.
House Bill 845 seeks to update the North Carolina Structured Settlement Protection Act, aligning it with the latest model established by the National Council of Insurance Legislators. The main goal of the bill is to improve protections for individuals who receive structured settlements, especially regarding the transfer of payment rights. The legislation mandates that structured settlement purchase companies register with the Department of Insurance and maintain a surety bond, thus offering a financial safeguard for payees involved in any transfer agreements. This ensures that the companies are held accountable and financially viable.
The overall sentiment surrounding HB 845 appears to be positive among consumer advocates who applaud the efforts to enhance protections for payees. Supporters argue that it will reduce the likelihood of exploitation and ensure that individuals receiving settlements are treated fairly. Nonetheless, some concerns have been raised by structured settlement purchase companies that argue the new regulations may impose excessive burdens on their operations and may hinder the ability of individuals to access their funds in a timely manner.
Notable points of contention include debates surrounding the potential impact of stringent regulations on the structured settlement market. Opponents of the bill may argue that while increased protections for payees are essential, the requirements for court approval and mandatory financial advice could complicate and slow down the transfer process. Furthermore, critics may highlight the challenges for independent purchase companies in meeting the financial obligations stipulated in the bill, emphasizing a balance between consumer protection and market accessibility.