Revises provisions governing structured settlement purchase companies. (BDR 3-1074)
The legislation impacts existing statutes governing structured settlements by establishing new rules for the registration and operational conduct of structured settlement purchase companies. Companies must now pay a nonrefundable application fee upon initial registration and during renewals, with increased fees applicable for late renewals. Additionally, all fees collected by the Consumer Affairs Unit will be allocated to technological improvements to enhance the regulatory process, which supports the overall goal of consumer protection and regulatory efficiency.
SB449 aims to revise the regulatory framework for structured settlement purchase companies in Nevada. One of the primary changes introduced in this bill is the removal of the option for these companies to post a cash bond as a form of surety to protect payees. Instead, the bill mandates that all registered companies must secure a surety bond or a letter of credit. This measure aims to enhance the financial security of payees engaging with structured settlement purchase companies, ensuring that they have a reliable method of recourse should the companies fail to meet their obligations.
While the bill has been primarily debated for its potential to safeguard payees, there are concerns regarding the financial implications for structured settlement purchase companies. Critics may argue that the increased financial burdens associated with surety bonds and the renewed fee structure could limit market competition and increase costs passed down to payees. The shift from a cash bond also raises discussions about the adequacy of surety bonds and letters of credit as alternatives for consumer protection, which could spark further regulation and oversight in the industry.