Sell Structured Settlements Sell Structured Insurance Settlements
NEW YORK
Prior to selling structured insurance settlements in NY, one needs to be keenly aware of their rights as a structured insurance settlement recipient under the New York Structured Settlement Protection Act.
Receiving lump sum cash for structured settlement payments can be an exciting proposition to a structured insurance settlement recipient in New York. Settlement Exchange recommends that you review your structured insurance recipient and annuitant rights before contemplating the sale of structured settlement payments in New York or even procuring cash quotes for your structured settlement.
We firmly believe that basic education is the key to securing the best quotes for structured insurance settlements and lottery annuity payments. We always advise that one knows their rights as protected under the New York Structured Settlement Protection Act. We also advise that one should secure their own legal advice before attempting to get cash for structured settlement payments.
The New York Structured Settlement Protection Act dictates that a transferee of structured settlements must reside in the state of New York. A New York State court must also approve the selling of the structured insurance settlement and the sale of structured insurance settlements has to be in the best interest of the structured settlement recipient in all cases.
We have attached a copy of the New York Structured Settlement Protection Act and a direct link for your benefit.
http://public.leginfo.state.ny.us/menugetf.cgi?COMMONQUERY=LAWS
2010 New York Code
GOB – General Obligations
Article 5 – CREATION, DEFINITION AND ENFORCEMENT OF CONTRACTUAL OBLIGATIONS
Title 17 – (5-1701 – 5-1709) STRUCTURED SETTLEMENT PROTECTION ACT
§ 5-1701. Definitions. For purposes of this title:
(a) “annuity issuer” means an insurer that has issued an insurance
contract used to fund periodic payments under a structured settlement;
(b) “dependents” include a payee’s spouse and minor children and all
other persons for whom the payee is legally obligated to provide
support, including alimony or maintenance;
(c) “discounted present value” means the present value of future
payments, as determined by discounting such payments to the present
using the most recently published applicable federal rate for
determining the present value of an annuity, as issued by the United
States Internal Revenue Service;
(d) “gross advance amount” means the sum payable to the payee or for
the payee’s account as consideration for a transfer of structured
settlement payment rights before any reductions for transfer expenses or
other deductions to be made from such consideration;
(e) “independent professional advice” means advice of an attorney,
certified public accountant, actuary or other licensed professional
adviser:
(i) who is engaged by a claimant or payee to render advice concerning
the legal, tax and financial implications of a structured settlement or
a transfer of structured settlement payment rights;
(ii) who is not in any manner affiliated with or compensated by the
defendant in such settlement or the transferee of such transfer; and
(iii) whose compensation for rendering such advice is not affected by
whether a settlement or transfer occurs or does not occur;
(f) “interested parties” means, with respect to any structured
settlement, the payee, any beneficiary irrevocably designated under the
annuity contract to receive payments following the payee’s death, the
annuity issuer, the structured settlement obligor, and any other party
that has continuing rights or obligations under such structured
settlement;
(g) “net advance amount” means the gross advance amount less the
aggregate amount of the expenses required to be disclosed under
subdivision (f) of section 5-1703 of this title;
(h) “payee” means an individual who is receiving tax free payments
under a structured settlement and proposes to make a transfer of payment
rights thereunder;
(i) “periodic payments” includes both recurring payments and scheduled
future lump sum payments;
(j) “qualified assignment agreement” means an agreement providing for
a qualified assignment within the meaning of section 130 of the United
States Internal Revenue Code, United States Code Title 26, as amended
from time to time;
(k) “settled claim” means the original tort claim resolved by a
structured settlement;
(l) “structured settlement” means an arrangement for periodic payment
of damages for personal injuries or sickness established by settlement
or judgment in resolution of a tort claim;
(m) “structured settlement agreement” means the agreement, judgment,
stipulation, or release embodying the terms of a structured settlement;
(n) “structured settlement obligor” means, with respect to any
structured settlement, the party that has the continuing obligation to
make periodic payments to the payee under a structured settlement
agreement or a qualified assignment agreement;
(o) “structured settlement payment rights” means rights to receive
periodic payments under a structured settlement, whether from the
structured settlement obligor or the annuity issuer, where:
(i) the payee is domiciled in, or the domicile or principal place of
business of the structured settlement obligor or the annuity issuer is
located in, this state;
(ii) the structured settlement agreement was approved by a court in
this state; or
(iii) the structured settlement agreement is expressly governed by the
laws of this state;
(p) “terms of the structured settlement” include, with respect to any
structured settlement, the terms of the structured settlement agreement,
the annuity contract, any qualified assignment agreement and any order
or approval of any court authorizing or approving such structured
settlement;
(q) “transfer means any sale, assignment, pledge, hypothecation or
other alienation or encumbrance of structured settlement payment rights
made by a payee for consideration; provided that the term “transfer”
does not include the creation or perfection of a security interest in
structured settlement payment rights under a blanket security agreement
entered into with an insured depository institution, in the absence of
any action to redirect the structured settlement payments to such
insured depository institution, or an agent or successor in interest
thereof, or otherwise to enforce such blanket security interest against
the structured settlement payment rights;
(r) “transfer agreement” means the agreement providing for transfer of
structured settlement payment rights from a payee to a transferee;
(s) “transfer expenses” means all expenses of a transfer that are
required under the transfer agreement to be paid by the payee or
deducted from the gross advance amount, including, without limitation,
court filing fees, attorneys fees, escrow fees, lien recordation fees,
judgment and lien search fees, finders’ fees, commissions, and other
payments to a broker or other intermediary; “transfer expenses” do not
include preexisting obligations of the payee payable for the payee’s
account from the proceeds of a transfer; and
(t) “transferee” means a party acquiring or proposing to acquire
structured settlement payment rights through a transfer or
restructuring.
§ 5-1702. Initial disclosure of structured settlement terms. In
negotiating a structured settlement of claims brought by or on behalf of
a claimant who is domiciled in this state, the defendant or defendant’s
legal representative shall disclose in writing to the claimant or the
claimant’s legal representative all of the following information that is
not otherwise specified in the structured settlement agreement:
(a) the amounts and due dates of the periodic payments to be made
under the structured settlement agreement. In the case of payments that
will be subject to periodic percentage increases, the amounts of future
payments may be disclosed by identifying the base payment amount, the
amount and timing of scheduled increases, and the manner in which
increases will be compounded;
(b) the amount of the premium payable to the annuity issuer;
(c) the nature and amount of any cost that may be deducted from any of
the periodic payments;
(d) where applicable, that any transfer of the periodic payments is
prohibited by the terms of the structured settlement and may otherwise
be prohibited or restricted under applicable law; and
(e) a statement that the claimant is advised to obtain independent
professional advice relating to the legal, tax and financial
implications of the settlement, including any adverse consequences and
that the defendant or defendant’s legal representative may not refer any
advisor, attorney or firm for such purpose.
§ 5-1703. Required disclosures to payee. Not less than ten days prior
to the date on which the payee signs a transfer agreement, the
transferee shall provide to the payee by first class mail and certified
mail, return receipt requested or United States postal service priority
mail, a separate disclosure statement, in bold type no smaller than
fourteen points, setting forth:
(a) the amounts and due dates of the structured settlement payments to
be transferred;
(b) the aggregate amount of such payments;
(c) the discounted present value of the payments to be transferred,
which shall be identified as the “calculation of current value of the
transferred structured settlement payments under federal standards for
valuing annuities”, and the amount of the applicable federal rate used
in calculating such discounted present value;
(d) the price quote from the original annuity issuer or, if such price
quote is not readily available from the original annuity issuer, then a
price quote from two other annuity issuers that reflects the current
cost of purchasing a comparable annuity for the aggregate amount of
payments to be transferred;
(e) the gross advance amount and the annual discount rate, compounded
monthly, used to determine such figure;
(f) an itemized listing of all commissions, fees, costs, expenses and
charges payable by the payee or deductible from the gross amount
otherwise payable to the payee and the total amount of such fees;
(g) the net advance amount including the statement: “The net cash
payment you receive in this transaction from the buyer was determined by
applying the specified discount rate to the amount of future payments
received by the buyer, less the total amount of commissions, fees,
costs, expenses and charges payable by you”;
(h) the amount of any penalties or liquidated damages payable by the
payee in the event of any breach of the transfer agreement by the payee;
and
(i) a statement that the payee has the right to cancel the transfer
agreement, without penalty or further obligation, not later than the
third business day after the date the agreement is signed by the payee.
§ 5-1704. Provisions prohibited in transfer agreement. No transfer
agreement or other document or agreement executed in association with
the transfer shall contain any provision described in this section. To
the extent that a prohibited provision is included in a transfer
agreement such provision shall be void and unenforceable. A prohibited
provision is:
(a) any provision that waives the payee’s right to sue under any law,
or where the payee agrees not to sue, or which waives jurisdiction or
standing to sue under the transfer agreement;
(b) any provision that requires the payee to indemnify and hold
harmless the transferee, or to pay the transferee’s costs of defense, in
any claim or action brought by the payee on or the payee’s behalf
contesting the transfer for any reason;
(c) any provision that requires the payee to pay the transferee’s
attorney’s fees or costs if the transfer contemplated by the transfer
agreement is not completed; and
(d) any provision that requires the payee to pay any tax liability
arising under federal tax laws, other than the seller’s own tax
liability, if any, that results from the transfer.
§ 5-1705. Procedure for approval of transfers. (a) An action for
approval of a transfer of a structured settlement shall be by a special
proceeding.
(b) Such proceeding shall be commenced to obtain approval of a
transfer of structured settlement payment rights. Such proceeding shall
be commenced:
(i) in the supreme court of the county in which the payee resides; or
(ii) in any court which approved the structured settlement agreement.
(c) A copy of the notice of petition and petition or order to show
cause and petition shall be served upon all interested parties at least
twenty days before the time at which the petition is noticed to be
heard. A response shall be served at least seven days before the
petition is noticed to be heard.
(d) A petition for approval of a transfer of structured settlement
payment rights shall include:
(i) a copy of the transfer agreement;
(ii) a copy of the disclosure statement and proof of notice of that
statement required under section 5-1703 of this title; and
(iii) a listing of each of the payee’s dependents, together with each
dependent’s age.
* NB Effective until January 1, 2011
* § 5-1705. Procedure for approval of transfers. (a) An action for
approval of a transfer of a structured settlement shall be by a special
proceeding brought on only by order to show cause.
(b) Such proceeding shall be commenced to obtain approval of a
transfer of structured settlement payment rights. Such proceeding shall
be commenced:
(i) in the supreme court of the county in which the payee resides; or
(ii) in any court which approved the structured settlement agreement.
(c) A copy of the order to show cause and petition shall be served
upon all interested parties at least twenty days before the time at
which the petition is noticed to be heard. A response shall be served at
least seven days before the petition is noticed to be heard.
(d) A petition for approval of a transfer of structured settlement
payment rights shall include:
(i) a copy of the transfer agreement;
(ii) a copy of the disclosure statement and proof of notice of that
statement required under section 5-1703 of this title;
(iii) a listing of each of the payee's dependents, together with each
dependent's age; and
(iv) a statement setting forth whether there have been any previous
transfers or applications for transfer of the structured settlement
payment rights and giving details of all such transfers or applications
for transfer.
(e) On the hearing, the payee shall attend before the court unless
attendance is excused for good cause.
* NB Effective January 1, 2011
§ 5-1706. Approval of transfers of structured settlement payment
rights. No direct or indirect transfer of structured settlement payment
rights shall be effective and no structured settlement obligor or
annuity issuer shall be required to make any payment directly or
indirectly to any transferee of structured settlement payment rights
unless the transfer has been authorized in advance in a final order of a
court of competent jurisdiction based upon express findings by such
court that:
(a) the transfer complies with the requirements of this title;
(b) the transfer is in the best interest of the payee, taking into
account the welfare and support of the payee’s dependants; and whether
the transaction, including the discount rate used to determine the gross
advance amount and the fees and expenses used to determine the net
advance amount, are fair and reasonable. Provided the court makes the
findings as outlined in this subdivision, there is no requirement for
the court to find that an applicant is suffering from a hardship to
approve the transfer of structured settlement payments under this
subdivision;
(c) the payee has been advised in writing by the transferee to seek
independent professional advice regarding the transfer and has either
received such advice or knowingly waived such advice in writing;
(d) the transfer does not contravene any applicable statute or the
order of any court or other government authority; and
(e) is written in plain language and in compliance with section 5-702
of this article.
§ 5-1707. Effects of transfer of structured settlement payment rights.
Following a transfer of structured settlement payment rights under this
title:
(a) 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;
(b) The transferee shall be liable to the structured settlement
obligor and the annuity issuer:
(i) if the transfer contravenes the terms of the structured
settlement, for any taxes incurred by such parties as a consequence of
the transfer; and
(ii) for any other liabilities or costs, including reasonable costs
and attorneys’ fees, arising from compliance by such parties with the
order of the court or arising as a consequence of the transferee’s
failure to comply with this title;
(c) 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;
and
(d) Any further transfer of structured settlement payment rights by
the payee may be made only after compliance with all of the requirements of this title.
§ 5-1708. General provisions; construction. (a) The provisions of this
title may not be waived by any payee.
(b) Any transfer agreement entered into on or after the effective date
of this title by a payee who resides in this state shall provide that
disputes under such transfer agreement, including any claim that the
payee has breached the agreement, shall be determined in and under the
laws of this state. No such transfer agreement shall authorize the
transferee or any other party to confess judgment or consent to entry of
judgment against the payee.
(c) No transfer of structured settlement payment rights shall extend
to any payments that are life-contingent unless, prior to the date on
which the payee signs the transfer agreement, the transferee has
established and has agreed to maintain procedures reasonably
satisfactory to the annuity issuer and the structured settlement obligor
for (i) periodically confirming the payee’s survival, and (ii) giving
the annuity issuer and the structured settlement obligor prompt written
notice in the even of the payee’s death.
(d) No payee who proposes to make a transfer of structured settlement
payment rights shall incur any penalty, forfeit any application fee or
other payment, or otherwise incur any liability to the proposed
transferee or any assignee based on any failure of such transfer to
satisfy the conditions of this title.
(e) Nothing contained in this title shall be construed to authorize
any transfer of structured settlement payment rights in contravention of
any statute or to imply that any transfer under a transfer agreement
entered into prior to the effective date of this title is valid or
invalid.
(f) Compliance with the requirements set forth in section 5-1703 of
this title and fulfillment of the conditions set forth in section 5-1705
of this title shall be solely the responsibility of the transferee in
any transfer of structured settlement payment rights, and neither the
structured settlement obligor nor the annuity issuer shall bear any
responsibility for, or any liability arising from, non-compliance with
such requirements or failure to fulfill such conditions.
(g) The assignee of any transfer agreement or any agreement executed
in connection therewith, shall be subject to all claims and defenses of
the payee against the transferee arising from such transfer agreement
notwithstanding any agreement to the contrary. Recovery hereunder by the
payee shall not exceed the amount owing to the assignee at the time the
claim or defense is asserted against the assignee. Rights of the payee
under this provision can be asserted affirmatively against a claim by
the assignee.
§ 5-1708-a. Waiver for families of victims of terrorist attacks.
Notwithstanding the provisions of section four thousand two hundred
twenty-four of the insurance law:
(a) An annuity issuer, or an employee or other representative of such
issuer, shall be permitted to waive or offer to waive the commission or
other compensation otherwise payable thereto as a result of the sale of
a policy or contract subject to the provisions of section four thousand
two hundred twenty-four of the insurance law to a member of the
immediate family of a person who was a victim of the September eleventh,
two thousand one terrorist attacks against the United States; and
(b) In connection with such waiver, the insurance company may, at the
election of the policyowner or contract owner:
(i) contribute the amount of such waived commission or other
compensation to a charitable organization that meets the requirements of
section 501(c)(3) of the Internal Revenue Code of 1986, as amended, and
is organized for the benefit of families of victims of such attack; or
(ii) deduct from the premium an amount equal to such waived commission
or other compensation otherwise payable thereto as a result of the sale.
(c) For purposes of this section, the term “victim” shall mean a
decedent who died as a result of wounds or injury incurred as a result
of the terrorist attacks against the World Trade Center or the Pentagon
on September eleventh, two thousand one, or the terrorist-related
aircraft crash in Pennsylvania on such date, but shall not include any
individual identified by the United States attorney general to have been
a participant or conspirator in such attack or a representative of such
an individual.
(d) An issuer seeking to avail itself of the provisions of this
section shall first submit its plan of implementation to the
superintendent of insurance for prior approval. If the plan is approved,
such issuer shall thereafter, upon request of such superintendent,
submit a report to such superintendent regarding its experience in the
implementation of such provisions.
§ 5-1709. Enforcement. (a) In addition to the other remedies provided,
whenever there shall be a violation of this title, application may be
made by the attorney general in the name of the people of the state of New York to a court of competent jurisdiction by a
special proceeding to issue an injunction, and upon notice to the defendant of not less than five days, to enjoin and restrain the
continuance of such violations; and if it shall appear to the satisfaction of the court or justice that the defendant has, in fact,
violated this title, an injunction may be issued by such court or justice, enjoining and restraining any further violation, without
requiring proof that any person has, in fact, been injured or damaged thereby. In any such proceedings, the court may make
allowances to the attorney general as provided in paragraph six of subdivision (a) of section eighty-three hundred three of the
civil practice law and rules, and direct restitution. Whenever the court shall determine that a violation of this title has occurred,
the court may impose a civil penalty of not more than one thousand dollars for each violation. In connection with any such
proposed application, the attorney general is authorized to take proof and make a determination of the relevant facts and to
issue subpoenas in accordance with the civil practice law and rules. (b) Any payee injured by a violation of this title may bring
an action for the recovery of damages. The court may award reasonable attorney’s fees to the prevailing plaintiff.
