Florida Senate - 2014                                    SB 1578
       
       
        
       By Senator Gibson
       
       
       
       
       
       9-01416-14                                            20141578__
    1                        A bill to be entitled                      
    2         An act relating to the transfer of structured
    3         settlement payment rights; amending s. 626.99296,
    4         F.S.; specifying a limitation on the amount of the
    5         discount rate used to determine the net amount payable
    6         to the payee; providing an effective date.
    7          
    8  Be It Enacted by the Legislature of the State of Florida:
    9  
   10         Section 1. Paragraph (a) of subsection (3) of section
   11  626.99296, Florida Statutes, is amended to read:
   12         626.99296 Transfers of structured settlement payment
   13  rights.—
   14         (3) CONDITIONS TO TRANSFERS OF STRUCTURED SETTLEMENT
   15  PAYMENT RIGHTS AND STRUCTURED SETTLEMENT AGREEMENTS.—
   16         (a) A direct or indirect transfer of structured settlement
   17  payment rights is not effective and a structured settlement
   18  obligor or annuity issuer is not required to make a payment
   19  directly or indirectly to a transferee of structured settlement
   20  payment rights unless the transfer is authorized in advance in a
   21  final court order by a court of competent jurisdiction which is
   22  based on the following written express findings of by the court
   23  that:
   24         1. The transfer complies with this section and does not
   25  contravene other applicable law;
   26         2. At least 10 days before the date on which the payee
   27  first incurred an obligation with respect to the transfer, the
   28  transferee provided to the payee a disclosure statement in bold
   29  type, at least no smaller than 14 points in size, which
   30  specifies:
   31         a. The amounts and due dates of the structured settlement
   32  payments to be transferred;
   33         b. The aggregate amount of the payments;
   34         c. The discounted present value of the payments, together
   35  with the discount rate used in determining the discounted
   36  present value;
   37         d. The gross amount payable to the payee in exchange for
   38  the payments;
   39         e. An itemized listing of all brokers’ commissions, service
   40  charges, application fees, processing fees, closing costs,
   41  filing fees, referral fees, administrative fees, legal fees, and
   42  notary fees and other commissions, fees, costs, expenses, and
   43  charges payable by the payee or deductible from the gross amount
   44  otherwise payable to the payee;
   45         f. The net amount payable to the payee after deducting all
   46  commissions, fees, costs, expenses, and charges described in
   47  sub-subparagraph e.;
   48         g. The quotient, expressed as a percentage, obtained by
   49  dividing the net payment amount by the discounted present value
   50  of the payments, which must be disclosed in the following
   51  statement: “The net amount that you will receive from us in
   52  exchange for your future structured settlement payments
   53  represent .... percent of the estimated current value of the
   54  payments based upon the discounted value using the applicable
   55  federal rate”;
   56         h. The effective annual interest rate, which must be
   57  disclosed in the following statement: “Based on the net amount
   58  that you will receive from us and the amounts and timing of the
   59  structured settlement payments that you are turning over to us,
   60  you will, in effect, be paying interest to us at a rate of ....
   61  percent per year”; and
   62         i. The amount of any penalty and the aggregate amount of
   63  any liquidated damages, including penalties, payable by the
   64  payee in the event of a breach of the transfer agreement by the
   65  payee;
   66         3. The discount rate used in determining the net amount
   67  payable to the payee, as provided in subparagraph 2., does not
   68  exceed an annual percentage rate of the prime rate plus 5
   69  percentage points calculated as if the net amount payable to the
   70  payee, as provided in sub-subparagraph 2.f., were the principal
   71  of a consumer loan made by the transferee to the payee, and as
   72  if the structured settlement payments to be transferred to the
   73  transferee were the payee’s payments of principal plus interest
   74  on such loan. For the purpose of this subparagraph, the prime
   75  rate shall be as reported by the Federal Reserve Statistical
   76  Release H.15 on the first Monday of the month in which the
   77  transfer agreement is signed by both the payee and the
   78  transferee; however, if the transfer agreement is signed before
   79  the first Monday of that month, the prime rate shall be as
   80  reported by the Federal Reserve Statistical Release H.15 on the
   81  first Monday of the preceding month;
   82         4.3. The payee has established that the transfer is in the
   83  best interests of the payee, taking into account the welfare and
   84  support of the payee’s dependents;
   85         5.4. The payee has received, or waived his or her right to
   86  receive, independent professional advice regarding the legal,
   87  tax, and financial implications of the transfer;
   88         6.5. The transferee has given written notice of the
   89  transferee’s name, address, and taxpayer identification number
   90  to the annuity issuer and the structured settlement obligor and
   91  has filed a copy of the notice with the court;
   92         7.6. The transfer agreement provides that if the payee is
   93  domiciled in this state, any disputes between the parties are
   94  will be governed in accordance with the laws of this state and
   95  that the domicile state of the payee is the proper venue to
   96  bring a any cause of action arising out of a breach of the
   97  agreement; and
   98         8.7. The court has determined that the net amount payable
   99  to the payee is fair, just, and reasonable under the
  100  circumstances then existing.
  101         Section 2. This act shall take effect July 1, 2014.