SF 3463

as introduced - 92nd Legislature (2021 - 2022) Posted on 03/15/2022 10:20am

A bill for an act
relating to civil law; requiring structured settlement purchase companies to register,
provide a surety bond, and provide disclosures to payees; prohibiting certain
practices; authorizing a civil cause of action; requiring judicial approval; amending
Minnesota Statutes 2020, section 549.30, subdivisions 1, 5, 6, 7, 9, 13, 15, 17, by
adding subdivisions; proposing coding for new law in Minnesota Statutes, chapter
549; repealing Minnesota Statutes 2020, sections 549.30, subdivision 3; 549.31;
549.32; 549.33; 549.34.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2020, section 549.30, subdivision 1, is amended to read:

Subdivision 1.

Application.

For purposes of sections 549.30 to deleted text begin 549.34 deleted text end new text begin 549.41 new text end , the terms
defined in this section have the meanings given them.

Sec. 2.

Minnesota Statutes 2020, section 549.30, is amended by adding a subdivision to
read:

new text begin Subd. 3a. new text end

new text begin Assignee. new text end

new text begin "Assignee" means a person acquiring or proposing to acquire
structured settlement payments from a structured settlement purchase company or transferee
after, or concurrently with, the transfer of the structured settlement payment rights by the
payee to the structured settlement purchase company or transferee.
new text end

Sec. 3.

Minnesota Statutes 2020, section 549.30, is amended by adding a subdivision to
read:

new text begin Subd. 3b. new text end

new text begin Commissioner. new text end

new text begin "Commissioner" means the commissioner of commerce.
new text end

Sec. 4.

Minnesota Statutes 2020, section 549.30, subdivision 5, is amended to read:

Subd. 5.

Discounted present value.

"Discounted present value" means deleted text begin , with respect to
a proposed transfer of structured settlement payment rights, deleted text end the deleted text begin fair deleted text end present value of future
payments, as determined by discounting the 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.

Sec. 5.

Minnesota Statutes 2020, section 549.30, is amended by adding a subdivision to
read:

new text begin Subd. 5a. new text end

new text begin Gross advance amount. new text end

new text begin "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.
new text end

Sec. 6.

Minnesota Statutes 2020, section 549.30, subdivision 6, is amended to read:

Subd. 6.

Independent professional advice.

"Independent professional advice" means
advice of an attorney, certified public accountant, actuary, or other new text begin licensed new text end professional
adviser deleted text begin : (1) who is engaged by a payee to render advice concerning the legal, tax, and
financial implications of a transfer of structured settlement payment rights; (2) who is not
in any manner affiliated with or compensated by the transferee of the transfer; and (3) whose
compensation for providing the advice is not affected by whether a transfer occurs or does
not occur deleted text end .

Sec. 7.

Minnesota Statutes 2020, section 549.30, subdivision 7, is amended to read:

Subd. 7.

Interested parties.

"Interested parties" means the payee, a beneficiary
new text begin irrevocably new text end designated under the annuity contract to receive payments following the payee's
death or, if the designated beneficiary is a minor, the designated beneficiary's parent or
guardian, the annuity issuer, the structured settlement obligor, and any other party that has
continuing rights or obligations new text begin to receive or make payments new text end under the structured settlement.

Sec. 8.

Minnesota Statutes 2020, section 549.30, is amended by adding a subdivision to
read:

new text begin Subd. 7a. new text end

new text begin Net advance amount. new text end

new text begin "Net advance amount" means the gross advance amount,
less the aggregate amount of the actual and estimated transfer expenses.
new text end

Sec. 9.

Minnesota Statutes 2020, section 549.30, is amended by adding a subdivision to
read:

new text begin Subd. 8a. new text end

new text begin Periodic payments. new text end

new text begin "Periodic payments" includes both recurring payments
and scheduled future lump-sum payments.
new text end

Sec. 10.

Minnesota Statutes 2020, section 549.30, subdivision 9, is amended to read:

Subd. 9.

Qualified assignment agreement.

"Qualified assignment agreement" means
an agreement providing for a qualified assignment as provided by the United States Internal
Revenue Code, title 26, section 130, as amended deleted text begin through December 31, 1998 deleted text end .

Sec. 11.

Minnesota Statutes 2020, section 549.30, subdivision 13, is amended to read:

Subd. 13.

Structured settlement agreement.

"Structured settlement agreement" means
the agreement, judgment, stipulation, or release embodying the terms of a structured
settlement deleted text begin , including the rights of the payee to receive periodic payments deleted text end .

Sec. 12.

Minnesota Statutes 2020, section 549.30, subdivision 15, is amended to read:

Subd. 15.

Structured settlement payment rights.

"Structured settlement payment
rights" means rights to receive periodic payments deleted text begin , including lump-sum payments, deleted text end under a
structured settlement, whether from the settlement obligor or the annuity issuer, where: (1)
the payee or any other interested party is domiciled in the state; new text begin or new text end (2) the structured
settlement agreement was approved by a court or responsible administrative authority in
the state deleted text begin ; or (3) the settled claim was pending before the courts of this state when the parties
entered into the structured settlement agreement deleted text end .

Sec. 13.

Minnesota Statutes 2020, section 549.30, is amended by adding a subdivision to
read:

new text begin Subd. 15a. new text end

new text begin Structured settlement purchase company. new text end

new text begin "Structured settlement purchase
company" means a person that acts as a transferee in this state and who is registered with
the commissioner pursuant to section 549.35.
new text end

Sec. 14.

Minnesota Statutes 2020, section 549.30, is amended by adding a subdivision to
read:

new text begin Subd. 15b. new text end

new text begin Structured settlement transfer proceeding. new text end

new text begin "Structured settlement transfer
proceeding" means a court proceeding filed by a structured settlement purchase company
seeking court approval of a transfer in accordance with sections 549.30 to 549.41.
new text end

Sec. 15.

Minnesota Statutes 2020, section 549.30, subdivision 17, is amended to read:

Subd. 17.

Transfer.

"Transfer" means a sale, assignment, pledge, hypothecation, or
other form of alienation or encumbrance made by a payee for consideration. new text begin A 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.
new text end

Sec. 16.

Minnesota Statutes 2020, section 549.30, is amended by adding a subdivision to
read:

new text begin Subd. 18a. new text end

new text begin Transfer expense. new text end

new text begin "Transfer expense" 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, attorney's fees, escrow
fees, lien recordation fees, judgment and lien search fees, finders' fees, commissions, and
other payments to a broker or other intermediary. The term does not include preexisting
obligations of the payee payable for the payee's account from the proceeds of the transfer.
new text end

Sec. 17.

Minnesota Statutes 2020, section 549.30, is amended by adding a subdivision to
read:

new text begin Subd. 18b. new text end

new text begin Transfer order. new text end

new text begin "Transfer order" means an order approving a transfer in
accordance with sections 549.30 to 549.41.
new text end

Sec. 18.

new text begin [549.35] REGISTRATION; SURETY BOND.
new text end

new text begin Subdivision 1. new text end

new text begin Registration required. new text end

new text begin A person shall not act as a transferee, attempt to
acquire structured settlement payment rights through a transfer from a payee who resides
in this state, or file a structured settlement transfer proceeding unless the person is registered
with the commissioner to do business in this state as a structured settlement purchase
company.
new text end

new text begin Subd. 2. new text end

new text begin Forms; process. new text end

new text begin A person may apply pursuant to this section with the
commissioner of commerce for a registration to do business in this state as a structured
settlement purchase company. An application for an initial or renewed registration must be
submitted on a form prescribed by the commissioner. An initial or renewed registration is
valid for one year from the date it is issued, expires one year after it is issued, and may be
renewed annually by the registrant on or before the expiration date.
new text end

new text begin Subd. 3. new text end

new text begin Application; surety bond. new text end

new text begin (a) Each initial or renewal application must contain
a sworn certification by an owner; officer; director or manager of the applicant, if the
applicant is not a natural person; or by the applicant if the applicant is a natural person,
certifying that:
new text end

new text begin (1) the applicant has secured a surety bond payable to the state, has been issued a letter
of credit, or has posted a cash bond in the amount of $50,000. The security device must be
in a form satisfactory to the commissioner and must run to the state for the benefit of any
payee claimant to secure the faithful performance of the obligation of the structured
settlement purchase company under the law; and
new text end

new text begin (2) the applicant shall comply with sections 549.30 to 549.41 when acting as a structured
settlement purchase company and filing structured settlement transfer proceedings.
new text end

new text begin (b) A surety bond, letter of credit, or cash bond obtained under this section must be
effective concurrently with the registration of the applicant and must remain in effect for
not less than three years after the expiration or termination of the registration. The surety
bond, letter of credit, or cash bond must be renewed each year as needed to keep it
continuously in effect when the registration of the applicant is renewed.
new text end

new text begin Subd. 4. new text end

new text begin Postjudgment notice. new text end

new text begin No later than ten days after a judgment is obtained
against a structured settlement purchase company by a payee, the structured settlement
purchase company shall file a notice with the commissioner and, if applicable, the surety
which issued the surety bond used by the structured settlement purchase company to satisfy
the requirements under subdivision 3. The notice must contain:
new text end

new text begin (1) a copy of the judgment;
new text end

new text begin (2) the name and address of the judgment creditor; and
new text end

new text begin (3) the status of the matter, including whether the judgment will be appealed or has been
paid or satisfied.
new text end

new text begin Subd. 5. new text end

new text begin Effect on liability and transfer orders. new text end

new text begin (a) The liability of the surety which
issued a surety bond used by a structured settlement purchase company to satisfy the
requirements under subdivision 3 must not be affected by a:
new text end

new text begin (1) breach of contract, breach of warranty, failure to pay a premium, or other act or
omission of the structured settlement purchase company; or
new text end

new text begin (2) insolvency or bankruptcy of the structured settlement purchase company.
new text end

new text begin (b) Except as otherwise provided in section 549.36, a transfer order signed by a court
of competent jurisdiction pursuant to section 549.40 constitutes a qualified order under
United States Code, title 26, section 5891. If a transferee to which the transfer order applies
is not registered as a structured settlement purchase company pursuant to this section at the
time the transfer order is signed, the transfer order does not constitute a qualified order
under United States Code, title 26, section 5891.
new text end

new text begin Subd. 6. new text end

new text begin Cancellation or modification. new text end

new text begin (a) A surety which issued a surety bond used
by a structured settlement purchase company to satisfy the requirements under subdivision
3 and the structured settlement purchase company which obtained the surety bond shall not
cancel or modify the surety bond during the term for which it is issued unless the surety or
the structured settlement purchase company provides written notice to the commissioner at
least 20 days before the effective date of the cancellation or modification.
new text end

new text begin (b) If a surety bond used by a structured settlement purchase company to satisfy the
requirements of subdivision 3 is modified so as to make the surety bond not comply with
any provision of sections 549.30 to 549.41, or the surety bond is canceled, the registration
of the structured settlement purchase company automatically expires on the effective date
of the modification or cancellation unless a new surety bond, letter of credit, or cash bond
which complies with sections 549.30 to 549.41, is filed with the commissioner on or before
the effective date of the modification or cancellation.
new text end

new text begin (c) A modification or cancellation of a surety bond used by a structured settlement
purchase company to satisfy the requirements of subdivision 3 does not affect any liability
of the bonded surety company incurred before the modification or cancellation of the surety
bond.
new text end

new text begin Subd. 7. new text end

new text begin Exemptions. new text end

new text begin (a) An assignee is not required to register as a structured settlement
purchase company to acquire structured settlement payment rights or to take security interest
in structured settlement payment rights that were transferred by the payee to a structured
settlement purchase company.
new text end

new text begin (b) An employee of a structured settlement purchase company, if acting on behalf of the
structured settlement purchase company in connection with a transfer, is not required to be
registered.
new text end

Sec. 19.

new text begin [549.36] PROHIBITED PRACTICES; PRIVATE RIGHT OF ACTION;
PENALTIES.
new text end

new text begin Subdivision 1. new text end

new text begin Prohibited practices. new text end

new text begin A transferee or structured settlement purchase
company and an employee or other representative of a transferee or structured settlement
purchase company shall not engage in the following actions:
new text end

new text begin (1) pursue or complete a transfer with a payee without complying with all applicable
provisions of sections 549.30 to 549.41;
new text end

new text begin (2) refuse or fail to fund a transfer after court approval of the transfer;
new text end

new text begin (3) acquire structured settlement payment rights from a payee without complying with
all applicable provisions of sections 549.30 to 549.41, including obtaining court approval
of the transfer;
new text end

new text begin (4) intentionally file a structured settlement transfer proceeding in any court other than
the court specified in section 549.40, unless the transferee is required to file in a different
court by applicable law;
new text end

new text begin (5) except as otherwise provided in this paragraph, pay a commission or finder's fee to
any person for facilitating or arranging a structured settlement transfer with a payee. The
provisions of this paragraph do not prevent a structured settlement purchase company from
paying:
new text end

new text begin (i) a commission or finder's fee to a person who is a structured settlement purchase
company or is an employee of a structured settlement purchase company;
new text end

new text begin (ii) routine transfer expenses to third parties, including without limitation court filing
fees, escrow fees, lien recordation fees, judgment and lien search fees, attorney's fees, and
other similar fees relating to a transfer; or
new text end

new text begin (iii) a reasonable referral fee to an attorney, certified public accountant, actuary, licensed
insurance agent, or other licensed professional adviser in connection with a transfer;
new text end

new text begin (6) intentionally advertise materially false or misleading information regarding the
products or services of the transferee or structured settlement purchase company;
new text end

new text begin (7) attempt to coerce, bribe, or intimidate a payee seeking to transfer structured settlement
payment rights;
new text end

new text begin (8) attempt to defraud a payee or any party to a structured settlement transfer or any
interested party in a structured settlement transfer proceeding by means of forgery or false
identification;
new text end

new text begin (9) except as otherwise provided in this clause, intervene in a pending structured
settlement transfer proceeding if the transferee or structured settlement purchase company
is not a party to the proceeding or an interested party relative to the proposed transfer which
is the subject of the pending structured settlement transfer proceeding. The provisions of
this clause do not prevent a structured settlement purchase company from intervening in a
pending structured settlement transfer proceeding if the payee has signed a transfer agreement
with the structured settlement purchase company within 60 days before the filing of the
pending structured settlement transfer proceeding and the structured settlement purchase
company which filed the pending structured settlement transfer proceeding violated any
provision in sections 549.30 to 549.41 in connection with the proposed transfer that is the
subject of the pending structured settlement transfer proceeding;
new text end

new text begin (10) except as otherwise provided in this clause, knowingly contact a payee who has
signed a transfer agreement and is pursuing a proposed transfer with another structured
settlement purchase company for the purpose of inducing the payee into cancelling the
proposed transfer or transfer agreement with the other structured settlement purchase
company if a structured settlement transfer proceeding has been filed by the other structured
settlement purchase company and is pending. The provisions of this clause do not apply if
no hearing has been held in the pending structured settlement transfer proceeding within
90 days after the filing of the pending structured settlement transfer proceeding; or
new text end

new text begin (11) fail to dismiss a pending structured settlement transfer proceeding at the request of
the payee. A dismissal of a structured settlement proceeding after a structured settlement
purchase company has violated the provisions of this clause does not exempt the structured
settlement purchase company from any liability under this section.
new text end

new text begin Subd. 2. new text end

new text begin Civil action; remedies. new text end

new text begin (a) A payee may bring a civil action in district court
alleging a violation of subdivision 1 and may recover all damages and pursue all rights and
remedies to which the payee may be entitled pursuant to sections 549.30 to 549.41, or any
other applicable law.
new text end

new text begin (b) A structured settlement purchase company may bring a civil action in district court
to enforce subdivision 1, clauses (4), (7), and (9) to (11), and may recover all damages and
pursue all remedies to which the structured settlement purchase company may be entitled
pursuant to sections 549.30 to 549.41, or any other applicable law.
new text end

new text begin (c) If a court finds that a structured settlement purchase company or transferee is in
violation of subdivision 1, the court may:
new text end

new text begin (1) revoke the registration of the structured settlement purchase company;
new text end

new text begin (2) suspend the registration of the structured settlement purchase company for a period
to be determined at the discretion of the court; and
new text end

new text begin (3) enjoin the structured settlement purchase company or transferee from filing new
structured settlement transfer proceedings in this state or otherwise pursuing transfers in
this state.
new text end

Sec. 20.

new text begin [549.37] REQUIRED DISCLOSURES TO PAYEE.
new text end

new text begin Not less than ten days before the date on which a payee signs a transfer agreement, the
transferee shall provide to the payee a separate disclosure statement, in bold type no smaller
than 14-point font, setting forth the following:
new text end

new text begin (1) the amounts and due dates of the structured settlement payments to be transferred;
new text end

new text begin (2) the aggregate amount of such payments;
new text end

new text begin (3) the discounted present value of the payments to be transferred, which must 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;
new text end

new text begin (4) the gross advance amount;
new text end

new text begin (5) an itemized list of all applicable transfer expenses, other than attorney's fees and
related disbursements, payable in connection with the transferee's application for approval
of the transfer, and the transferee's best estimate of the amount of any such attorney's fees
and related disbursements;
new text end

new text begin (6) the effective annual interest rate, which must be disclosed in a statement in the
following form: "On the basis of the net amount that you will receive from us and the
amounts and timing of the structured settlement payments that you are transferring to us,
you will, in effect be paying interest to us at a rate of ....... percent per year.";
new text end

new text begin (7) the net advance amount;
new text end

new text begin (8) 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;
new text end

new text begin (9) that the payee has the right to cancel the transfer agreement, without penalty or further
obligation, until the transfer is approved by the court;
new text end

new text begin (10) that the payee has the right to seek and receive independent professional advice
regarding the proposed transfer and should consider doing so before agreeing to the transfer
of any structured settlement payment rights; and
new text end

new text begin (11) that the payee has the right to seek out and consider additional offers for transferring
the structured settlement payment rights and should do so.
new text end

Sec. 21.

new text begin [549.38] APPROVAL OF TRANSFERS OF STRUCTURED SETTLEMENT
PAYMENT RIGHTS.
new text end

new text begin 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 or assignee of structured settlement payment rights
unless the transfer has been approved in advance in a final court order based on express
findings by the court that:
new text end

new text begin (1) the transfer is in the best interests of the payee, taking into account the welfare and
support of the payee's dependents, if any;
new text end

new text begin (2) the payee has been advised in writing by the transferee to seek independent
professional advice regarding the transfer and has either received advice or knowingly
waived in writing the opportunity to seek and receive advice; and
new text end

new text begin (3) the transfer does not contravene any applicable statute or order of any court or other
governmental authority.
new text end

Sec. 22.

new text begin [549.39] EFFECTS OF TRANSFER OF STRUCTURED SETTLEMENT
PAYMENT RIGHTS.
new text end

new text begin Following a transfer of structured settlement payment rights:
new text end

new text begin (1) the structured settlement obligor and the annuity issuer may rely on the court order
approving the transfer in redirecting periodic payments to an assignee or transferee in
accordance with the order approving the transfer and shall, as to all parties except the
transferee or an assignee designated by the transferee, be discharged and released from any
and all liability for the redirected payments and such discharge and release shall not be
affected by the failure of any party to the transfer to comply with this chapter or with the
court order approving the transfer;
new text end

new text begin (2) the transferee is liable to the structured settlement obligor and the annuity issuer:
new text end

new text begin (i) if the transfer contravenes the terms of the structured settlement, for any taxes incurred
by the structured settlement obligor or annuity issuer as a consequence of the transfer; and
new text end

new text begin (ii) for any other liabilities or costs, including reasonable costs and attorneys' fees, arising
from compliance by the structured settlement obligor or annuity issuer with the court order
or order of the responsible administrative authority approving the transfer or from the failure
of any party to the transfer to comply with sections 549.30 to 549.41;
new text end

new text begin (3) 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
new text end

new text begin (4) any further transfer of structured settlement payment rights by the payee may be
made only after compliance with all of the requirements of sections 549.30 to 549.41.
new text end

Sec. 23.

new text begin [549.40] PROCEDURE FOR APPROVAL OF TRANSFERS.
new text end

new text begin Subdivision 1. new text end

new text begin Application; proof of registration. new text end

new text begin An application under sections 549.30
to 549.41 for approval of a transfer of structured settlement payment rights must be made
by the transferee. The application must be brought in the district court of the county in which
the payee is domiciled, except that the application may be brought in the court in this state
that approved the structured settlement agreement if the structured settlement agreement
requires the application be brought in that court. At the time an application is made under
this section for the approval of a transfer of structured settlement payment rights, the
application of the transferee must include evidence that the transferee is registered to do
business in this state as a structured settlement purchase company pursuant to section 549.35.
new text end

new text begin Subd. 2. new text end

new text begin Hearing. new text end

new text begin A timely hearing must be held on an application for approval of a
transfer of structured settlement payment rights. The payee must appear in person at the
hearing, unless the court determines that good cause exists to excuse the payee from
appearing in person.
new text end

new text begin Subd. 3. new text end

new text begin Notice. new text end

new text begin Not less than 20 days before the scheduled hearing on any application
for approval of a transfer of structured settlement payment rights pursuant to sections 549.30
to 549.41, the transferee shall file with the court and serve on all interested parties a notice
of the proposed transfer and application for authorization, including with such notice:
new text end

new text begin (1) a copy of the transferee's application;
new text end

new text begin (2) a copy of the transfer agreement;
new text end

new text begin (3) a copy of the disclosure statement required by section 549.37;
new text end

new text begin (4) the payee's name, age, county of domicile, and the number and ages of each of the
payee's dependents;
new text end

new text begin (5) a summary of:
new text end

new text begin (i) any prior transfers by the payee to the transferee or an affiliate, or through the
transferee or an affiliate to an assignee, within the four years preceding the date of the
transfer agreement and any proposed transfers by the payee to the transferee or an affiliate,
or through the transferee or an affiliate, applications for approval of which were denied
within the two years preceding the date of the transfer agreement; and
new text end

new text begin (ii) any prior transfers by the payee to any person or entity other than the transferee or
an affiliate or an assignee of the transferee or an affiliate within the three years preceding
the date of the transfer agreement and any prior proposed transfers by the payee to any
person or entity other than the transferee or an affiliate or an assignee of a transferee or
affiliate, applications for approval of which were denied within the one year preceding the
date of the current transfer agreement, to the extent that the transfers or proposed transfers
have been disclosed to the transferee by the payee in writing or otherwise are actually known
to the transferee;
new text end

new text begin (6) notification that any interested party is entitled to support, oppose, or otherwise
respond to the transferee's application, either in person or by counsel, by submitting written
comments to the court or by participating in the hearing; and
new text end

new text begin (7) notification of the time and place of the hearing and notification of the manner in
which and the date by which written responses to the application must be filed to be
considered by the court, which must not be less than five days before the hearing.
new text end

new text begin Subd. 4. new text end

new text begin Dismissal. new text end

new text begin If the payee cancels a transfer agreement or if the transfer agreement
otherwise terminates, after an application for approval of a transfer of structured settlement
payment rights has been filed and before it has been granted or denied, the transferee must
promptly request the dismissal of the application.
new text end

Sec. 24.

new text begin [549.41] GENERAL PROVISIONS; CONSTRUCTION.
new text end

new text begin Subdivision 1. new text end

new text begin Waiver prohibited. new text end

new text begin The provisions of sections 549.30 to 549.41 may
not be waived by a payee.
new text end

new text begin Subd. 2. new text end

new text begin Choice of law; venue. new text end

new text begin Any transfer agreement entered into by a payee who is
domiciled in this state must provide that dispute under the transfer agreement, including
any claims that the payee has breached the agreement, and must 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.
new text end

new text begin Subd. 3. new text end

new text begin Life-contingent payments. new text end

new text begin 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
(1) periodically confirms the payee's survival, and (2) gives the annuity issuer and the
structured settlement obligor prompt written notice in the event of the payee's death.
new text end

new text begin Subd. 4. new text end

new text begin Liability. new text end

new text begin (a) 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 sections 549.30 to 549.41.
new text end

new text begin (b) Compliance with the requirements set forth in sections 549.30 to 549.41 are solely
the responsibility of the transferee in any transfer of structured settlement payment rights
and neither the structured settlement obligor nor the annuity issuer, if any, has any
responsibility for, or any liability arising from, noncompliance with such requirements or
failure to fulfill such conditions.
new text end

new text begin Subd. 5. new text end

new text begin Construction. new text end

new text begin (a) Nothing contained in sections 549.30 to 549.41 shall be
construed to authorize the transfer of workers' compensation payment rights in contravention
of applicable law or to give effect to the transfer of workers' compensation payment rights
that is invalid under applicable law.
new text end

new text begin (b) Nothing contained in sections 549.30 to 549.41 shall:
new text end

new text begin (1) be construed to authorize any transfer of structured settlement payment rights in
contravention of any applicable law or to imply that any transfer under a transfer agreement
entered into before August 1, 2022, is valid or invalid; or
new text end

new text begin (2) affect the validity of any transfer of structured settlement payment rights, whether
under a transfer agreement entered into or filed before August 1, 2022, in which the structured
settlement obligor and annuity issuer waived or has not asserted their rights under terms of
the structured settlement prohibiting or restricting the sale, assignment, or encumbrance of
the structured settlement payment rights.
new text end

new text begin Subd. 6. new text end

new text begin Application. new text end

new text begin Sections 549.30 to 549.41 apply to any transfer of structured
settlement payment rights filed on or after August 1, 2022.
new text end

Sec. 25. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2020, sections 549.30, subdivision 3; 549.31; 549.32; 549.33; and
549.34, new text end new text begin are repealed.
new text end

Sec. 26. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 24 are effective August 1, 2022, and apply to transfers of structured
settlement payment rights filed on or after that date.
new text end

APPENDIX

Repealed Minnesota Statutes: 22-06161

549.30 DEFINITIONS.

Subd. 3.

Applicable law.

"Applicable law" means: (1) the laws of the United States; (2) the laws of this state, including principles of equity applied in the courts of this state; and (3) the laws of any other jurisdiction: (i) which is the domicile of the payee or any other interested party; (ii) under whose laws a structured settlement agreement was approved by a court or responsible administrative authority; or (iii) in whose courts a settled claim was pending when the parties entered into a structured settlement agreement.

549.31 CONDITIONS TO TRANSFERS OF STRUCTURED SETTLEMENT PAYMENT RIGHTS AND STRUCTURED SETTLEMENT AGREEMENTS.

Subdivision 1.

Generally.

No direct or indirect transfer of structured settlement payment rights is effective and no structured settlement obligor or annuity issuer is required to make a payment directly or indirectly to a transferee of structured settlement payment rights unless the transfer has been authorized in advance in a final order of a court of competent jurisdiction or responsible administrative authority, based on the court's or responsible administrative authority's written express findings that:

(a) the transfer complies with the requirements of sections 549.31 to 549.34 and will not contravene other applicable law;

(b) not less than ten days before the date on which the payee first incurred an obligation with respect to the transfer, the transferee has provided to the payee a disclosure statement in bold type, no smaller than 14 points, specifying:

(1) the amounts and due dates of the structured settlement payments to be transferred;

(2) the aggregate amount of the payments;

(3) the discounted present value of the payments, together with the discount rate used in determining the discounted present value;

(4) the gross amount payable to the payee in exchange for the payments;

(5) an itemized listing of all brokers' commissions, service charges, application fees, processing fees, closing costs, filing fees, referral fees, administrative fees, legal fees, notary fees, and other commissions, fees, costs, expenses, and charges payable by the payee or deductible from the gross amount otherwise payable to the payee;

(6) the net amount payable to the payee after deduction of all commissions, fees, costs, expenses, and charges described in clause (5);

(7) the quotient, expressed as a percentage, obtained by dividing the net payment amount by the discounted present value of the payments; and

(8) the amount of any penalty and the aggregate amount of any liquidated damages, including penalties, payable by the payee in the event of a breach of the transfer agreement by the payee;

(c) the payee has established that the transfer is in the best interests of the payee and the payee's dependents;

(d) the payee has received independent professional advice regarding the legal, tax, and financial implications of the transfer;

(e) the transferee has given written notice of the transferee's name, address, and taxpayer identification number to the annuity issuer and the structured settlement obligor and has filed a copy of the notice with the court or responsible administrative authority; and

(f) that the transfer agreement provides that any disputes between the parties will be governed, interpreted, construed, and enforced in accordance with the laws of this state and that the domicile state of the payee is the proper place of venue to bring any cause of action arising out of a breach of the agreement. The transfer agreement must also provide that the parties agree to the jurisdiction of any court of competent jurisdiction located in this state.

If the transfer would contravene the terms of the structured settlement, upon the filing of a written objection by any interested party and after considering the objection and any response to it, the court or responsible administrative authority may grant, deny, or impose conditions upon the proposed transfer as the court or responsible administrative authority deems just and proper under the facts and circumstances in accordance with established principles of law. Any order approving a transfer must require that the transferee indemnify the annuity issuer and the structured settlement obligor for any liability including reasonable costs and attorney fees arising from compliance by the issuer or obligor with the order of the court or responsible administrative authority.

Subd. 2.

Unenforceable confessions of judgment.

A provision in a transfer agreement giving a transferee power to confess judgment against a payee is unenforceable to the extent the amount of the judgment would exceed the amount paid by the transferee to the payee, less any payments received from the structured settlement obligor or the payee.

Subd. 3.

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 structured settlement obligor 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:

(1) 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;

(2) the amount of the premium payable to the annuity issuer;

(3) the discounted present value of all periodic payments that are not life-contingent, together with the discount rate used in determining the discounted present value;

(4) the nature and amount of any cost that may be deducted from any of the periodic payments;

(5) 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

(6) that any transfer of the periodic payments by the claimant may subject the claimant to serious adverse tax consequences.

549.32 JURISDICTION; PROCEDURE FOR APPROVAL OF TRANSFERS.

Subdivision 1.

Jurisdiction.

The district court has nonexclusive jurisdiction over an application for authorization under section 549.31 of a transfer of structured settlement payment rights.

Subd. 2.

Notice.

Not less than 20 days before the scheduled hearing on an application for authorization of a transfer of structured settlement payment rights under section 549.31, the transferee shall file with the court or responsible administrative authority and serve on: any other government authority that previously approved the structured settlement; and all interested parties, a notice of the proposed transfer and the application for its authorization. The notice must include:

(1) a copy of the transferee's application to the court or responsible administrative authority;

(2) a copy of the transfer agreement;

(3) a copy of the disclosure statement required under section 549.31, subdivision 1, paragraph (b);

(4) notification that an interested party is entitled to support, oppose, or otherwise respond to the transferee's application, either in person or by counsel, by submitting written comments to the court or responsible administrative authority or by participating in the hearing;

(5) notification of the time and place of the hearing and notification of the manner in which and the time by which written responses to the application must be filed, in order to be considered by the court or responsible administrative authority. Written responses to the application must be filed within 15 days after service of the transferee's notice; and

(6) notification of the date and judicial district of any prior application for transfer filed by the transferee relating to a prior proposed transfer with the payee, including whether the prior application was granted or denied. If any prior application was granted, the notice shall provide the amount and due dates of any structured settlement payments that were transferred, the aggregate amount of the payments, the discounted present value of the payments, and the gross amount that was payable to the payee in exchange for the payments.

549.33 NO WAIVER; NO PENALTIES.

Subdivision 1.

No waiver.

The provisions of sections 549.30 to 549.34 may not be waived.

Subd. 2.

No penalty.

No payee who proposes to make a transfer of structured settlement payment rights shall incur a penalty, forfeit an application fee or other payment, or otherwise incur any liability to the proposed transferee based on the failure of the transfer to satisfy the conditions of section 549.31.

549.34 CONSTRUCTION.

Nothing contained in sections 549.30 to 549.34 may be construed to authorize the transfer of workers' compensation payment rights in contravention of applicable law or to give effect to the transfer of workers' compensation payment rights that is invalid under applicable law.