2023 Illinois Compiled Statutes › Chapter 215 - INSURANCE › 215 ILCS 153/ - Structured Settlement Protection Act.

(215 ILCS 153/1)
Sec. 1. 
		Short title. 
		This Act may be cited as the Structured Settlement
Protection Act.
(Source: P.A. 93-502, eff. 1-1-04.)
(215 ILCS 153/5)
Sec. 5. Definitions. For purposes of this Act:
"Annuity issuer" means an insurer that has issued a contract to fund
periodic payments under a structured settlement.
"Dependents" include a payee's spouse and minor children and all other
persons for whom the payee is legally obligated to provide support, including
maintenance.
"Discounted present value" means the present value of future payments
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.
"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.
"Independent professional advice" means advice of an attorney,
certified public accountant, actuary, or other licensed professional adviser.
"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 to the structured settlement that has continuing rights or
obligations
to receive or make payments under such structured settlement.
"Net advance amount" means the gross advance amount less the
aggregate amount of the actual and estimated transfer expenses required to be
disclosed under item (5) of Section 10 of this Act.
"Payee" means an individual who is receiving tax free payments under a
structured settlement and proposes to make a transfer of payment rights
thereunder.
"Periodic payments" includes both recurring payments and scheduled
future lump sum payments.
"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.
"Settled claim" means the original tort claim resolved by a structured settlement.
"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.
"Structured settlement agreement" means the agreement, judgment,
stipulation, or release embodying the terms of a structured settlement.
"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.
"Structured settlement payment rights" means rights to receive periodic
payments under a structured settlement, whether from the structured settlement
obligor or the annuity issuer, when:
(1) 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;
(2) the structured settlement agreement was approved     by a court in this State; or
(3) the structured settlement agreement is expressly     governed by the laws of this State.
"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 other
approval of any court or other
government authority that authorized or approved such structured settlement.
"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.
"Transfer agreement" means the agreement providing for a transfer of
structured settlement payment rights.
"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.
"Transferee" means a party acquiring or proposing to acquire structured
settlement payment rights through a transfer.
(Source: P.A. 99-286, eff. 8-5-15.)
(215 ILCS 153/10)
Sec. 10. Required disclosures to payee. Not less than 10 days prior to 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 points,
setting
forth all of the following:
(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 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 the discounted present value;
(4) the gross advance amount;
(5) an itemized listing of all applicable transfer     expenses, other than attorneys' 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 fees and disbursements;
(6) the net advance amount;
(7) 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;
(8) 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; and
(9)  the effective annual interest rate, which must     be disclosed in the following statement:  "Based on the net amount that you will receive from us and the amounts and timing of the structured settlement payments that you are turning over to us, you will, in effect, be paying interest to us at a rate of .... percent per year.". (Source: P.A. 99-286, eff. 8-5-15.)
(215 ILCS 153/15)
Sec. 15. 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 approved in advance in a final court order based on express findings by such court that:
(1) the transfer is in the best interest of the     payee, taking into account the welfare and support of the payee's dependents;
(2) 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 in writing the opportunity to seek and receive such advice; and
(3) the transfer does not contravene any applicable     statute or the order of any court or other government authority.
(Source: P.A. 99-286, eff. 8-5-15.)
(215 ILCS 153/20)
Sec. 20. Effects of transfer of structured settlement payment rights. Following a transfer of structured settlement payment rights approved under this Act:
(1) the structured settlement obligor and the annuity     issuer 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 transferred payments, and the discharge and release shall not be affected by the failure of any party to the transfer to comply with this Act or with the order of the court approving the transfer;
(2) the transferee shall be liable to the structured     settlement obligor and the annuity issuer:
(A) if the transfer contravenes the terms of the         structured settlement, for any taxes incurred by the parties as a consequence of the transfer; and
(B) 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 order of the court or from failure of any party to the transfer to comply with this Act;
(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 2 or more transferees or assignees; and
(4) any further transfer of structured settlement     payment rights by the payee may be made only after compliance with all of the requirements of this Act.
(Source: P.A. 99-286, eff. 8-5-15.)
(215 ILCS 153/25)
Sec. 25. Procedure for approval of transfers.
(a) No annuity issuer or structured settlement obligor may make payments on
a structured settlement to anyone other than the payee or beneficiary of the
payee without prior approval of the circuit court.  No payee or beneficiary of a payee of a structured settlement may
assign in any manner the structured settlement payment rights without the prior
approval of the circuit court.
(b) An application under this Act for approval of a transfer of structured
settlement payment rights shall be
made by the transferee and shall be brought in the circuit court of the
county in which the payee is domiciled, except that, if the payee is not domiciled in this State, the application may be filed in the court  in this State that approved the structured settlement agreement or in the circuit court of the county in this State  in which the structured settlement obligor or annuity issuer has its principal place of business.
(c) A hearing shall be held on an application for approval of a transfer of structured settlement payment rights. The payee shall appear in person at the hearing unless the court determines that good cause exists to excuse the payee from appearing. Not less than 20 days prior to the scheduled hearing on an application, the transferee shall file with the court and serve on all interested parties a notice of the proposed transfer and the application, including the information and documentation required under subsection (d) of this Section.
(d) In addition to complying with the other requirements of this Act, the application shall include:
(1) the payee's name, age, and county of domicile and     the number and ages of the payee's dependents;
(2) a copy of the transfer agreement and disclosure     statement;
(3) a description of the reasons why the payee seeks     to complete the proposed transfer;
(4) a summary of:
(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 4 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 to an assignee, applications for approval of which were denied within the 2 years preceding the date of the transfer agreement;
(ii) any prior transfers by the payee to any         person or entity other than the transferee or an affiliate or an assignee of a transferee or affiliate  within the 3 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 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 by the transferee;
(5)  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
(6)  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, which shall be not less than 5 days prior to the hearing, in order to be considered by the court. (Source: P.A. 99-286, eff. 8-5-15.)
(215 ILCS 153/30)
Sec. 30. General provisions; construction.
(a) The provisions of this Act may not be waived by any payee.
(b) Any transfer agreement entered into on or after the effective
date of this Act by a payee who is domiciled in this State shall provide that
disputes
under the 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 (1) periodically confirming the payee's
survival, and (2) giving the annuity issuer and the structured settlement
obligor
prompt written notice in the event 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 the transfer to satisfy the conditions of this
Act.
(e) Nothing contained in this Act shall be construed to authorize
any transfer of structured settlement payment rights in contravention of any
law. A court shall not be precluded from hearing an application for approval of a transfer of payment rights under a structured settlement where the terms of the structured settlement prohibit sale, assignment, or encumbrance of such payment rights, nor shall the interested parties be precluded from waiving or asserting their rights under those terms. The court hearing an application for approval of a transfer of payment rights under such a settlement shall have authority to rule on the merits of the application and any objections to such application.
(f) Compliance with the requirements set forth in Section 10 of this
Act and fulfillment of the conditions set forth in Section 15 of this Act 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 those requirements or failure to fulfill those conditions.
(g) Following issuance of a court order approving a transfer of structured settlement payment rights under this Act, the structured settlement obligor and annuity issuer may rely on the court order in redirecting future structured settlement payments to the transferee or an assignee in accordance with the order.
(h) The changes made to this Section by this amendatory Act of the 99th General Assembly are declarative of existing law.
(Source: P.A. 99-286, eff. 8-5-15.)
(215 ILCS 153/35)
Sec. 35. Applicability. This Act shall apply to any transfer of
structured
settlement
payment rights under a transfer agreement entered into on or after the 30th day
after the
effective date of this Act, including any transfer in which the structured settlement obligor and annuity issuer have affirmatively waived, or have not objected to the transfer based upon, the terms of the settlement prohibiting sale, assignment, or encumbrance of the payee's structured settlement payment rights.  The changes made to this Section by this amendatory Act of the 99th General Assembly are declarative of existing law.
(Source: P.A. 99-286, eff. 8-5-15.)