TO
HOUSE BILL NO. 392
AMEND House Bill No. 392 by inserting between lines 169 and 170 thereof a new section to read as follows:
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§6605. Disclosures required to be given prior to entering into a structured settlement agreement; representation required or waived.(a) No settlement of a personal injury claim by use of a structured settlement shall be valid unless at least 10 days prior to the effective date of the proposed settlement a disclosure statement in type at least 12 point in size has been provided to the payee. Such disclosure statement shall set forth the following:
(1) the amounts and due dates of all payments due under the structured settlement;
(2) the aggregate amount of all payments due under the structured settlement;
(3) the discounted present value of all payments due under the structured settlement and the discount rate used in determining the discounted present value;
(4) the quotient, expressed as a percentage, obtained by dividing the net present value of all payments due under the structured settlement by the aggregate amount of all payments due under the structured settlement;
(5) the gross amount payable to the settlement obligor and the annuity issuer in return for their agreement to make the periodic payments due under the structured settlement;
(6) the most recent published credit rating of the annuity issuer and the structured settlement obligor as published by at least either of the following credit rating agencies – Standard & Poors; Moodys Investors Services;
(7) a good faith estimate of all commissions, fees, rebates, service charges, application fees, processing fees, closing costs, filing fees, administrative charges, and other costs, expenses, and charges paid to, by or on behalf of the settlement obligor, the annuity issuer, any broker or attorney in connection with the structured settlement.
(b) No settlement of a personal injury claim by use of a structured settlement shall be valid unless the payee has received independent professional advice regarding the legal, tax and financial implications of the structured settlement or has waived such advice in writing.".
FURTHER AMEND House Bill No. 392 by adding at the end of line 178 thereof the following:
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§6605 of this Chapter shall apply to structured settlements entered into on or after the 31st day after the enactment of this Chapter.".This amendment adds a new section which requires that disclosures be provided by the insurance company when a structured settlement is first set up. Unfortunately, many people who settle by way of a structured settlement simply do not understand what they are getting or what it is worth. This amendment also provides that a consumer be represented by an independent advisor when entering into a structured settlement or that such representation be waived in writing.