Arizona Laws 12-2902. Payment rights; transfer conditions
A. Direct or indirect transfer of structured settlement payment rights shall not be effective and a structured settlement obligor or annuity issuer shall not 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 or responsible administrative authority.
Terms Used In Arizona Laws 12-2902
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Annuity issuer: means an insurer that has issued a contract that is used to fund periodic payments under a structured settlement. See Arizona Laws 12-2901
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Dependents: includes a payee's spouse and minor children and all other family members and other persons for whom the payee is legally obligated to provide support, including alimony. See Arizona Laws 12-2901
- Discounted present value: means the 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. See Arizona Laws 12-2901
- 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 the consideration. See Arizona Laws 12-2901
- including: means not limited to and is not a term of exclusion. See Arizona Laws 1-215
- Independent professional advice: means the advice of an attorney, certified public accountant, actuary or other licensed professional adviser. See Arizona Laws 12-2901
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Net advance amount: means the gross advance amount less the aggregate amount of the actual and estimated transfer expenses required to be disclosed under this chapter. See Arizona Laws 12-2901
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Payee: means an individual who receives tax-free damage payments under a structured settlement and who proposes to make a transfer of payment rights under the structured settlement. See Arizona Laws 12-2901
- Responsible administrative authority: means , with respect to a structured settlement, any government authority that is vested by law with exclusive jurisdiction over the settled claim that is resolved by the structured settlement. See Arizona Laws 12-2901
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
- Statute: A law passed by a legislature.
- Structured settlement: means an arrangement for periodic payment of damages for personal injuries or sickness that is established by settlement or judgment in resolution of a tort claim or for periodic payments in settlement of a workers' compensation claim. See Arizona Laws 12-2901
- Structured settlement obligor: means , with respect to any structured settlement, the party that has the continuing periodic payment obligation to the payee under a structured settlement agreement or a qualified assignment agreement. See Arizona Laws 12-2901
- Structured settlement payment rights: means the right to receive periodic payments under a structured settlement, whether from the settlement obligor or the annuity issuer, if any of the following apply:
(a) The payee, the structured settlement obligor, the annuity issuer or any other interested party is domiciled in this state. See Arizona Laws 12-2901
- 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 responsible administrative authority or other government authority that authorized or approved the structured settlement. See Arizona Laws 12-2901
- Transfer: means any sale, assignment, pledge, hypothecation or other form of alienation or encumbrance of structured settlement payment rights. See Arizona Laws 12-2901
- Transfer agreement: means the agreement that provides for transfer of structured settlement payment rights from a payee to a transferee. See Arizona Laws 12-2901
- Transfer expenses: means all expenses of a transfer required under the transfer agreement to be paid by the payee or deducted from the gross advance amount, including court filing fees, attorney fees, escrow fees, lien recordation fees, judgment and lien search fees, finders' fees, commissions and other payments to a broker or other intermediary. See Arizona Laws 12-2901
- Transferee: means a party acquiring or proposing to acquire structured settlement payment rights through a transfer. See Arizona Laws 12-2901
- Writing: includes printing. See Arizona Laws 1-215
B. Before issuing a final order pursuant to subsection A, the court or responsible administrative authority shall expressly find that:
1. The transfer complies with the requirements of this chapter and will not contravene any other applicable law.
2. Not less than three days before the date on which the payee signed the transfer agreement, the transferee provided to the payee a 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 the 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 the discounted present value.
(d) The gross advance amount that is payable to the payee in exchange for the payments.
(e) An itemized listing of all applicable transfer expenses, other than attorney 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 attorney fees and related disbursements.
(f) The net advance amount that is payable to the payee after deduction of all commissions, fees, costs, expenses and charges listed in subdivision (e) of this paragraph.
(g) 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.
(h) The amount of any penalty and the aggregate amount of any liquidated damages inclusive of penalties that are payable by the payee in the event of any breach of the transfer agreement by the payee.
3. The transfer is in the best interest of the payee, taking into account the welfare and support of the payee’s dependents.
4. The payee has been advised in writing by the transferee to seek independent professional advice regarding the transfer and has either received the advice or knowingly waived the advice in writing.
5. If the transfer would contravene any applicable statute or the order of any court or other government authority.
C. Following a transfer of structured settlement payment rights under this chapter:
1. 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.
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 such parties as a consequence of the transfer.
(b) For any other liabilities or costs, including reasonable costs and attorney fees, arising from compliance by such parties with the order of the court or responsible administrative authority or arising as a consequence of the transferee’s failure to comply with this act.