Michigan Laws 691.1305 – Transfer of structured settlement payment rights; effects
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Terms Used In Michigan Laws 691.1305
- 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 to fund periodic payments under a structured settlement. See Michigan Laws 691.1302
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Payee: means an individual who receives tax free payments under a structured settlement and who proposes to make a transfer of payment rights under the structured settlement. See Michigan Laws 691.1302
- person: may extend and be applied to bodies politic and corporate, as well as to individuals. See Michigan Laws 8.3l
- 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.
- Structured settlement: means an arrangement for periodic payment of damages for personal injuries or sickness established by settlement or judgment to resolve a tort claim. See Michigan Laws 691.1302
- Structured settlement obligor: means , with respect to a structured settlement, a person that has a continuing obligation to make periodic payments to a payee under the structured settlement agreement or a qualified assignment agreement. See Michigan Laws 691.1302
- Structured settlement payment rights: means rights to receive periodic payments under a structured settlement, whether from the structured settlement obligor or the annuity issuer, if 1 or more of the following conditions exist:
(i) 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. See Michigan Laws 691.1302Terms of the structured settlement: means , with respect to a structured settlement, the terms of the structured settlement agreement, an annuity contract, a qualified assignment agreement, or an order or other approval of a court that authorized or approved the structured settlement. See Michigan Laws 691.1302 Transfer: means a sale, assignment, pledge, hypothecation, or other alienation or encumbrance of structured settlement payment rights a payee makes for consideration; except that "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, unless action has been taken to redirect the structured settlement payments to the insured depository institution or to an agent or successor in interest of the depository institution, or action has been taken to otherwise enforce the blanket security interest against the structured settlement payment rights. See Michigan Laws 691.1302 Transferee: means a person acquiring or proposing to acquire structured settlement payment rights through a transfer. See Michigan Laws 691.1302
A transfer of structured settlement payment rights under this act has all of the following effects:
(a) The structured settlement obligor and the annuity issuer are discharged and released from all liability for the transferred payments as to any person except the transferee.
(b) The transferee is liable to the structured settlement obligor and the annuity issuer for both of the following:
(i) If the transfer contravenes the terms of the structured settlement, the taxes incurred by the structured settlement obligor and the annuity issuer as a consequence of the transfer.
(ii) Other liabilities or costs, including reasonable costs and attorney fees, arising from the structured settlement obligor’s and the annuity issuer’s compliance with the order of the court or from the transferee’s failure to comply with this act.
(c) An annuity issuer or a structured settlement obligor is not required to divide a periodic payment between the payee and a transferee or assignee or between 2 or more transferees or assignees.
(d) A payee may make a further transfer of structured settlement payment rights only after complying with all of the requirements of this act.