Illinois General Assembly - Full Text of SB1268
Illinois General Assembly

Previous General Assemblies

Full Text of SB1268  99th General Assembly


Sen. William R. Haine

Filed: 3/20/2015





09900SB1268sam001LRB099 07155 MLM 32922 a


2    AMENDMENT NO. ______. Amend Senate Bill 1268 as follows:
3on page 1, by replacing line 5 with: "amended by changing
4Sections 5, 15, 20, 25, 30, and 35 as follows: "; and
5on page 1, immediately below line 5, by inserting the
7    "(215 ILCS 153/5)
8    Sec. 5. Definitions. For purposes of this Act:
9    "Annuity issuer" means an insurer that has issued a
10contract to fund periodic payments under a structured
12    "Dependents" include a payee's spouse and minor children
13and all other persons for whom the payee is legally obligated
14to provide support, including maintenance.
15    "Discounted present value" means the present value of



09900SB1268sam001- 2 -LRB099 07155 MLM 32922 a

1future payments determined by discounting such payments to the
2present using the most recently published Applicable Federal
3Rate for determining the present value of an annuity, as issued
4by the United States Internal Revenue Service.
5    "Gross advance amount" means the sum payable to the payee
6or for the payee's account as consideration for a transfer of
7structured settlement payment rights before any reductions for
8transfer expenses or other deductions to be made from such
10    "Independent professional advice" means advice of an
11attorney, certified public accountant, actuary, or other
12licensed professional adviser.
13    "Interested parties" means, with respect to any structured
14settlement, the payee, any beneficiary irrevocably designated
15under the annuity contract to receive payments following the
16payee's death, the annuity issuer, the structured settlement
17obligor, and any other party to the structured settlement that
18has continuing rights or obligations to receive or make
19payments under such structured settlement.
20    "Net advance amount" means the gross advance amount less
21the aggregate amount of the actual and estimated transfer
22expenses required to be disclosed under item (5) of Section 10
23of this Act.
24    "Payee" means an individual who is receiving tax free
25payments under a structured settlement and proposes to make a
26transfer of payment rights thereunder.



09900SB1268sam001- 3 -LRB099 07155 MLM 32922 a

1    "Periodic payments" includes both recurring payments and
2scheduled future lump sum payments.
3    "Qualified assignment agreement" means an agreement
4providing for a qualified assignment within the meaning of
5Section 130 of the United States Internal Revenue Code, United
6States Code Title 26, as amended from time to time.
7    "Responsible administrative authority" means, with respect
8to a structured settlement, any government authority vested by
9law with exclusive jurisdiction over the settled claim resolved
10by such structured settlement.
11    "Settled claim" means the original tort claim or workers'
12compensation claim resolved by a structured settlement.
13    "Structured settlement" means an arrangement for periodic
14payment of damages for personal injuries or sickness
15established by settlement or judgment in resolution of a tort
16claim or for periodic payments in settlement of a workers'
17compensation claim.
18    "Structured settlement agreement" means the agreement,
19judgment, stipulation, or release embodying the terms of a
20structured settlement.
21    "Structured settlement obligor" means, with respect to any
22structured settlement, the party that has the continuing
23obligation to make periodic payments to the payee under a
24structured settlement agreement or a qualified assignment
26    "Structured settlement payment rights" means rights to



09900SB1268sam001- 4 -LRB099 07155 MLM 32922 a

1receive periodic payments under a structured settlement,
2whether from the structured settlement obligor or the annuity
3issuer, when:
4        (1) the payee is domiciled in, or the domicile or
5    principal place of business of the structured settlement
6    obligor or the annuity issuer is located in, this State;
7        (2) the structured settlement agreement was approved
8    by a court or responsible administrative authority in this
9    State; or
10        (3) the structured settlement agreement is expressly
11    governed by the laws of this State.
12    "Terms of the structured settlement" include, with respect
13to any structured settlement, the terms of the structured
14settlement agreement, the annuity contract, any qualified
15assignment agreement, and any order or other approval of any
16court or responsible administrative authority or other
17government authority that authorized or approved such
18structured settlement.
19    "Transfer" means any sale, assignment, pledge,
20hypothecation, or other alienation or encumbrance of
21structured settlement payment rights made by a payee for
22consideration; provided that the term "transfer" does not
23include the creation or perfection of a security interest in
24structured settlement payment rights under a blanket security
25agreement entered into with an insured depository institution
26in the absence of any action to redirect the structured



09900SB1268sam001- 5 -LRB099 07155 MLM 32922 a

1settlement payments to such insured depository institution or
2an agent or successor in interest thereof or otherwise to
3enforce such blanket security interest against the structured
4settlement payment rights.
5    "Transfer agreement" means the agreement providing for a
6transfer of structured settlement payment rights.
7    "Transfer expenses" means all expenses of a transfer that
8are required under the transfer agreement to be paid by the
9payee or deducted from the gross advance amount, including,
10without limitation, court filing fees, attorneys fees, escrow
11fees, lien recordation fees, judgment and lien search fees,
12finders' fees, commissions, and other payments to a broker or
13other intermediary; "transfer expenses" do not include
14preexisting obligations of the payee payable for the payee's
15account from the proceeds of a transfer.
16    "Transferee" means a party acquiring or proposing to
17acquire structured settlement payment rights through a
19(Source: P.A. 93-502, eff. 1-1-04.)"; and
20on page 1, by replacing lines 13 through 23 with the following:
21"been approved in advance in a final court order or order of a
22responsible administrative authority based on express findings
23by such court or responsible administrative authority that:
24        (1) the transfer is in the best interest of the payee,



09900SB1268sam001- 6 -LRB099 07155 MLM 32922 a

1    taking into account the welfare and support of the payee's
2    dependents;
3        (2) the payee has been advised in writing by the
4    transferee to seek independent professional advice
5    regarding the transfer and has either received such advice
6    or knowingly waived in writing the opportunity to seek and
7    receive such advice in writing; and"; and
8by replacing line 7 on page 2 through line 11 on page 3 with the
10"payment rights. Following a transfer of structured settlement
11payment rights approved under this Act:
12        (1) the structured settlement obligor and the annuity
13    issuer shall, as to all parties except the transferee or an
14    assignee designated by the transferee, be discharged and
15    released from any and all liability for the transferred
16    payments, and the discharge and release shall not be
17    affected by the failure of any other party to the transfer
18    to comply with this Act or with the order of the court
19    approving the transfer;
20        (2) the transferee shall be liable to the structured
21    settlement obligor and the annuity issuer:
22            (A) if the transfer contravenes the terms of the
23        structured settlement, for any taxes incurred by the
24        parties as a consequence of the transfer; and



09900SB1268sam001- 7 -LRB099 07155 MLM 32922 a

1            (B) for any other liabilities or costs, including
2        reasonable costs and attorneys' fees, arising from
3        compliance by the structured settlement obligor or
4        annuity issuer parties with the order of the court or
5        responsible administrative authority or from arising
6        as a consequence of the transferee's failure of any
7        party to the transfer to comply with this Act;"; and
8by replacing line 20 on page 3 through line 26 on page 5 with
9the following:
10    "(215 ILCS 153/25)
11    Sec. 25. Procedure for approval of transfers.
12    (a) No annuity issuer or structured settlement obligor may
13make payments on a structured settlement to anyone other than
14the payee or beneficiary of the payee without prior approval of
15the circuit court or responsible administrative authority. No
16payee or beneficiary of a payee of a structured settlement may
17assign in any manner the structured settlement payment rights
18without the prior approval of the circuit court or responsible
19administrative authority.
20    (b) An application under this Act for approval of a
21transfer of structured settlement payment rights shall be made
22by the transferee and shall be brought in the circuit court of
23the county in which the payee is domiciled, except that, if the
24payee is not domiciled in this State, the application may be



09900SB1268sam001- 8 -LRB099 07155 MLM 32922 a

1filed in the court in this State that approved the structured
2settlement agreement or in the circuit court of the county in
3this State in which the structured settlement obligor or
4annuity issuer has its principal place of business an action
5was or could have been maintained or before any responsible
6administrative authority that approved the structured
7settlement agreement.
8    (c) A hearing shall be held on an application for approval
9of a transfer of structured settlement payment rights. The
10payee shall appear in person at the hearing unless the court
11determines that good cause exists to excuse the payee from
12appearing. Not less than 20 days prior to the scheduled hearing
13on an application, the transferee shall file with the court and
14serve on all interested parties a notice of the proposed
15transfer and the application, including the information and
16documentation required under subsection (d) of this Section.
17    (d) In addition to complying with the other requirements of
18this Act, the application should include:
19        (1) the payee's name, age, and county of domicile and
20    the number and ages of the payee's dependents;
21        (2) a copy of the transfer agreement and disclosure
22    statement;
23        (3) a description of the reasons why the payee seeks to
24    complete the proposed transfer;
25        (4) a summary of:
26            (i) any prior transfers by the payee to the



09900SB1268sam001- 9 -LRB099 07155 MLM 32922 a

1        transferee or an affiliate, or through the transferee
2        or an affiliate to an assignee, within the 4 years
3        preceding the date of the transfer agreement and any
4        proposed transfers by the payee to the transferee or an
5        affiliate, or through the transferee or an affiliate to
6        an assignee, applications for approval of which were
7        denied within the 2 years preceding the date of the
8        transfer agreement;
9            (ii) any prior transfers by the payee to any person
10        or entity other than the transferee or an affiliate or
11        an assignee of a transferee or affiliate within the 3
12        years preceding the date of the transfer agreement and
13        any prior proposed transfers by the payee to any person
14        or entity other than the transferee or an affiliate or
15        an assignee of a transferee or affiliate, applications
16        for approval which were denied within the one year
17        preceding the date of the current transfer agreement,
18        to the extent that the transfers or proposed transfers
19        have been disclosed to the transferee by the payee in
20        writing or otherwise are actually known by the
21        transferee;
22        (5) notification that any interested party is entitled
23    to support, oppose, or otherwise respond to the
24    transferee's application, either in person or by counsel,
25    by submitting written comments to the court or by
26    participating in the hearing; and



09900SB1268sam001- 10 -LRB099 07155 MLM 32922 a

1        (6) notification of the time and place of the hearing
2    and notification of the manner in which and the time by
3    which written responses to the application must be filed,
4    which shall be not less than 5 days prior to the hearing,
5    in order to be considered by the court.
6(Source: P.A. 93-502, eff. 1-1-04.)"; and
7by replacing line 1 on page 6 through line 6 of page 8 with the
9    "(215 ILCS 153/30)
10    Sec. 30. General provisions; construction.
11    (a) The provisions of this Act may not be waived by any
13    (b) Any transfer agreement entered into on or after the
14effective date of this Act by a payee who resides in this State
15shall provide that disputes under the transfer agreement,
16including any claim that the payee has breached the agreement,
17shall be determined in and under the laws of this State. No
18such transfer agreement shall authorize the transferee or any
19other party to confess judgment or consent to entry of judgment
20against the payee.
21    (c) No transfer of structured settlement payment rights
22shall extend to any payments that are life-contingent unless,
23prior to the date on which the payee signs the transfer
24agreement, the transferee has established and has agreed to



09900SB1268sam001- 11 -LRB099 07155 MLM 32922 a

1maintain procedures reasonably satisfactory to the annuity
2issuer and the structured settlement obligor for (1)
3periodically confirming the payee's survival, and (2) giving
4the annuity issuer and the structured settlement obligor prompt
5written notice in the event of the payee's death.
6    (d) No payee who proposes to make a transfer of structured
7settlement payment rights shall incur any penalty, forfeit any
8application fee or other payment, or otherwise incur any
9liability to the proposed transferee or any assignee based on
10any failure of the transfer to satisfy the conditions of this
12    (e) Nothing contained in this Act shall be construed to
13authorize any transfer of structured settlement payment rights
14in contravention of any law or to imply that any transfer under
15a transfer agreement entered into prior to the effective date
16of this Act is valid or invalid. A court shall not be precluded
17from hearing an application for approval of a transfer of
18payment rights under a structured settlement where the terms of
19the structured settlement prohibit sale, assignment, or
20encumbrance of such payment rights, nor shall the parties to
21the settlement be precluded from waiving or asserting their
22rights under those terms. The court hearing an application for
23approval of a transfer of payment rights under a settlement
24shall have authority to rule on the merits of the application
25and any objections to the application.
26    (f) Compliance with the requirements set forth in Section



09900SB1268sam001- 12 -LRB099 07155 MLM 32922 a

110 of this Act and fulfillment of the conditions set forth in
2Section 15 of this Act shall be solely the responsibility of
3the transferee in any transfer of structured settlement payment
4rights, and neither the structured settlement obligor nor the
5annuity issuer shall bear any responsibility for, or any
6liability arising from, non-compliance with those requirements
7or failure to fulfill those conditions.
8    (g) Following issuance of a court order approving a
9transfer of structured settlement payment rights under this
10Act, the structured settlement obligor and annuity issuer may
11rely on the court order in redirecting future structured
12settlement payments to the transferee or an assignee in
13accordance with the order.
14    (h) The changes made to this Section by this amendatory Act
15of the 99th General Assembly are declarative of existing law.
16(Source: P.A. 93-502, eff. 1-1-04.)"; and
17on page 8, by replacing lines 11 through 17 with the following:
18"the effective date of this Act, including any transfer in
19which the structured settlement obligor and annuity issuer have
20affirmatively waived, or have not objected to the transfer
21based upon, the terms of the settlement prohibiting sale,
22assignment, or encumbrance of the payee's structured
23settlement payment rights. The changes made in this".