Substitute House Bill No. 5548
          Substitute House Bill No. 5548

              PUBLIC ACT NO. 98-238


AN ACT CONCERNING STRUCTURED SETTLEMENTS.


    Be  it  enacted  by  the  Senate  and House of
Representatives in General Assembly convened:
    Section 1. (NEW)  (a)  For  purposes  of  this
section:
    (1)  "Annuity  issuer"  means  an insurer that
has issued any insurance  contract  used  to  fund
periodic payments under a structured settlement;
    (2)     "Expenses"    means    all    broker's
commissions,  service  charges,   application   or
processing   fees,   closing   costs,   filing  or
administrative charges, legal  fees,  notary  fees
and  other  commissions,  fees,  costs and charges
payable  by  the  payee  in  connection  with  the
proposed  transfer  or  deductible  from the gross
consideration that would be paid to the  payee  in
connection with the transfer;
    (3)  "Interested  parties" means, with respect
to  any  structured  settlement,  the  payee,  any
beneficiary   designated   to   receive   payments
following the payee's death or, if the  designated
beneficiary    is    a   minor,   the   designated
beneficiary's  parent  or  guardian,  the  annuity
issuer and the structured settlement obligor;
    (4)   "Payee"   means  an  individual  who  is
receiving payments under a  structured  settlement
and  proposes to make a transfer of payment rights
thereunder;
    (5)    "Structured    settlement"   means   an
arrangement  for  periodic  payment   of   damages
established   by   settlement   or   judgment   in
resolution  of  a  tort  claim  or  for   periodic
payments  in settlement of a workers' compensation
claim;
    (6)  "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   under  an  agreement
providing for a qualified  assignment  within  the
meaning  of  Section  130  of the Internal Revenue
Code of  1986,  or  any  subsequent  corresponding
internal  revenue  code  of  the United States, as
from time to time amended;
    (7)  "Structured  settlement  payment  rights"
means  rights  to   receive   periodic   payments,
including  lump  sum  payments, under a structured
settlement, whether from the settlement obligor or
the annuity issuer;
    (8)  "Transfer"  means  any  sale, assignment,
pledge, hypothecation or other form of  alienation
or encumbrance made for consideration;
    (9)  "Transfer  agreement" means the agreement
providing for transfer  of  structured  settlement
payment rights from a payee to a transferee; and
    (10)  "Transferee"  means any person receiving
structured  settlement  payment  rights  resulting
from a transfer.
    (b)   No  transfer  of  structured  settlement
payment rights,  either  directly  or  indirectly,
shall  be effective by any payee domiciled in this
state or by any payee entitled to receive payments
under   a   structured  settlement  funded  by  an
insurance contract issued by an insurer  domiciled
in   this   state   or  owned  by  an  insurer  or
corporation  domiciled  in  this  state   and   no
structured  settlement  obligor  or annuity issuer
shall be required to make any payment directly  or
indirectly  to any transferee of any such transfer
unless (1) not less than ten  days  prior  to  the
date  on which the payee entered into the transfer
agreement, the transferee provided to the payee  a
written disclosure statement 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  gross  amount  of
all expenses; (D) the amount payable to the payee,
net of all expenses, in exchange for the payments;
(E) the discounted present value of all structured
settlement payments  to  be  transferred  and  the
discount  rate used in determining such discounted
present value; and (F) a statement that the  payee
may be subject to adverse federal and state income
tax consequences  as  a  result  of  the  proposed
transfer;  and (2) such transfer has been approved
by a court pursuant  to  subsection  (c)  of  this
section.
    (c)  (1)  Prior  to  any  transfer,  the payee
entitled to receive payments under such structured
settlement  shall  commence a declaratory judgment
action  under  section  52-29   of   the   general
statutes,  for  a  determination as to whether the
transfer of  such  structured  settlement  payment
rights  is  in the best interests of the payee and
is fair and reasonable to all  interested  parties
under  all of the circumstances then existing. The
annuity  issuer  and  the  structured   settlement
obligor  shall  be made parties to such action. If
the court determines,  after  hearing,  that  such
transfer  should be allowed, it shall approve such
transfer upon such  terms  and  conditions  as  it
deems appropriate.
    (2)  The  court  in  which the original action
was or could have been filed or  the  court  which
has jurisdiction where the applicant resides shall
have jurisdiction over any such action.
    (3)  The  payee  shall  cause  notice  of  the
action to be served on all interested parties by a
proper  officer or other person lawfully empowered
to make service. The notice of  the  action  shall
include  (A)  a copy of the payee's application to
the court for approval of the transfer (B) a  copy
of   the   disclosure   statement  required  under
subsection (b) of this section and (C)  notice  of
the hearing.
    (4)  The  payee  may seek an order setting the
deadline for the filing of written objections. The
payee  shall give notice to all interested parties
of the deadline for filing objections whether such
deadline has been established by court order or by
operation of the general statutes or  court  rule.
Notice  shall  be mailed to all interested parties
at least ten days before such deadline.
    (5)  The  court  shall  hold  a hearing on the
application. The payee shall give  notice  of  the
hearing to all interested parties.
    (d)  Nothing  contained  in this section shall
imply that any transfer under a transfer agreement
dated  prior  to the effective date of this act is
binding upon any  interested  party  or  that  any
annuity issuer or structured settlement obligor is
under any obligation to make transferred  payments
to the transferee of any such prior transfer.
    (e)  The provisions of this section may not be
waived.
    Sec.  2. This act shall take effect October 1,
1998,  and  shall  be   applicable   to   transfer
agreements executed on or after said date.

Approved June 8, 1998