SRC-AXB S.B. 1740 76(R)   BILL ANALYSIS


Senate Research Center   S.B. 1740
By: Harris
Jurisprudence
3/26/1999
As Filed


DIGEST 

Currently, an injury victim can become dependent on assistance programs
once the victim uses up a lump-sum compensatory payment for serious
personal injuries.  Because structured settlements are intended to protect
the injury victims, a structured settlement recipient is prohibited by
contract by from transferring the payments, and ownership of the annuity
contract is vested in insurance companies.  S.B. 1740  creates procedures
for the transfer of structured settlement payment rights. 

PURPOSE

As proposed, S.B. 1740 creates the Structured Settlement Protection Act,
and creates procedures for the transfer of structured settlement payment
rights. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 3, Texas Insurance Code, by adding Article 3.97,
as follows: 

Art.  3.97.  STRUCTURED SETTLEMENT PROTECTION ACT

Sec.  1.  DEFINITIONS.  Defines "annuity issuer," "applicable law,"
"dependents," "discounted present value," "favorable tax determination,"
"independent professional advice," "interested parties," "payee," "periodic
payments," "qualified assignment agreement," "responsible administrative
authority," "settled claim," "structured settlement," "structured
settlement agreement," "structured settlement obligor," "structured
settlement payment rights," "terms of the structured settlement,"
"transfer," "transferee," and "transfer agreement." 

Sec.  2.  CONDITIONS TO TRANSFERS OF STRUCTURED SETTLEMENT PAYMENT RIGHTS.
Prohibits the effectiveness of structured settlement-related concerns prior
to authorization of the transfer by a certain entity, based on certain
findings. 

Sec.  3.  APPROVAL OF TRANSFERS.  Requires an application for authorization
of a structured settlement payment rights transfer to be made by the
transferee, and sets forth transferral procedures.  Requires the transferee
to file certain documents and notifications with  certain entities and
serve on certain governmental authorities.  Requires the interested parties
to have certain rights regarding proceedings for a transfer of structured
settlement payment rights. 

Sec.  4.  NO WAIVER; NO PENALTIES.  Prohibits the waiver of this article's
provisions. Provides that no payee who proposes a transfer of structured
settlement payment rights shall incur any penalty, forfeit of an
application fee or other payment, or liability. 

Sec.  5.  CONSTRUCTION.  Provides that nothing in this article shall be
construed to authorize any transfer of structured settlement payment rights
in contravention of applicable law or to give effect to any transfer of
structured settlement payment rights invalid under the  law. 

SECTION 2.  Effective date:  September 1, 1999.
  Makes application of this Act prospective.

SECTION 3.  Emergency clause.