No direct or indirect transfer of structured settlement payment rights shall be effective and no structured settlement obligor or annuity issuer shall 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 a responsible administrative authority, and complies with all of the following:

(1) The transfer complies with the requirements of this part and will not contravene other applicable law;

Terms Used In Tennessee Code 47-18-2603

  • 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.
  • Applicable law: means state or federal statutes of the United States. See Tennessee Code 47-18-2602
  • Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
  • Discounted present value: means the present value of future payments, as determined by discounting such payments to the present using the most recently published applicable federal rate for determining the present value of an annuity, as issued by the internal revenue service, and the present value of the payments to be transferred by the payee using the actual discount rate applied to the transfer, stated as an annual percentage rate. See Tennessee Code 47-18-2602
  • Independent professional advice: means advice of an attorney, certified public accountant, actuary or other licensed professional adviser. See Tennessee Code 47-18-2602
  • 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.
  • Payee: means an individual who is receiving tax-free damage payments under a structured settlement and proposes to make a transfer of payment rights thereunder. See Tennessee Code 47-18-2602
  • Responsible administrative authority: means , with respect to a structured settlement, any government authority vested by law with exclusive jurisdiction over the settled claim resolved by such structured settlement. See Tennessee Code 47-18-2602
  • 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 established by settlement or judgment in resolution of a tort claim. See Tennessee Code 47-18-2602
  • 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 Tennessee Code 47-18-2602
  • 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 where:
    (A) The payee is domiciled in this state. See Tennessee Code 47-18-2602
  • Transfer: means any sale, assignment, pledge, hypothecation, commutation, advance or other form of alienation or encumbrance made by a payee for consideration. See Tennessee Code 47-18-2602
  • Transfer agreement: means the agreement providing for transfer of structured settlement payment rights from a payee to a transferee. See Tennessee Code 47-18-2602
  • written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
(2) Not less than ten (10) days prior to the date on which the payee executes the transfer agreement, the transferee has provided to the payee a disclosure statement in bold type, no smaller than fourteen (14) points, setting forth:

(A) The amounts and due dates of the structured settlement payments to be transferred;
(B) The aggregate amount of such payments;
(C) The discounted present value of such payments, together with the discount rate used in determining such discounted present value;
(D) The gross amount payable to the payee in exchange for such payments;
(E) An itemized listing of all brokers’ commissions, service charges, application fees, processing fees, closing costs, filing fees, administrative fees, notary fees and other commissions, fees, costs, expenses and charges, and a good faith estimate of all legal fees and court costs payable by the payee or deductible from the gross amount otherwise payable to the payee;
(F) The net amount payable to the payee after deduction of all commissions, fees, costs, expenses and charges described in subdivision (2)(E); and
(G) The amount of any penalty and the aggregate amount of any liquidated damages (inclusive of penalties) payable by the payee in the event of any breach of the transfer agreement by the payee;
(3) The payee has established that the transfer is fair and reasonable and in the best interest of the payee;
(4) The payee has been advised by the transferee, in writing, to seek independent professional advice regarding the financial, legal and tax implications of the transfer; and
(5) The transferee has given written notice of the transferee’s name, address and taxpayer identification number to the annuity issuer and the structured settlement obligor and has filed a copy of such notice with the court or responsible administrative authority.
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