Federal Legislation To Require Sellers Of Structured Settlements To Seek Court Approval.
On January 22,2002, President George W. Bush signed into law a bill that protects individuals who must sell their structured settlement payments to meet unplanned financial needs.
This bill makes it mandatory for individuals to seek court approval when they sell their structured settlement payments. The bill works in conjunction with state laws directing how these transactions will be completed.
With over thirty states having already passed such laws, individuals throughout the country can now safely access their structured settlement payments when unforeseen financial needs arise.
The bill benefit and protect these individuals, but it also makes clear that annuity providers will suffer no tax consequences as a result of these transactions.
Insurance companies have long contended that when an individual sells his or her structured settlement payments, the annuity obligors could suffer tax consequences. That concern was the source of very contentious litigation between insurance companies on one side and settlement purchasers and annuitants on the other.
This bill is unambiguous, stating that annuity owners and providers do not now owe nor have they ever owed taxes as a result of these transactions. The insurance industry, the legal community and members of congress, have work together to protect individuals who need to access their structured annuity payments while acknowledging their right to do so. It is now incumbent upon those states that have not already done so to enact legislation that conforms to this federal law.
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We believe the choice as to whether or not to sell a structured settlement payment belongs to the injured party, or their representative - not to inflexible insurance companies.
The settlement purchasing industry was created in answer to the needs of recipients whose situations had changed. Our industry has been providing choices for people who need to gain access to their money now.
The Public will now have the protection of the law when entering into any and all agreements to sell structured settlement payments.
EXCERPT FROM H.R.2884 DEALING WITH TREATMENT OF CERTAIN STRUCTURED SETTLEMENT PAYMENTS. Click here
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