COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 482
(By Senator Bowman)
____________
[Originating in the Committee on the Judiciary;
reported March 3, 1998.]
____________
A BILL to amend chapter forty-six-a of the code of West Virginia,
one thousand nine hundred thirty-one, as amended, by adding
thereto a new article, designated article four-a, relating
to regulating the business of purchasing certain future
benefit payments; requiring banking commissioner to propose
legislation; requiring court approval until further
enactments; establishing criminal penalties for violations;
providing for an effective date; and providing for liberal
construction of article.
Be it enacted by the Legislature of West Virginia:
That chapter forty-six-a of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, be amended by
adding thereto a new article, designated article four-a, to read
as follows:
ARTICLE 4A. REGULATION OF BUSINESS OF PURCHASING RIGHT TO FUTURE
PAYMENTS.
§46A-4A-1. License to engage in business of purchasing right to receive certain future payments; exceptions.
(a) Except as otherwise provided in section two of this
article, no person may engage in the business of purchasing the
right to receive the future payments from an annuity, a
structured settlement, lottery proceeds, sweepstakes winnings or
other similar payment arrangement without obtaining a license
issued by the banking commissioner.
(b) The commissioner shall propose legislation the
commissioner determines reasonable and necessary to regulate the
business of purchasing the right to receive the future payments
from an annuity, a structural settlement, lottery proceeds,
sweepstakes winnings or other similar payment arrangement to the
joint committee on government and finance no later than the first
day of December, one thousand nine hundred ninety-eight. The
proposed legislation shall include, at a minimum, provisions:
(1) Protecting citizens from unreasonable business tactics
and pressures;
(2) Establishing procedures and criteria for courts to
determine whether the proposed transfer of future benefit
payments sufficiently informs the parties of the costs and
obligations of the contract, and protects the legitimate interest
of all affected persons;
(3) Establishing procedures for issuing, renewing, revoking
and rescinding licenses; and
(4) Establishing fees for issuing and renewing licenses.
(c) The commissioner may not issue a license to permit a person to engage in the business of purchasing the right to
receive the future payments from an annuity, court settlement,
lottery payoff, sweepstakes payoff or other similar payment
arrangement until such licensing authority is authorized by
subsequent legislative enactment.
§46A-4A-2. Requirement for court approval.
(a) Until such time as the recommendations of the
commissioner required by this article are considered and any
subsequent provisions are enacted by the Legislature, no transfer
of future benefit payment rights shall be effective or
enforceable in this state unless approved by a court of competent
jurisdiction. Before granting approval of any transfer of future
benefit payments the court shall determine whether:
(1) The payee has established that the transfer is necessary
to enable the payee, the payee's dependants, or both, to avoid
imminent financial hardship and the transfer is not expected to
subject the payee or the payee's dependants to undue financial
hardship in the future;
(2) Full and accurate written disclosures have been provided
to the payee as to the terms and costs associated with the
transfer of the future benefit payments; and
(3) The financial and legal effects and consequences of the
transfer have been adequately explained to the payee and to the
payee's dependants or their legal representative.
(b) As used in this section:
(1) The term "payee" means an individual who is receiving or legally entitled to receive payments from an annuity, a
structured settlement, lottery proceeds, sweepstakes winnings or
other similar payment arrangement who desires to transfer his or
her future payments rights;
(2) The term "dependant" means a payee's spouse, minor
children and all other family members and other persons for whom
the payee is legally obligated to provide support, including
alimony.
§46A-4A-3. Effective date.
The provisions of this article shall apply to any contract
for the transfer of future benefit payments from an annuity, a
structured settlement, lottery proceeds or sweepstakes winnings
entered into after the first day of July, one thousand nine
hundred ninety-eight.
§46A-4A-4. Violation; penalties.
Any person who engages in the business of purchasing the
right to receive future payments in violation of the provisions
of this article is guilty of a misdemeanor and, upon conviction
thereof, shall be fined not less than ten thousand dollars and
confined in the county or regional jail for a period of not less
than six months nor more than twelve months.
§46A-4A-5. Article remedial; liberal construction.
The purpose of this article is to settle and to afford
relief from uncertainty with respect to rights, status and other
legal relations and, in this regard, this article is remedial and
to be liberally construed and administered.
NOTE: The purpose of this bill is to provide for the
regulation of the business of purchasing the right to receive the
future payments from annuities, court settlements, lottery
payoffs, sweepstakes payoffs or other similar payment
arrangements.
This article is new; therefore, strike-throughs and
underscoring have been omitted.