Senate Bill No. 464
(By Senators Kessler and Love)
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[Introduced January 28, 2008; referred to the Committee on
Banking and Insurance; and then to the Committee on the
Judiciary.]
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A BILL to amend and reenact §46A-6H-3 of the Code of West Virginia,
1931, as amended, relating to requiring court approval for
certain structured settlement transfers; enhancing protection
for consumers and dependents thereon; requiring appointment of
guardian ad litem; payment of guardian ad litem, attorneys'
fees and costs; requiring findings; and standard of proof.
Be it enacted by the Legislature of West Virginia:
That §46A-6H-3 of the Code of West Virginia, 1931, as amended,
be amended and reenacted to read as follows:
ARTICLE 6H. TRANSFERS OF RIGHT TO RECEIVE FUTURE PAYMENTS.
§46A-6H-3. Requirement of court approval for certain structured
settlement transfers.
(a) In addition to the
other requirements
of set forth in this article,
the all transfer
agreement agreements shall must be
approved by the circuit court of the county wherein the consumer
resides or where the structured settlement agreement was executed.
when:
(1) The structured settlement payment rights belong to an
infant or an incompetent person; or
(2)The structured settlement payment rights arise from a
personal injury or other claim.;and
(i)The aggregate of the structured settlement payment rights
exceeds forty thousand dollars; and
(ii)The structured settlement agreement contains a provision
restricting the right of the consumer to assign or transfer the
consumer's future payment rights.
(b) The
proposed transferee shall commence the action by
filing a petition with the court seeking approval of the transfer,
and providing to the court the disclosure statement required by
subsection (a), section two of this article.
(c) The circuit court shall set a time and date for a hearing
on the matter within
twenty-one thirty days of the date of the
filing of the petition. The transferee shall notify the consumer
and all interested parties of the date and time of the hearing and
provide them with a copy of the petition.
(d) The court shall appoint a guardian ad litem
for the
consumer in
all cases.
where the structured settlement payment rights belong to an infant, an incompetent person or a ward of the
court The guardian ad litem shall review the requisite disclosures
and make an independent inquiry to determine whether the proposed
transfer is fair, reasonable and in the best interests of the
consumer
and any dependents of the consumer and determining if
transfer has been attempted or accomplished before. Such
information shall be reported to the court during the hearing on
the matter.
(e) An interested party has the right to appear and contest
the proposed transfer at the time of the hearing. If, after proper
notice, the interested party does not make an appearance, then the
interested party shall be bound by the court's ruling.
(f) After a hearing or upon its own motion, the court may
approve the transfer if the court finds that:
(1) The consumer is mentally competent to make the decisions
related to the proposed transfer and is not addicted to any
controlled substance or alcohol;
(1) (2) The consumer has
demonstrated presented clear and
convincing evidence that: (A) He or she, or his or her
family
parents or dependents, is facing a financial hardship
and that the
transfer would alleviate and that the transfer would not subject
the consumer or the consumer's family to undue financial hardship
in the future;
or and (B) the transfer is in the best interest of
the consumer
and his or her dependents: Provided, That the judge shall
disclose the inquire of the guardian ad litem and the
transferee as to possible adverse tax consequence to the consumer
and inform the consumer of the result of said inquiry;
(2) (3) The transferee is in compliance with the provisions of
section two of this article; and
(3) (4) The transfer agreement does not contravene the terms
of the structured settlement agreement, including any restrictions
on the right of the consumer to transfer his or her structured
settlement payment rights, unless the annuity issuer and structured
settlement obligor have consented to the transfer. However, the
approval of the annuity issuer and the structured settlement
obligor shall not be required if, at the time the consumer and the
transferee entered into the transfer agreement, a favorable tax
determination was in effect.
(g) The court shall award the guardian ad litem reasonable
fees for representing the consumer.
Such Attorneys' fees
and costs
shall be paid by the transferee.
(h) A consumer may request court approval for a transfer that
does not mandate court approval under this section. Such voluntary
petition by the consumer shall then become subject to the
provisions of this section. The transferee shall be responsible
for filing the action pursuant to subsection (b) of this section,
and the consumer shall be responsible for attorney's fees or
guardian ad litem fees.
NOTE: The purpose of this bill is to increase protection to
beneficiaries of structured settlements as they relate to
settlement transfers.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
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