[atlas:bill]

AN ACT Relating to structured settlements; and adding a new chapter to Title 48 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. DEFINITIONS. The definitions in this section apply throughout this chapter unless the context clearly requires otherwise:

(1) "Annuity issuer" means an insurer that has issued any insurance contract used to fund periodic payments under a structured settlement;

(2) "Interested parties" means, with respect to any structured settlement, the payee, any beneficiary irrevocably designated in the structured settlement to receive payments after the payee's death, the annuity issuer, and the structured settlement obligor;

(3) "Payee" means an individual who is receiving payments under a structured settlement;

(4) "Structured settlement" means an arrangement for periodic payment of damages established by settlement or judgment in resolution of a tort claim or for periodic payments in settlement of a worker's compensation claim;

(5) "Structured settlement agreement" means the agreement, judgment, stipulation, or release embodying the terms of a structured settlement, including the rights of the payee to receive periodic payments;

(6) "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 under an agreement providing for qualified assignment within the meaning of section 130 of the internal revenue code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended;

(7) "Structured settlement payment rights" means the right to receive periodic payments, including lump sum payments, under a structured settlement, whether from the settlement obligor, annuity issuer, or any other person;

(8) "Transfer" means sale, assignment, or other conveyance of structured settlement payment rights by a payee to a third party for consideration;

(9) "Transfer agreement" means the agreement providing for transfer of structured settlement payment rights from a payee to a transferee;

(10) "Transferee" means any person receiving structured settlement payment rights resulting from a transfer;

(11) "Applicable laws" means the federal laws of the United States and the laws of the state of Washington;

(12) "Third party" means any person or entity other than a structured settlement obligor or annuity issuer; and

(13) "Future value" means the total amount of any and all periodic payments to be made pursuant to a structured settlement that are unpaid as of the effective date of the transfer agreement.

NEW SECTION. Sec. 2. CONDITIONS. (1) No structured settlement agreement or transfer of structured settlement payment rights shall be effective unless all of the provisions in this section are satisfied.

(2) Prior to or contemporaneous with the date on which the payee executes a structured settlement agreement, or in the case of a transfer, prior to or contemporaneous with the date on which the payee executes a transfer agreement, the payee must have been provided with a disclosure statement, in bold type, no smaller than 14 points, setting forth the following:

(a) The amounts and due dates of all payments due under the structured settlement agreement or, in the case of a transfer, the amount and due dates of all structured settlement payments to be transferred;

(b) The aggregate amount of all payments due under the structured settlement agreement or, in the case of a transfer, the aggregate amount of all structured settlement payments to be transferred;

(c) The discounted present value of all payments due under the structured settlement agreement or, in the case of a transfer, the discounted present value of all structured settlement payments to be transferred and the discount rate used in determining such discounted present value;

(d) The gross amount payable to the structured settlement obligor and the annuity issuer in return for their agreement to make the payments due under the structured settlement agreement to the payee or, in the case of a transfer, the gross amount payable to the payee in exchange for the structured settlement payments to be transferred;

(e) The gross amount of all brokers' commissions, rebates, service charges, application or processing fees, closing costs, filing or administrative charges, legal fees, notary fees and other commissions, fees, costs, expenses, and charges related to the structured settlement agreement or, in the case of a transfer, payable by the payee or deductible from the gross amount otherwise payable to the payee in connection with the transfer; and

(f) In the case of a transfer of structured settlement payment rights, the net amount payable to the payee after the deduction of all commissions, fees, costs, expenses, and charges described in (e) of this subsection.

(3) The payee must be represented by independent legal counsel in connection with the structured settlement or transfer.

(4) In the case of a transfer only, the payee and/or the transferee shall provide the following proper notification to all interested parties at least fourteen days prior to the anticipated closing date of the transfer:

(a) Written notice of the transfer, including the anticipated closing date;

(b) A copy of the disclosure statement required by subsection (2) of this section; and

NEW SECTION. Sec. 3. RIGHT OF RESCISSION. Any payee who enters into a structured settlement or structured settlement transfer agreement shall have an absolute, irrevocable, and nonwaivable five-day right of rescission. During the five-day rescission period, the payee may rescind and cancel the structured settlement or the structured settlement transfer agreement without penalty or further obligation.

NEW SECTION. Sec. 4. APPLICABILITY, NONWAIVER. (1) This chapter applies to any structured settlement and any transfer of structured settlement payment rights involving a payee domiciled in this state. The provisions of this chapter may not be waived.

(2) This chapter applies to any structured settlement or transfer of structured settlement payment rights executed on or after the effective date of this act. This chapter does not impair, limit, effect, or otherwise apply to any structured settlement or transfer agreement executed prior to the effective date of this act.

NEW SECTION. Sec. 5. CAPTIONS NOT LAW. Captions used in this chapter are not any part of the law.

NEW SECTION. Sec. 6. Sections 1 through 5 of this act constitute a new chapter in Title 48 RCW.