by John Darer® CLU ChFC MSSC CeFT RSP CLTC
Judges reviewing petitions to transfer structured settlement payment rights must determine if the transfer is in the best interest of the annuitant and applicable dependents under the federal and state law.
While the system generally works well, business conduct alleged in recent legal cases involving sizable structured settlements and questionable judicial oversight in certain jurisdictions, should give anyone pause.
What improvements are necessary?
- It should be mandatory in every state that judges reviewing petitions to transfer structured settlement payment rights have information about prior transfers or attempts to transfer structured settlement payment rights. It should be the responsibility of the settlement purchaser to investigate and to provide and certify this information as part of any petition.
- An in person examination of the seller should be required under local rules, whether or not in-camera reviews are mandated under state law.
- Serial transfers or multiple attempts to transfer within short time frames, should be automatically flagged for audit.
- As I have been saying for years, a system of licensing and enforcement must be developed that provides a meaningful disincentive to engage in questionable practices that circumvent the laws to which settlement purchasers agreed to. If a company or individual knows that the consequences of certain behavior will lead to a heavy fine or termination of their ability to do business in a state, they may be less likely to engage in such activity.
Judges Reviewing Petitions to Transfer Structured Settlement Payment Rights Must Be Mindful of The Consequences of Making the Wrong Call on Best Interest
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