by Structured Settlement Watchdog®
Structured settlement factoring transactions in Illinois became subject to stricter regulations following amendments to the Illinois Structured Settlement Protection Act, which were signed into law on August 5, 2015..
Illinois SB 1268 was jointly promoted by the National Structured Settlements Trade Association (NSSTA) and the National Association of Settlement Purchasers (NASP).
Highlights of the Illinois SSPA amendments are as follows:
- Requirement that any SSPA application involving an Illinois payee be brought in the county where the payee lives – thus preventing factoring companies from engaging in forum-shopping in Illinois.
- Requirement that Illinois courts hold hearings on SSPA applications and require that payees appear at those hearings unless they are excused for cause.
- Require that every SSPA application in Illinois include information about prior factoring transactions and attempted factoring transactions involving the same payee.
- Address the confusion that arose from the 2013 decision of the Illinois Court of Appeals in Settlement Funding v. Brenston, by confirming that the presence of anti-assignment provisions in structured settlement documents, such as the Settlement Agreement and Release, does not preclude an Illinois court from hearing a factoring application involving payment rights under that settlement
These changes are designed to help structured settlement annuitants and the Illinois state judges who must review their petition under the law and determine whether selling structured settlement payments is in the annuitant’s best interest.
Numerous legal cases across the country have highlighted serious concerns about whether structured settlement protection acts effectively safeguard annuitants from the predatory practices of structured settlement buyers.
The amendments to the Illinois Structured Settlement Protection Act represent a positive development, preserving an option for Illinois residents in need of liquidity with no other viable alternative than selling their structured settlement. However, the absence of licensing requirements, solicitation regulations, and a regulator with the authority to fine or suspend violators leaves consumer and investor solicitation in structured settlements unregulated in Illinois.