SB 332 — Revises provisions relating to structured settlements. (BDR 3-960)

A person shall not act as a transferee, attempt to acquire structured settlement payment rights through a transfer from a payee who resides in this State or file a structuredstructuredsfer settlement transfer proceeding in this State unless the person is registered with the Division to do business in this State as a structured settlement purchase company.

(1) Is intended to protect payees who do business with the applicant when the applicant is acting as a structured settlement purchase company;

andandplicant is acting as a structured settlement (2) Complies with all applicable provisions of sections 2 to 41, inclusive, of this act;

The applicant must submit to the Division with each initial and renewal application a copy of the surety bond, letter of credit - *SB332_R1* – 6 – or cash bond obtained by the applicant for the purposes of subsection 3.

A surety bond, letter of credit or cash bond obtained for the purposes of subsection 3 must be effective concurrently with the registration- of81st theSession applicant(2021) and– must6 remain– in effect for not less than 3 years after the expiration or termination of the registration.

and (b) Provide a source for recovery for a payee if the payee obtains a judgment against the structured settlement purchase companycomSec. for a violation of sections 2 to 41, inclusive, of this act.

Sec.

In addition to any other requirements set forthforths inact. sections 2 to 41, inclusive, of this act, a natural person who applies for the issuance or renewal of a registration as a structured settlement purchase company shall:

in sections 2 to 41, inclusive, of this act, a natural person who applies for the issuance or renewal of a registration as a structured settlement purchase company shall:

3.Division if the applicant:

A registration may not be issued or renewed by the Division(a) ifFails to submit the applicant:statement required pursuant to subsection 1;

(a)or Fails(b) toIndicates submiton the statement requiredsubmitted pursuant to subsection 1;1 that the applicant is subject to a court order for the support of a child and is not in compliance with the order or a plan approved by the district attorney or other public agency enforcing the order for the repayment of the amount owed pursuant to the order.

or- (b)81st IndicatesSession on(2021) the statement submitted pursuant to subsection 1 that the applicant is subject to a court order for the - *SB332_R1* – 7 – support4. of a child and is not in compliance with the order or a plan approved by the district attorney or other public agency enforcing the order for the repayment of the amount owed pursuant to the order.

4.If an applicant indicates on the statement submitted pursuant to subsection 1 that the applicant is subject to a court order for the support of a child and is not in compliance with the order or a plan approved by the district attorney or other public pursuant to the order, the Division shall advise the applicant to contact the district attorney or other public agency enforcing the order to determine the actions that the applicant may take to satisfy the arrearage.

If an applicant indicates on the statement submitted pursuant to subsection 1 that the applicant is subject to a court order for the support of a child and is not in compliance with the order or a plan approved by the district attorney or other public agency enforcing the order for the repayment of the amount owed pursuant to the order, the Division shall advise the applicant to contact the district attorney or other public agency enforcing the order to determine the actions that the applicant may take to satisfy the arrearage.

The Division shall reinstate a registration that has been suspended by a district court pursuant to NRS 425.540 if the Division receives a letter issued to the holder of the registration by the district attorney or other public agency pursuant to NRS 425.550 stating that the person whose registration was suspended has complied with the subpoena or warrant or has satisfied the arrearagearrSec. pursuant to NRS 425.560.

Sec.

- *SB332_R1* – 8 – Sec.

The liability of the surety which issued a surety bond used by a structured settlement purchase company to satisfy - 81st Session (2021) – 8 – the requirements of section 29 of this act must not be affected by any:

(a) Breach of contract, breach of warranty, failure to pay a premium or other act or omission of the structured settlement pur(b) Insolvency or bankruptcy of the structured settlement purchase company;company.

or (b) Insolvency or bankruptcy of the structured settlement purchase company.

A surety which issued a surety bond used by a structured settlement purchase company to satisfy the requirements of section 29 of this act and the structured settlement purchase company which obtained the surety bond shall not cancel or modify the surety bond during the term for which it is issued unless the surety or the structured settlement purchase company provides written notice to the Division at least 20 days before the effective date of the cancellation or modification.

If a surety bond used by a structured settlement purchase company to satisfy the requirements of section 29 of this act is modified so as to make the surety bond not comply with any provision of sections 2 to 41, inclusive, of this act, or the surety bond is cancelled, the registration of the structured settlement purchase company automatically expires on the effective date of the modification or cancellation unless a new surety bond, letter of credit or cash bond which complies with sections 2 to 41, inclusive, of this act is filed with the Division on or before the effective date of the modification or cancellation.

- *SB332_R1*81st Session (2021) – 9 – (a) Pursue or complete a transfer with a payee without complying with all applicable provisions of sections 2 to 41, inclusive, of this act.

(b) Refuse or fail to fund a transfer after court approval of the transfer.tra(c) Acquire structured settlement payment rights from a payee without complying with all applicable provisions of sections 2 to 41, inclusive, of this act, including, without limitation, obtaining court approval of the transfer in accordance with sections 2 to 41, inclusive, of this act.

(c)(d) AcquireIntentionally structuredfile settlement payment rights from a payeestructured withoutsettlement complyingtransfer withproceeding allin applicableany provisionscourt ofother sectionsthan 2the tocourt 41,specified inclusive,in section of this act, including,unless withoutthe limitation,transferee obtainingis courtrequired approvalto offile the transfer in accordancea withdifferent sectionscourt 2by toapplicable 41,law. inclusive, of this act.

(d) Intentionally file a structured settlement transfer proceeding in any court other than the court specified in section 40 of this act, unless the transferee is required to file in a different court by applicable law.

and (3) A reasonable referral fee to an attorney, certified public accountant,professional actuary,adviser in connection with a transfer.her licensed insurance(f) agentIntentionally advertise materially false or othermisleading licensedinformation professionalregarding adviserthe inproducts connectionor withservices aof transfer.the transferee or structured settlement purchase company.

(f) Intentionally advertise materially false or misleading information regarding the products or services of the transferee or structured settlement purchase company.

(i) Except as otherwise provided in this paragraph, intervene in a pending structured settlement transfer proceeding if the transferee or structured settlement purchase company is not a party to the proceeding or an interested party relative to the proposed transfer which is the subject of the pending structured - 81st Session (2021) – 10 – do not prevent a structured settlement purchase company fromraph intervening in a pending structured settlement transfer proceeding if the payee has signed a transfer agreement with the structured settlement purchase company within 60 days before the filing of the pending structured settlement transfer proceeding and the structured settlement purchase company which filed the pending structured settlement transfer proceeding violated any provision of sections 2 to 41, inclusive, of this act in connection with the proposed transfer that is the subject of the pending structured settlement transfer proceeding.

The(j) provisionsExcept ofas thisotherwise paragraphprovided doin notthis preventparagraph, aknowingly structuredcontact settlementa purchasepayee companywho fromhas -signed *SB332_R1* – 10 – intervening in a pending structured settlement transfer proceedingagreement ifand theis payeepursuing has signed a proposed transfer agreement with theanother structured settlement purchase company withinfor 60the dayspurpose beforeof inducing the filingpayee ofinto cancelling the pendingproposed structuredtransfer settlementor transfer proceedingagreement andwith the other structured settlement purchase company whichif fileda thestructured pending structured settlement transferpurchase proceedingcompany violatedand any provision of sections 2 to 41, inclusive, of this act in connection with the proposed transfer that is thepending. subject of the pending structured settlement transfer proceeding.

(j) Except as otherwise provided in this paragraph, knowingly contact a payee who has signed a transfer agreement and is pursuing a proposed transfer with another structured settlement purchase company for the purpose of inducing the payee into cancelling the proposed transfer or transfer agreement with the other structured settlement purchase company if a structured settlement transfer proceeding has been filed by the other structured settlement purchase company and is pending.

A payee may pursue a private action as a result of a violation of subsection 1 and may recover all damages and pursue all rights and remedies to which the payee may be entitled pursuant to sections 2 to 41, inclusive, of this act or any other app3.caA structured settlement purchase company may pursue a private action to enforce paragraphs (d), (g), (i), (j) and (k) of subsection 1 and may recover all damages and pursue all remedies to which the structured settlement purchase company may be entitled pursuant to sections 2 to 41, inclusive, of this act or any other applicable law.

3.

A structured settlement purchase company may pursue a private action to enforce paragraphs (d), (g), (i), (j) and (k) of subsection 1 and may recover all damages and pursue all remedies to which the structured settlement purchase company may be entitled pursuant to sections 2 to 41, inclusive, of this act or any other applicable law.

- 81st Session (2021) – 11 – (a) Revoke the registration of the structured settlement purchase company;

- *SB332_R1* – 11 – (b) Suspend the registration of the structured settlement purchase company for a period to be determined at the discretion of (c) Enjoin the court;structured settlement purchase company or transferee from filing new structured settlement transfer proceedings in this State or otherwise pursuing transfers in this State.

and (c) Enjoin the structured settlement purchase company or transferee from filing new structured settlement transfer proceedings in this State or otherwise pursuing transfers in this State.

1.payments to be transferred.

The amounts and due dates of the structured settlement payments2. to be transferred.

2.

- 81st Session (2021) – 12 – 6.

- *SB332_R1* – 12 – On the basis of the net amount that you will receive from us and the amounts and timing of the structured settlement payments that you are transferring to us, you will, in effect be paying interest to us at a rate of ___ percent per year.

6 7.

A direct or indirect transfer of structured settlement payment rights is not effective, and a structured settlement obligor or annuity issuer is not required to make any payment directly or indirectly to any transferee or assignee of structured settlement payment rights, unless the transfer has been approved in advance inall aof finalthe courtfollowing orderapply:d based on express findings by the court that all1. of the following apply:

1.

Following a transfer of structured settlement payment rights:

FollowingThe a transfer of structured settlement payment rights, the structured settlement obligor and the annuity issuer may rely on the transfer order in redirecting periodic payments to an assignee or transferee in accordance with the transfer order and is, as to all parties except the transferee or an assignee - 81st Session (2021) – 13 – designated by the transferee, discharged and released from any and all liability for the redirected payments.

The discharge and release is not affected by the failure of any party to the transfer to comply with sections 2 to 41, inclusive, of this act or with the transfertra2.ferThe order.transferee is liable to the structured settlement obligor and the annuity issuer:

- *SB332_R1* – 13 – 2.

The transferee is liable to the structured settlement obligor and the annuity issuer:

andor (2) The failure of any party to the transfer to comply with sections 2 to 41, inclusive, of this act.

The application must be brought in the district court of the county in which the payee is domiciled, except that if the payee is not domiciled in this State, the application must be brought in the court in this StateStatethis that approved the structured settlement agreement.

(b)- 81st Session (2021) – 14 – (c) A copy of the transferdisclosure agreement.statement required by section 37 of this act.

(c) A copy of the disclosure statement required by section 37 of this act.

- *SB332_R1* – 14 – (1) All prior transfers by the payee to the transferee or an affiliate of the transferee, or through the transferee or an affiliate of the transferee to an assignee, within the 4 years immediately preceding the date of the transfer agreement;

(3) All prior transfers by the payee to any person or entity other than the transferee or an affiliate of the transferee or an assignee of the transferee or an affiliate of the transferee within the 3 years immediately preceding the date of the transfertransferee within agreement, to the extent that the transfers or proposed transfers have been disclosed to the transferee by the payee in writing or otherwise are actually known to the transferee;

(f) Notification that any interested party is entitled to support, oppose or otherwise respond to the transferee’s application, either in person or by counsel, by submitting written comments to the courtcou(g) orNotification byof participatingthe time and place of the hearing and notification of the manner in which and the date by which written responses to the application must be filed to be considered by the court, which date must not be less than 5 days before the hearing.

(g) Notification of the time and place of the hearing and notification of the manner in which and the date by which written responses to the application must be filed to be considered by the court, which date must not be less than 5 days before the hearing.

- 81st Session (2021) – 15 – 2.

Any transfer agreement entered into by a payee who is domiciled in this State must provide that disputes under the transfer agreement, including, without limitation, any claims that the payee has breached the agreement, must be determined underin and authorize the lawstransferee or any other party to confess judgment or consent to entry of thisjudgment State.against the payee.

A transfer agreement must not authorize the transferee or any other party to confess judgment or consent to entry of judgment against the payee.

A transfer of structured settlement payment rights must not extend to any payments that are life-contingent unless, before the - *SB332_R1* – 15 – date on which the payee signs the transfer agreement, the transferee has established and has agreed to maintain procedures reasonably satisfactory to the structured settlement obligor and the annuity issuer for periodically confirming the payee’s survival and giving the structured settlement obligor and the annuity issuer prompt written notice in the event of the payee’s death.

Nothing contained in sections 2 to 41, inclusive, of this act shall:sha(a) Be construed to authorize any transfer of structured settlement payment rights in contravention of any applicable law or to imply that any transfer under a transfer agreement entered into before October 1, 2021, is valid or invalid.

(a) Be construed to authorize any transfer of structured settlement payment rights in contravention of any applicable law or to imply that any transfer under a transfer agreement entered into before October 1, 2021, is valid or invalid.

Compliance with the requirements set forth in sections 2 to 41, inclusive, of this act and fulfillment of the conditions set forth in sections 2 to 41, inclusive, of this act are solely the responsibility of the transferee in any transfer of structured settlement- payment81st rights,Session and(2021) neither– the16 structured– settlement obligor nor the annuity issuer, if any, has any responsibility for, or any liability arising from, noncompliance with such requirements or failure to fulfill such conditions.

Subject to subsections 2 to 8, inclusive, an account debtor on an account, chattel paper or a payment intangible may discharge its obligation by paying the assignor until, but not - *SB332_R1* – 16 – after, the account debtor receives a notification, authenticated by the assignor or the assignee, that the amount due or to become due has been assigned and that payment is to be made to the assignee.

2.subsection 1:ct to subsection 8, notification is ineffective under (a) If it does not reasonably identify the rights assigned;

Subject to subsection 8, notification is ineffective under subsection 1:

(a) If it does not reasonably identify the rights assigned;

Subject to subsection 8, if requested by the account debtor, an assignee shall seasonably furnish reasonable proof that the assignment has been made.

Unless the assignee complies, thethethe account debtor may discharge its obligation by paying the assignor, even if the account debtor has received a notification under subsection 1.

- 81st Session (2021) – 17 – (a) Prohibits, restricts or requires the consent of the account debtor or person obligated on the promissory note to the assignment or transfer of, or the creation, attachment, perfection or enforcement of a security interest in, the account, chattel paper, payment int(b) Provides that the assignment or transfer, or the creation, attachment, perfection or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the account, chattel paper, payment intangible or promissory note;note.

or (b) Provides that the assignment or transfer, or the creation, attachment, perfection or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the account, chattel paper, payment intangible or promissory note.

- *SB332_R1* – 17 – 6.

or (b) Provides that the assignment or transfer, or the creation, attachment, perfection, or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination,chattel rightpaper.ight of termination, or remedy under the account or chattel7. paper.

7.

This section does not apply to an assignment of a health- care-insurance receivable or to a transfer of a right to receive payments pursuant to [NRS 42.030.] sectionsections 362 to 41, inclusive, of this act.

- 81st Session (2021) – 18 – Sec.

44.

NRS 42.030 is hereby repealed.

Sec.

-~~~~~ *SB332_R1*21 –- 1881st –Session TEXT(2021) OF REPEALED SECTION settlement required.pproval of agreement to transfer structured 1.

An agreement to transfer the right to receive payments pursuant to a structured settlement to a transferee is valid and enforceable only if the transfer is approved by a district court.

The transferee must petition the district court for such approval and the court shall approve the transfer if it determines that:

(a) The transfer is in the best interest of the payee, considering the totality of the circumstances, including, without limitation, the welfare and support of the dependents of the payee;

(b) The payee has been advised in writing by the transferee to seek independent professional advice regarding the transfer and has waived such advice in writing;

andonal advice or has knowingly (c) The transfer does not violate any applicable law or the order of any court.

2.

An action pursuant to subsection 1 must be commenced in the district court:

(a) Located where the original claim which gave rise to the structured settlement was filed;

or (b) Within the county in which the payee resides.

3.

Not later than 7 days before a hearing on a petition pursuant to subsection 1, the transferee must file with the district court and serve on all interested parties and any attorney who represented the payee in the action which resulted in the settled claim a notice of proposed agreement.

The notice must include, without limitation:

(a) A copy of the petition of the transferee;

(b) A copy of the proposed agreement;

(c) A copy of the disclosure required pursuant to subsection 4;

(d) A list which includes the name and age of each dependent of the payee;

(e) A statement that any interested party may support, oppose or otherwise respond to the petition of the transferee by appearing in person or by counsel during the hearing on the petition or by submitting written comments to the court;

and (f) Notice of the time and place of the hearing, the manner in which a written response to the application must be filed and the - *SB332_R1* – 19 – date by which a written response to the petition must be filed for consideration by the court.

4.

A transferee who commences an action pursuant to subsection 1 must provide to the court with the proposed agreement a disclosure setting forth:

(a) The amounts and due dates of the payments under the structured settlement proposed to be transferred;

(b) The aggregate amount of the proposed payments to be transferred;

(c) The amount to be paid to the payee for the transfer before deducting any expenses;

required to pay other than attorney’s fees and which will bebe deducted from the amount paid to the payee for the transfer, including, without limitation, any commission owed to a broker, service charges, application or processing fees, costs of closing on the agreement, filing or administrative charges and fees paid to a notary public;

(e) The amount to be paid to the payee for the transfer after deducting the expenses;

(f) The amount of any liquidated damages which the payee is required to pay if the payee breaches the transfer agreement;

(g) The discounted present value of the payments under the structured settlement that are proposed to be transferred and the dis(h) If adverse tax consequences exist, a statement which informs the payee that such a transfer may subject the payee to adverse tax consequences with regard to the payment of federal income tax.

5.

Compliance with the requirements set forth in this section may not be waived.

6.

As used in this section:

(a) “Annuity issuer” means an insurer who has issued a contract to fund periodic payments under a structured settlement;

(b) “Dependents” include, without limitation, the spouse of a payee, any minor child of a payee and any other person for whom the payee is legally obligated to provide support, including, without limitation, alimony;

attorney, certified public accountant, actuary or other licensed professional adviser;

(d) “Interested parties” means the payee, any beneficiary irrevocably designated under the annuity contract to receive payments following the death of the payee, the annuity issuer, any person who is obligated to make payments pursuant to the structured - *SB332_R1* – 20 – settlement and any other party who has continuing rights or obligations under the structured settlement;

(e) “Payee” means a person who is receiving tax-free payments under a structured settlement and proposes to make a transfer of the right to receive payments under that structured settlement;

recurring payments and scheduled future lump-sum payments;oth (g) “Settled claim” means the original tort claim or workers’ compensation claim resolved by a structured settlement;

(h) “Structured settlement” means an arrangement for periodic payment of damages for personal injuries or sickness established by settlement or judgment in resolution of a tort claim or for periodic payments in settlement of a workers’ compensation claim;

(i) “Transfer” means any sale, assignment, pledge, consideration of the right to receive payments pursuant to afor structured settlement;

and (j) “Transferee” means a party acquiring or proposing to acquire the right to payments pursuant to a structured settlement through a transfer.

H - *SB332_R1*