Every state in the United States of America, along with the District of Columbia, has a structured settlement consumer protection act (SSPA). The laws are commonly known as Structured Settlement Protection Acts (SSPAs).  Structured settlement payment rights can be transferred. These states have certain protections in place for those selling structured settlement payment rights to a third party buyer of structured settlement payment rights.

Structured Settlement Transfer Laws generally require :

Full disclosure from structured settlement buyers: Structured settlement buyers must provide a disclosure that includes all of the terms of the transaction in a very clear and concise manner for the protection of the seller.

A “cooling off period:” The selling annuitant must be allowed a period of time during which he or she  can back out of the deal to sell structured settlement payments

Court approval/"Best interest" : all sales or transfers of annuities or structured settlement payments must have the approval of a judge. This approval will depend largely upon the seller’s unique financial situation and whether or not it is determined that such a sale is in the seller’s best interests and the interest of any applicable dependents.

Prohibition on transfer of workers compensation structured settlement payments  

State Statute

Alaska 2003 Alaska Laws Ch. 21, enacting AS §§ 09.68.200-09.68.230

Arizona Ariz. Rev. Stat. Ann. §§ 12-2901 – 12-2904

Arkansas 2005 House Bill 2614, enacting Ark. Code §§ 2381-701-23-81- 707

California Cal. Ins. Code §§ 10134-10139.5

Colorado Colo. Rev. Stat. §§ 13-23-101 – 13-23-108

Connecticut Conn. Gen. Stat. § 52-225g – 52-225l

Delaware Del. Code Ann. Tit. 10, §§ 6601-6604

Florida  Fla. Stat. Ann. § 626.99296

Georgia Ga. Code Ann. §§ 51-12-70-72, §§51-12-70-76-77

Idaho   Idaho Code § 28-9-109

Illinois 215 Ill. Comp. Stat. §§ 153/1 – 153/35

Indiana Ind. Code Ann. §§ 34-50-2-1 – 34-50-2-11

Iowa Code Ann. §§ 682.1 – 682.7

Kansas 2005 House Bill No. 2160

Kentucky Ky. Rev. Stat. Ann. §§ 454.430 – 454.435

Louisiana   La. Rev. Stat. Ann. § 9:2715

Maine Me. Rev. Stat. Ann. tit. 24A §§ 601.25, 2241-46

Maryland   Md. Code Ann. Cts. & Jud. Proc. §§ 5-1101-5-1105

Massachusetts Mass. Gen. Laws Ann. Ch. 231C, § 1-5

Michigan   Mich. Comp. Laws. Ann., §§ 691.1191 – 691.1197

Minnesota   Minn. Stat. §§ 549.30 – 549.34  (2022 Update effective August 1, 2022)

Mississippi Miss. Code Ann. §§ 11-57-1 – 11-57-15

Missouri Mo. Rev. Stat. §§ 407.1060 – 407.1068

Montana 2005 Senate Bill No. 122

Nebraska Neb. Rev. Stat. §§ 25-3101 – 25-3107

Nevada N.R.S. § 42.030

New Hampshire   Chapter 408-G STRUCTURED SETTLEMENT PROTECTION

New Jersey N.J. Stat. Ann. §§ 2A: 16-63 – 16-69

New Mexico 2005 House Bill 495

New York N.Y. Gen. Oblig. Law §§ 5-1701-1709

North Carolina N.C. Gen. Stat. Art. 44B §§ 1-543.10 – 1-543.15 and Art. 33 § 1-394.1

Ohio   Ohio Rev. Code. Ann. §§ 2323.58 – 2323.587

Oklahoma Okla. Stat. Ann. tit. 12 §§ 3238 – 3245

Oregon 2005 Senate Bill 645

Pennsylvania 40 Pa. Cons. Stat. Ann. §§ 4001-4009

Rhode Island R.I. Gen. Laws Ann. §§ 27-9.3-1 – 27-9.3-7

South Carolina S.C. Code Ann. §§ 15-50-10 – 15-50-70

South Dakota S.D. Codified Laws §§ 21-3B-1 – 21-3B-12

Tennessee   Tenn. Code Ann. Tit. 47, Ch. 18 §§ 1-7

Texas Tex. Rev. Civ. Stat. Ann. §§ 141.001 – 141.007

Utah Utah Code Ann. §§ 78-59-101-108

Virginia Va. Code Ann. §§ 59.1-475–477

Washington State Wash. Rev. Code Ann. §§ 19.205.010 – 19.205.060, § 19.205.900

Washington (DC)  D.C. Law 22-235. Structured Settlements and Automatic Renewal Protections Act of 2018

Wisconsin  Chapter 895 subchapter III Structured Settlement Transfers 

W. Virginia   W. Va. Code §§ 46A-6H-1 – 46A-6H-8

Unregulated Sales Practices/Lack of Licensure | Gaps in Structured Settlement Factoring Regulation

Despite structured settlement protection acts in all 50 states and the District of Columbia, certain structured settlement factoring companies have found ways to exploit the laws, in ways possibly not contemplated by state legislatures,  due to unregulated sales practices of structured settlement factoring companies and their public facing sales representatives. There is a clear lack of symmetry when one compares the regulation of solicitors in insurance (including but not limited to structured settlement annuities), real estate, banking and securities with structured settlement factoring. National publicity of such exploitation has led to changes in laws of certain states that have improved their efficacy. But there is plenty of more work to be done.  4structures.com, LLC President John Darer continues to be at the forefront of efforts to improve the laws and through his ongoing pro bono efforts exposing questionable business practices as the Structured Settlement Watchdog®.

Read  John Darer's September 2015 white paper on Secondary Market Constructive Solutions

State Legislatures Act When They Get Negative Press

Minnesota

In May 2022, the Minnesota Legislature approved important amendments in response to a blistering expose published by the Minneapolis Star Tribune. Among them, is a new provision that gives the court the discretion in any case, "to appoint an attorney to make an independent assessment and advise the court whether the financial terms of the proposed transfer agreement are fair and reasonable, and whether the transfer is in the best interests of the payee and the payee's dependents.   The evaluator must present the findings of the evaluation to the court at or prior to a hearing on the application. All costs and reasonable fees for the evaluator shall be borne by the transferee".  The updates to the Minnesota Structured Settlement Protection Act were signed into law and became effective August 1, 2022.

South Carolina

Then in the Fall of 2022, South Carolina legislators recognized that South Carolina's Structured Settlement Protection Act needed significant improvement after troubling findings appeared in a multi-part expose in Myrtle Beach Sun News, a McClatchy publication, and other regional and national press.  On May 16, 2023, South Carolina Governor Henry McMaster signed a comprehensive structured settlement protection reform bill that protects severely injured accident victims and their families who receive long-term structured settlement payments arising from settlements of lawsuits for traumatic brain injuries, and other injuries. The bill provides additional definitions, a list of acts in which a structured settlement purchase company cannot engage, and factors which the court must consider in determining if the transfer of the structured settlement payment rights is in the best interest of the payee.    SC S0259 | 2023-2024 | 125th General Assembly | LegiScan

South Carolina is on the right track. South Carolina's Structured Settlement Protection Act is now one of the toothiest in the USA. The 2024 Badger settlement not only hits the structured settlement factoring entities led by Ryan Blank, it also hits the secondary market assignee (and, by entension its investors). bloodies the noses of the lawyers and law firms for the factoring company, guardians ad litem and the lawyer or advisor providing substandard independent professional advice.  See STATE OF SOUTH CAROLINA - CASE#2023CP0300062 IN THE COURT OF COMMON PLEAS THIRD JUDICIAL CIRCUIT COUNTY OF ALLENDALE captioned TEJWANNA HAY, as guardian and on behalf of STB, FB, and SDB (minors), Plaintiff, v. Taylor A. Peace, Harrell, Martin & Peace, P.A., Defendants.   Also see SC Murdaugh victim who lost millions to firms get money back | Myrtle Beach Sun News (myrtlebeachonline.com)

While 50 states and DC have structured settlement protection acts only 6 states require registration of structured settlement transferees Maine, Maryland,   Louisiana, Georgia, South Carolina and West Virginia. 

Investors who buy structured settlement receivables ( assigned another person's rights to structured settlement payments) have zero chance of insolvency protection in 40 states.

There is no safety net for Investors in structured settlement receivables in the event of insolvency of the life insurance company that issues the underlying annuity. In those 40 states, it doesn't matter when the investor acquired the structured settlement receivables. They are screwed in the event of insolvency. Investors may think they are buying an annuity but they are not buying an annuity. They are buying structured settlement receivables The annuity purchased when the original structured settlement was established, remains owned by the qualified assignment company.

Last updated February 8, 2025

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