Full text and statutory guidelines for the Model State Structured Settlement Protection Act.
The California Model State Structured Settlement Protection Act is a comprehensive legislation designed to safeguard the interests of structured settlement beneficiaries in the state of California. This act aims to establish a framework for the proper transfer and protection of structured settlement payments, ensuring fair treatment and preventing exploitation of vulnerable individuals. Under the California Model State Structured Settlement Protection Act, there are two primary types of transactions that are regulated: 1. Structure Settlement Transfers: This type of transaction refers to the transfer of structured settlement payment rights from the original beneficiary to a third party. It allows individuals to access a lump sum of cash in exchange for a portion or the entirety of their future structured settlement payments. The act puts forth specific guidelines and requirements for these transfers, including mandatory court approval to ensure the transaction is in the best interest of the beneficiary. 2. Assignment Companies: The act also covers the regulation and oversight of structured settlement purchasing companies, commonly known as "assignment companies." These companies specialize in purchasing structured settlement payments at a discounted rate and assume the rights to receive future payments. The California Model Act imposes obligations on assignment companies to provide transparent and fair terms to beneficiaries when entering into such agreements. The California Model State Structured Settlement Protection Act addresses various key issues to protect the best interests of beneficiaries, including: 1. Court Approval: The act ensures that any transfer or assignment of structured settlement payments requires court approval. This requirement aims to validate the fairness of the transaction and ascertain that it benefits the beneficiary, considering their unique circumstances. 2. Disclosure Requirements: The act mandates that all parties involved in a structured settlement transaction must provide comprehensive disclosure statements to the beneficiary. These statements contain essential information such as the total amount of the structured settlement, the amount being transferred or assigned, any fees or costs involved, and any financial advice obtained by the beneficiary during the process. 3. Cooling-Off Period: The act establishes a mandatory waiting period, known as the "cooling-off period," between the disclosure statement being delivered to the beneficiary and the finalization of the transaction. This period allows the beneficiary to carefully review the terms, seek independent professional advice, and reconsider the decision without facing undue pressure. 4. Non-Assignability Provisions: The act restricts the assignability of structured settlements in certain circumstances to protect the beneficiary's rights. These provisions prevent the assignability of structured settlements when they involve public assistance benefits or arise from workers' compensation claims. Overall, the California Model State Structured Settlement Protection Act plays a crucial role in safeguarding the rights of structured settlement beneficiaries. It ensures transparency, fairness, and proper oversight of structured settlement transactions, providing valuable protections for these vulnerable individuals.
