Sell Annuities & Structured Settlements in New York

Sell Structured Settlements                       Sell Structured Insurance Settlements


Prior to selling structured insurance settlements in NY, one needs to be keenly aware of their rights as a structured insurance settlement recipient under the New York Structured Settlement Protection Act.

Receiving lump sum cash for structured settlement payments can be an exciting proposition to a structured insurance settlement recipient in New York. Settlement Exchange recommends that you review your structured insurance recipient and annuitant rights before contemplating the sale of structured settlement payments in New York or even procuring cash quotes for your structured settlement.

We firmly believe that basic education is the key to securing the best quotes for structured insurance settlements and lottery annuity payments. We always advise that one knows their rights as protected under the New York Structured Settlement Protection Act. We also advise that one should secure their own legal advice before attempting to get cash for structured settlement payments.

The New York Structured Settlement Protection Act dictates that a transferee of structured settlements must reside in the state of New York. A New York State court must also approve the selling of the structured insurance settlement and the sale of structured insurance settlements has to be in the best interest of the structured settlement recipient in all cases.

We have attached a copy of the New York Structured Settlement Protection Act and a direct link for your benefit.

2010 New York Code
GOB – General Obligations

§ 5-1701. Definitions. For purposes of this title:

(a)  “annuity  issuer”  means  an insurer that has issued an insurance

contract used to fund periodic payments under a structured settlement;

(b) “dependents” include a payee’s spouse and minor children  and  all

other  persons  for  whom  the  payee  is  legally  obligated to provide

support, including alimony or maintenance;

(c) “discounted present value”  means  the  present  value  of  future

payments,  as  determined  by  discounting  such payments to the present

using  the  most  recently  published  applicable   federal   rate   for

determining  the  present  value  of an annuity, as issued by the United

States Internal Revenue Service;

(d) “gross advance amount” means the sum payable to the payee  or  for

the  payee’s  account  as  consideration  for  a  transfer of structured

settlement payment rights before any reductions for transfer expenses or

other deductions to be made from such consideration;

(e) “independent professional advice” means  advice  of  an  attorney,

certified  public  accountant,  actuary  or  other licensed professional


(i) who is engaged by a claimant or payee to render advice  concerning

the  legal, tax and financial implications of a structured settlement or

a transfer of structured settlement payment rights;

(ii) who is not in any manner affiliated with or  compensated  by  the

defendant in such settlement or the transferee of such transfer; and

(iii)  whose compensation for rendering such advice is not affected by

whether a settlement or transfer occurs or does not occur;

(f)  “interested  parties”  means,  with  respect  to  any  structured

settlement,  the payee, any beneficiary irrevocably designated under the

annuity contract to receive payments following the  payee’s  death,  the

annuity  issuer,  the structured settlement obligor, and any other party

that  has  continuing  rights  or  obligations  under  such   structured


(g)  “net  advance  amount”  means  the  gross advance amount less the

aggregate  amount  of  the  expenses  required  to  be  disclosed  under

subdivision (f) of section 5-1703 of this title;

(h)  “payee”  means  an  individual who is receiving tax free payments

under a structured settlement and proposes to make a transfer of payment

rights thereunder;

(i) “periodic payments” includes both recurring payments and scheduled

future lump sum payments;

(j) “qualified assignment agreement” means an agreement providing  for

a  qualified  assignment within the meaning of section 130 of the United

States Internal Revenue Code, United States Code Title  26,  as  amended

from time to time;

(k)  “settled  claim”  means  the  original  tort  claim resolved by a

structured settlement;

(l) “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;

(m) “structured settlement agreement” means the  agreement,  judgment,

stipulation, or release embodying the terms of a structured settlement;

(n)  “structured  settlement  obligor”  means,  with  respect  to  any

structured settlement, the party that has the continuing  obligation  to

make  periodic  payments  to  the  payee  under  a structured settlement

agreement or a qualified assignment agreement;

(o) “structured settlement payment rights”  means  rights  to  receive

periodic  payments  under  a  structured  settlement,  whether  from the

structured settlement obligor or the annuity issuer, where:

(i) the payee is domiciled in, or the domicile or principal  place  of

business  of  the structured settlement obligor or the annuity issuer is

located in, this state;

(ii)  the  structured  settlement agreement was approved by a court in

this state; or

(iii) the structured settlement agreement is expressly governed by the

laws of this state;

(p) “terms of the structured settlement” include, with respect to  any

structured settlement, the terms of the structured settlement agreement,

the  annuity  contract, any qualified assignment agreement and any order

or approval of  any  court  authorizing  or  approving  such  structured


(q)  “transfer  means  any  sale, assignment, pledge, hypothecation or

other alienation or encumbrance of structured settlement payment  rights

made  by  a  payee  for consideration; provided that the term “transfer”

does not include the creation or perfection of a  security  interest  in

structured  settlement payment rights under a blanket security agreement

entered into with an insured depository institution, in the  absence  of

any  action  to  redirect  the  structured  settlement  payments to such

insured depository institution, or an agent  or  successor  in  interest

thereof,  or otherwise to enforce such blanket security interest against

the structured settlement payment rights;

(r) “transfer agreement” means the agreement providing for transfer of

structured settlement payment rights from a payee to a transferee;

(s) “transfer expenses” means all expenses  of  a  transfer  that  are

required  under  the  transfer  agreement  to  be  paid  by the payee or

deducted from the gross advance amount, including,  without  limitation,

court  filing  fees, attorneys fees, escrow fees, lien recordation fees,

judgment and lien search fees, finders’  fees,  commissions,  and  other

payments  to  a broker or other intermediary; “transfer expenses” do not

include preexisting obligations of the payee  payable  for  the  payee’s

account from the proceeds of a transfer; and

(t)  “transferee”  means  a  party  acquiring  or proposing to acquire

structured   settlement   payment   rights   through   a   transfer   or



§  5-1702.  Initial  disclosure  of  structured  settlement  terms. In

negotiating a structured settlement of claims brought by or on behalf of

a claimant who is domiciled in this state, the defendant or  defendant’s

legal  representative  shall  disclose in writing to the claimant or the

claimant’s legal representative all of the following information that is

not otherwise specified in the structured settlement agreement:

(a) the amounts and due dates of the  periodic  payments  to  be  made

under  the structured settlement agreement. In the case of payments that

will be subject to periodic percentage increases, the amounts of  future

payments  may  be  disclosed by identifying the base payment amount, the

amount and timing of  scheduled  increases,  and  the  manner  in  which

increases will be compounded;

(b) the amount of the premium payable to the annuity issuer;

(c) the nature and amount of any cost that may be deducted from any of

the periodic payments;

(d)  where  applicable,  that any transfer of the periodic payments is

prohibited by the terms of the structured settlement and  may  otherwise

be prohibited or restricted under applicable law; and

(e)  a  statement  that  the claimant is advised to obtain independent

professional  advice  relating  to  the   legal,   tax   and   financial

implications  of  the settlement, including any adverse consequences and

that the defendant or defendant’s legal representative may not refer any

advisor, attorney or firm for such purpose.


§  5-1703. Required disclosures to payee. Not less than ten days prior

to the  date  on  which  the  payee  signs  a  transfer  agreement,  the

transferee  shall provide to the payee by first class mail and certified

mail, return receipt requested or United States postal service  priority

mail,  a  separate  disclosure  statement,  in bold type no smaller than

fourteen points, setting forth:

(a) the amounts and due dates of the structured settlement payments to

be transferred;

(b) the aggregate amount of such payments;

(c) the discounted present value of the payments  to  be  transferred,

which  shall  be  identified as the “calculation of current value of the

transferred structured settlement payments under federal  standards  for

valuing  annuities”,  and the amount of the applicable federal rate used

in calculating such discounted present value;

(d) the price quote from the original annuity issuer or, if such price

quote is not readily available from the original annuity issuer, then  a

price  quote  from  two  other annuity issuers that reflects the current

cost of purchasing a comparable annuity  for  the  aggregate  amount  of

payments to be transferred;

(e)  the gross advance amount and the annual discount rate, compounded

monthly, used to determine such figure;

(f) an itemized listing of all commissions, fees, costs, expenses  and

charges  payable  by  the  payee  or  deductible  from  the gross amount

otherwise payable to the payee and the total amount of such fees;

(g) the net advance amount including  the  statement:  “The  net  cash

payment you receive in this transaction from the buyer was determined by

applying  the  specified  discount rate to the amount of future payments

received by the buyer, less  the  total  amount  of  commissions,  fees,

costs, expenses and charges payable by you”;

(h)  the  amount of any penalties or liquidated damages payable by the

payee in the event of any breach of the transfer agreement by the payee;


(i) a statement that the payee has the right to  cancel  the  transfer

agreement,  without  penalty  or  further obligation, not later than the

third business day after the date the agreement is signed by the payee.


§  5-1704.  Provisions  prohibited  in transfer agreement. No transfer

agreement or other document or agreement executed  in  association  with

the  transfer  shall contain any provision described in this section. To

the extent that  a  prohibited  provision  is  included  in  a  transfer

agreement  such  provision shall be void and unenforceable. A prohibited

provision is:

(a) any provision that waives the payee’s right to sue under any  law,

or  where  the  payee agrees not to sue, or which waives jurisdiction or

standing to sue under the transfer agreement;

(b) any provision that  requires  the  payee  to  indemnify  and  hold

harmless the transferee, or to pay the transferee’s costs of defense, in

any  claim  or  action  brought  by  the  payee on or the payee’s behalf

contesting the transfer for any reason;

(c) any provision that requires the  payee  to  pay  the  transferee’s

attorney’s  fees  or  costs if the transfer contemplated by the transfer

agreement is not completed; and

(d) any provision that requires the payee to  pay  any  tax  liability

arising  under  federal  tax  laws,  other  than  the  seller’s  own tax

liability, if any, that results from the transfer.



§  5-1705.  Procedure  for  approval  of  transfers. (a) An action for

approval of a transfer of a structured settlement shall be by a  special


(b)  Such  proceeding  shall  be  commenced  to  obtain  approval of a

transfer of structured settlement payment rights. Such proceeding  shall

be commenced:

(i) in the supreme court of the county in which the payee resides; or

(ii) in any court which approved the structured settlement agreement.

(c)  A  copy  of  the notice of petition and petition or order to show

cause and petition shall be served upon all interested parties at  least

twenty  days  before  the  time  at  which the petition is noticed to be

heard. A response shall  be  served  at  least  seven  days  before  the

petition is noticed to be heard.

(d)  A  petition  for  approval of a transfer of structured settlement

payment rights shall include:

(i) a copy of the transfer agreement;

(ii) a copy of the disclosure statement and proof of  notice  of  that

statement required under section 5-1703 of this title; and

(iii)  a listing of each of the payee’s dependents, together with each

dependent’s age.

* NB Effective until January 1, 2011
    * § 5-1705. Procedure for approval of transfers.  (a)  An  action  for
  approval  of a transfer of a structured settlement shall be by a special
  proceeding brought on only by order to show cause.
    (b) Such proceeding  shall  be  commenced  to  obtain  approval  of  a
  transfer  of structured settlement payment rights. Such proceeding shall
  be commenced:
    (i) in the supreme court of the county in which the payee resides; or
    (ii) in any court which approved the structured settlement agreement.
    (c) A copy of the order to show cause and  petition  shall  be  served
  upon  all  interested  parties  at  least twenty days before the time at
  which the petition is noticed to be heard. A response shall be served at
  least seven days before the petition is noticed to be heard.
    (d) A petition for approval of a  transfer  of  structured  settlement
  payment rights shall include:
    (i) a copy of the transfer agreement;
    (ii)  a  copy  of the disclosure statement and proof of notice of that
  statement required under section 5-1703 of this title;
    (iii) a listing of each of the payee's dependents, together with  each
  dependent's age; and
    (iv)  a  statement  setting forth whether there have been any previous
  transfers or applications for  transfer  of  the  structured  settlement
  payment  rights and giving details of all such transfers or applications
  for transfer.
    (e) On the hearing, the payee shall attend  before  the  court  unless
  attendance is excused for good cause.
    * NB Effective January 1, 2011




§  5-1706.  Approval  of  transfers  of  structured settlement payment

rights. No direct or indirect transfer of structured settlement payment

rights shall be  effective  and  no  structured  settlement  obligor  or

annuity  issuer  shall  be  required  to  make  any  payment directly or

indirectly to any transferee of  structured  settlement  payment  rights

unless the transfer has been authorized in advance in a final order of a

court  of  competent  jurisdiction  based  upon express findings by such

court that:

(a) the transfer complies with the requirements of this title;

(b) the transfer is in the best interest of  the  payee,  taking  into

account  the  welfare and support of the payee’s dependants; and whether

the transaction, including the discount rate used to determine the gross

advance amount and the fees and  expenses  used  to  determine  the  net

advance  amount,  are  fair and reasonable. Provided the court makes the

findings as outlined in this subdivision, there is  no  requirement  for

the  court  to  find  that  an applicant is suffering from a hardship to

approve the  transfer  of  structured  settlement  payments  under  this


(c)  the  payee  has been advised in writing by the transferee to seek

independent professional advice regarding the transfer  and  has  either

received such advice or knowingly waived such advice in writing;

(d)  the  transfer  does  not contravene any applicable statute or the

order of any court or other government authority; and

(e) is written in plain language and in compliance with section  5-702

of this article.


§ 5-1707. Effects of transfer of structured settlement payment rights.

Following  a transfer of structured settlement payment rights under this


(a) The structured settlement obligor and the annuity issuer shall, as

to all parties except the transferee, be discharged  and  released  from

any and all liability for the transferred payments;

(b)  The  transferee  shall  be  liable  to  the structured settlement

obligor and the annuity issuer:

(i)  if  the  transfer  contravenes  the  terms  of   the   structured

settlement,  for  any taxes incurred by such parties as a consequence of

the transfer; and

(ii) for any other liabilities or costs,  including  reasonable  costs

and  attorneys’  fees,  arising from compliance by such parties with the

order of the court or arising  as  a  consequence  of  the  transferee’s

failure to comply with this title;

(c)  Neither  the annuity issuer nor the structured settlement obligor

may be required to divide any periodic payment between the payee and any

transferee or assignee or between two or more transferees or  assignees;


(d)  Any  further  transfer of structured settlement payment rights by

the payee may be made only after compliance with all of the requirements of this title.


§ 5-1708. General provisions; construction. (a) The provisions of this

title may not be waived by any payee.

(b) Any transfer agreement entered into on or after the effective date

of  this  title  by a payee who resides in this state shall provide that

disputes under such transfer agreement, including  any  claim  that  the

payee  has  breached the agreement, shall be determined in and under the

laws of this state. No  such  transfer  agreement  shall  authorize  the

transferee or any other party to confess judgment or consent to entry of

judgment against the payee.

(c)  No  transfer of structured settlement payment rights shall extend

to any payments that are life-contingent unless, prior to  the  date  on

which  the  payee  signs  the  transfer  agreement,  the  transferee has

established  and  has   agreed   to   maintain   procedures   reasonably

satisfactory to the annuity issuer and the structured settlement obligor

for  (i)  periodically  confirming the payee’s survival, and (ii) giving

the annuity issuer and the structured settlement obligor prompt  written

notice in the even of the payee’s death.

(d)  No payee who proposes to make a transfer of structured settlement

payment rights shall incur any penalty, forfeit any application  fee  or

other  payment,  or  otherwise  incur  any  liability  to  the  proposed

transferee or any assignee based on any  failure  of  such  transfer  to

satisfy the conditions of this title.

(e)  Nothing  contained  in this title shall be construed to authorize

any transfer of structured settlement payment rights in contravention of

any statute or to imply that any transfer  under  a  transfer  agreement

entered  into  prior  to  the  effective  date of this title is valid or


(f) Compliance with the requirements set forth in  section  5-1703  of

this title and fulfillment of the conditions set forth in section 5-1705

of  this  title  shall be solely the responsibility of the transferee in

any transfer of structured settlement payment rights,  and  neither  the

structured  settlement  obligor  nor  the  annuity issuer shall bear any

responsibility for, or any liability arising from,  non-compliance  with

such requirements or failure to fulfill such conditions.

(g)  The  assignee of any transfer agreement or any agreement executed

in connection therewith, shall be subject to all claims and defenses  of

the  payee  against  the transferee arising from such transfer agreement

notwithstanding any agreement to the contrary. Recovery hereunder by the

payee shall not exceed the amount owing to the assignee at the time  the

claim  or  defense is asserted against the assignee. Rights of the payee

under this provision can be asserted affirmatively against  a  claim  by

the assignee.


§  5-1708-a.  Waiver  for  families  of  victims of terrorist attacks.

Notwithstanding the provisions of  section  four  thousand  two  hundred

twenty-four of the insurance law:

(a)  An annuity issuer, or an employee or other representative of such

issuer, shall be permitted to waive or offer to waive the commission  or

other  compensation otherwise payable thereto as a result of the sale of

a policy or contract subject to the provisions of section four  thousand

two  hundred  twenty-four  of  the  insurance  law  to  a  member of the

immediate family of a person who was a victim of the September eleventh,

two thousand one terrorist attacks against the United States; and

(b) In connection with such waiver, the insurance company may, at  the

election of the policyowner or contract owner:

(i)   contribute  the  amount  of  such  waived  commission  or  other

compensation to a charitable organization that meets the requirements of

section 501(c)(3) of the Internal Revenue Code of 1986, as amended,  and

is organized for the benefit of families of victims of such attack; or

(ii) deduct from the premium an amount equal to such waived commission

or other compensation otherwise payable thereto as a result of the sale.

(c)  For  purposes  of  this  section,  the term “victim” shall mean a

decedent who died as a result of wounds or injury incurred as  a  result

of  the terrorist attacks against the World Trade Center or the Pentagon

on September  eleventh,  two  thousand  one,  or  the  terrorist-related

aircraft  crash  in Pennsylvania on such date, but shall not include any

individual identified by the United States attorney general to have been

a participant or conspirator in such attack or a representative of  such

an individual.

(d)  An  issuer  seeking  to  avail  itself  of the provisions of this

section  shall  first  submit  its  plan  of   implementation   to   the

superintendent of insurance for prior approval. If the plan is approved,

such  issuer  shall  thereafter,  upon  request  of such superintendent,

submit a report to such superintendent regarding its experience  in  the

implementation of such provisions.


§ 5-1709. Enforcement. (a) In addition to the other remedies provided,

whenever  there  shall  be a violation of this title, application may be

made by the attorney general in the name of the people of the state of New York to a court of competent jurisdiction by a

special proceeding to issue an injunction, and upon notice to the defendant of not less than five days, to enjoin and restrain the

continuance of such violations; and if it shall appear to the satisfaction of the court or justice that the defendant has, in fact,

violated this title, an injunction may be issued by such court or justice, enjoining and restraining any further violation, without

requiring proof that any person has, in fact, been injured or damaged thereby. In any such proceedings, the court may make

allowances to the attorney general as provided in paragraph six of subdivision (a) of section eighty-three hundred three of the

civil practice law and rules, and direct restitution. Whenever the court shall determine that a violation of this title has occurred,

the court may impose a civil penalty of not more than one thousand dollars for each violation. In connection with any such

proposed application, the attorney general is authorized to take proof and make a determination of the relevant facts and to

issue subpoenas in accordance with the civil practice law and rules. (b) Any payee injured by a violation of this title may bring

an action for the recovery of damages. The court may award reasonable attorney’s fees to the prevailing plaintiff.

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