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October 29, 2016

Structured Settlement Factoring Companies in MD Must Have Surety Bond As of October 1, 2016

 by Structured Settlement Watchdog®

The State of Maryland has applied the chastity belt of structured settlement protections including mandatory registration and a surety bond requirement that went into effect October 1, 2016.

Nakedgunh
Maryland Has Enacted The Chastity Belt of Structured Settlement Protection Acts. 

Maryland Structured Settlement Protection Act Requirements

To ensure that the type of cases like Access Funding are avoided in the future and companies are discouraged from engaging in deceptive and dishonest practices, the Maryland SSPA includes strict provisions that regulate the transfer of structured settlements.

This includes:

  • A requirement for transferees to provide payees with a disclosure statement
  • A requirement for transfers of structured settlement rights to be filed in a court located in the county where the payee lives
  • A requirement for transferees to become registered with the Attorney General and prohibiting them from filing a petition for a transfer unless registered
  • The Bill also establishes registration requirements, such as a $2,000 registration fee – $1,500 of which are returned if the application for registration is denied.
  • A requirement for transferees to file a $100,000 surety bond with the Attorney General
  • A right of the Attorney General to suspend or revoke registrations of transferees as well as to impose penalties in certain cases

With a surety bond agreement, if the bonded structured settlement factoring company engages in fraudulent or deceptive practices, payees/obligees have the right to file a claim against the surety bond and receive compensation up to the full sum of the bond – $100,000. In return for extending compensation to payees/obligees, the surety bond company has to be repaid by the bonded company for its financial backing.

In my white paper on the Structured Settlement Secondary Market published in 2015 as well as dozens of blog posts over 11 years, I have espoused the need for a regulator with the power to fine, suspend or revoke the registration of companies engaging in fraudulent of deceptive practices. Now, at least in one state, there is one. A recent meeting in Arizona of the National Association of Attorneys General, a representative of the Maryland AG's office appeared on a panel discussing developments in regulation,  along with representatives of the National Association of settlement Purchasers and the National Structured Settlements Trade Association.

 

Posted at 12:39 AM in Baltimore Structured Settlements, Bethesda Structured Settlements, Chevy Chase Structured Settlements, Factoring Company Bad Business Practices, Mt. Airy Structured Settlements, National Association of Settlement Purchasers (NASP), National Structured Settlement Trade Association, Owings Mills Structured Settlements, Structured Settlement Factoring, Structured Settlement Factoring News, Structured Settlement Transfers, Structured Settlement Watchdog® |

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Guide to Structured Settlements 2022

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  • Structured Attorney Fees for Tax Deferral for Contingency Fees
    Structured attorney fees is a financial strategy that offers a unique way to defer taxes for lawyers and law firms. Lawyers CAN structure their legal fees even if the plaintiff doesn't structure their settlement. There are multiple ways to structure your attorney fees, such as the an index linked structured settlement where payments are adjusted based on upside changes in the S&P 500 with no downside and a cap of 5%. Trial Lawyers may also use a special deferred pay/deferred compensation arrangement, if market based returns returns are desired with no cap. Plan NOW for year end! Put structured attorney fee expert John Darer® on your settlement planning team.
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  • What Are Structured Settlement Annuities?
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  • History of Structured Settlements
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  • What Are Market Based Structured Settlements?
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  • STRUCTURED SETTLEMENTS 4REAL® Blog Is a Popular Source of Structured Settlement News and Information, Settlement Planning News, Tax Deferral and Deferred Income Planning Solutions,
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Structured Settlement Best Practices Corner

  • New York Insurance Advertising law requires the full name of the Insurer to be listed along with the city and state of the principal office. Stating that you represent these fine companies using Insurance company logos without the preceding information are also illegal
  • When it comes to settlement documents it is the ultimate responsibility of the lawyers or claims adjusters who receive input concerning the structured settlement aspects of the documents to actually read the entire document, exercise independent thought and advise their clients properly
  • Be aware that financial advisors use of testimonials is prohibited or restricted
  • Most states require that Testimonials represent the CURRENT opinion of the person who made the testimonial. Be prepared to back it up.
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