by Structured Settlement Watchdog®
Structured settlement factoring transactions in Illinois will now be subject to more stringent requirements under amendments to the Illinois Structured Settlement Protection Act signed into law on August 5, 2015.
Illinois SB 1268 was jointly promoted by the National Structured Settlements Trade Association (NSSTA) and the National Association of Settlement Purchasers (NASP).
Highlights of the amendments are as follows:
- Requirement that any SSPA application involving an Illinois payee be brought in the county where the payee lives - thus preventing factoring companies from engaging in forum-shopping in Illinois.
- Requirement that Illinois courts hold hearings on SSPA applications and require that payees appear at those hearings unless they are excused for cause.
- Require that every SSPA application in Illinois include information about prior factoring transactions and attempted factoring transactions involving the same payee.
- Address the confusion that arose from the 2013 decision of the Illinois Court of Appeals in Settlement Funding v. Brenston, by confirming that the presence of anti-assignment provisions in structured settlement documents, such as the Settlement Agreement and Release, does not preclude an Illinois court from hearing a factoring application involving payment rights under that settlement
These changes are designed to help structured settlement annuitants and the Illinois state judges who must review their petition under the law and determine whether selling structured settlement payments is in the annuitant's best interest. Several legal cases around the country have raised serious questions about whether structured settlement protection acts are sufficient to protect annuitants from predatory business practices of structured settlement buyers.
The amendments to the Illinois Structured Settlement Protection Act are a positive step, one which sustains an option for Illinois residents in need of liquidity and have no other viable alternative than to sell their structured settlement. But the lack of licensing requirements, rules for solicitation and a regulator with authority to fine or suspend violators, means there is no control over how consumers and investors in structured settlements are solicited in Illinois.
SSPA = structured settlement protection act