By AFG Newswire Sept. 14, 2014 11:00 a.m.
What is Meant by “Buyer’s first right of refusal” in Structured Settlement Transfers
This is a clause written in the insurance code around 1999 under “urgency legislation” by Congress in an effort to protect the consumer. Be grateful it is in the code, it protects you, and gives you the freedom to do business with whomever you want.
Before 1999, and for about 20 years, when a person would enter into contract with a Company, for example, Company “A” to sell part of their structured settlement, Company “A” would insert a provision in the contract. That provision stated something to the effect that you couldn’t do business with any other Company other than Company “A” if you wished to sell the rest, or part of your structured settlement payment rights in the future.
You were a financial hostage of Company “A”, the “Buyer”.
After 1999, the enacted California Code of Insurance 10138 (a)(12) states: “Any provision that creates a “buyer’s first right of refusal” to purchase any remaining structured payment rights that the payee may desire to sell in the future…shall make the provision void and unenforceable.”
But there’s more. If you hired an independent professional adviser, they’ll know this too: California is one of the only states that punishes companies that write in clauses like “buyer’s first right of refusal”. If you are dealing with a company that is about to do this, you are about to waste a lot of time.
The judge will catch the mistake. The judge will consider this action by the company “unfair business practice” according to Chapter 5 (beginning with Section 17200 of Part 2 of Division 7 of the Business and Professions Code) and the judge WILL take the time to punish the company with the penalties and other remedies of that chapter.
You’ll be out of a deal, and 30-90 days. Do you really have time like that to waste?
An independent professional adviser that represents you can help protect your time, your money, and your sanity.
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