Structured settlements reform bill passes Va. House
|
Version 0 of 1. RICHMOND — The Virginia House of Delegates on Wednesday unanimously passed a bill intended to reform an industry that critics say has made millions of dollars off people in financial distress. The measure, which was filed by Terry G. Kilgore (R-Scott), proposes a raft of changes to laws governing the sales of structured settlements. “I think it’s going to provide some consumer protection for those individuals who do want to sell their structured settlement,” said Kilgore, who proposed the changes about a month before a Washington Post investigation highlighted troubling practices by some companies. A similar bill filed by Sen. William Stanley (R-Franklin) could get a vote on the Senate floor later this week. The industry offers cash upfront to people in exchange for money bound up in structured settlements. Lawyers often recommend the arrangements, in which cash from lawsuits is dispensed in installments over years, to protect vulnerable people from spending a large payout at once. Virginia is one of 49 states that require county courts to determine whether a settlement-purchase deal is in the seller’s best interest. But industry experts say there are weaknesses in state law: Structured-settlement recipients who want to sell their payments are not obligated to attend hearings, and companies can file their deals anywhere in the state. Kilgore and Stanley’s bills would require cases to be filed and heard in the jurisdiction where the seller lives, and require the seller to appear in person at the hearing. The bill says a purchase application must include a summary of prior transfers as well as notice of the hearing. “The judge no longer becomes a rubber stamp,” Stanley said. “It prevents bad things from happening. And it stops this kind of puppy mill we’ve got going on here on the Eastern Shore for structured settlements.” The Post story drew attention to the Portsmouth Circuit Court and Del. Stephen E. Heretick (D-Portsmouth), who have filed thousands of structured settlement cases — far more than anywhere else in the state — at the courthouse, where almost all of them have been approved. Heretick previously said he would abstain from voting on Kilgore’s bill, but on Wednesday he voted ‘yes’ after seeking advice from the state Ethics Council. “It was a bill that was created by, among others, the trade organization that includes many of my clients,” he said. The National Association of Structured Settlement Purchasers, which worked with Kilgore on the Virginia bill, has agreed to similar reforms in Illinois and Wisconsin and bills are pending in additional states. |