|By Abby Simons, Star Tribune (Minneapolis)|
|McClatchy-Tribune Information Services|
"This really is a consumer protection issue," said the legislation's author, Rep.
Widely embraced by insurance companies and the legal community alike, structured settlements are designed to spread out payments to guarantee future income. That way, recipients are less likely to spend the money all at once. Structured settlements have also created a lucrative industry for "secondary market" companies that buy settlements, annuities and lottery winnings at a steep discount. About two dozen large companies nationwide compete for the
The law comes just a few years after a
Griffith's case revealed that the judges required to sign off on such transactions under state law knew nothing about any sales that came before them. Until Dickstein asked for an investigation, he didn't know that Griffith had already sold half of her settlement for a small fraction of its value. Dickstein said Griffith and others like her are the "poster child for why the transfer or structured settlement process may need repair."
Still, the concerns were enough for the
"This is a bill that will help judges do what's right," Dickstein said last week.
Hilstrom said the law will protect all people who sell their structured settlement payments, especially those who could be particularly susceptible to a bum deal.
"A lot of folks are selling these structured settlement payments at difficult times in their life," she said. "In order for the court to reveal whether or not they're being put in a bad situation or whether or not the deal is fair, they need to know the entire history."