New Pennsylvania Rule 229.2

The Pennsylvania Supreme Court has promulgated a new state Rule of Civil Procedure 229.2 (New Rule 229.2) setting additional requirements under Pennsylvania's Structured Settlement Protection Act which was enacted in 2000. 

New Rule 229.2 is titled "Petition to Transfer Structured Settlement Payment Rights". 

According to the New Rule 229.2 statement issued by R. Stanton Wettick, Jr., an Allegheny County Judge who serves as Chairman of the Pennsylvania Civil Procedural Rules Committee: "New Rule 229.2 is intended to provide the additional information necessary for a trial court to determine whether a petition to transfer structured settlement payment rights meets the best interest standard".

Highlights of New Rule 229.2:

• The transfer petition must be filed in the county where the payee (original recipient) is domiciled.

• Both the payee and the transferee (factoring company) are parties to the petition.

• The transfer petition must be "verified" by the transferee and include:
  • Payment provisions and payment rights the payee wants to transfer;
  • Net amount payable;
  • Effective interest rate;
  • 4 attachments - in addition to any other documents required to support the findings:
    • Payee's Affidavit in Support of Petition - This affidavit requires information about the payee's income, dependents, prior transfers, and intended use of funds.
      
    • Initial Order of Court - In this order, the judge provides an initial review and either:
      • Sets a hearing date for the transfer petition; or
      • Denies the petition without a hearing in which case:
        • The judge must state reasons for the denial; and
        • The payee may file an amended petition.         
          
    • Certification by transferee attorney "representing to the best of his or her knowledge, information and belief, formed after reasonable inquiry, that the transfer will comply with the requirements of the Act and will not contravene any other applicable federal or state statute or regulation or order of any court or administrative authority."
    • A Final Order Granting the Petition
• The transferee is required to give notice for final hearing date to:
  
  • Payees
  • Structured settlement obligor
  • Annuity issuer
  • Payee's spouse
  • Any person who receives alimony or child support from the payee

The initial reactions from industry experts to New Rule 229.2 generally have been positive.  The primary criticism from factoring companies appears to be that New Rule 229.2 does not require a hearing in every case.

For additional information about state protection laws, see Section 16.04 ("Structured Settlement Protections Acts") in "Structured Settlements and Periodic Payment Judgments".