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2002 FINAL STATELEGISLATIVE PROGRAM CONTROVERSIAL ISSUE ISSUE: STRUCTURED PAYMENTS SUMMARY: Legislation designed to expand current law to provide for structured payments that would itemize verdicts and annuities for life care and future loss of earnings were considered by the Maryland General Assembly in the mid-1980's. Proponents of the structured payments approach contend that legitimate awards are supposed to care for plaintiffs on a long-term basis, and that lump sum payments do not encourage the victims in disability cases to protect their future well-being. Advocates of structured payments believe that their solution to this problem would provide a stream of income to injured parties while stabilizing the liability insurance market. Opponents of structured payments contend that while structured payments may be useful in certain cases, a mandatory approach would be an improper restriction on judgements where flexibility for investment or income tax purposes may be useful. Mandatory structured payments also would deprive injured parties of the interest payments that may accrue as a result of a lump sum payment, and go instead to insurance companies. There has been little interest since the mid-1980's in pursuing legislation to mandate structured payments, although a bill to allow the State to enter into structured payment arrangements was passed in 1996. In 1999, however, another area of the structured settlement system emerged. A bill that was filed late in the session proposed to curb the practice of transferring structured settlement payment rights unless certain conditions were met by the parties involved in the transfer. The goal of the bill was to protect the interests of the beneficiaries of the structured settlements from those who were seeking to trade quick cash payments that were far below the value of the structured settlement. While the bill died in the 1999 session, it built support for the concept so that when it was reintroduced in 2000 it passed. No structured payment legislation was filed in 2001. MSBA 2002 POSITION: Oppose mandate of structured payments. SAMPLE LEGISLATION:
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