What happened: A New Jersey bill would require structured settlement purchase companies to register with the state, post a $50,000 bond, and follow 14 new conduct rules.
Who’s involved: New Jersey Assembly; structured settlement purchase companies; annuity issuers and settlement obligors statewide.
What’s at stake: $50,000 bond per company, $10,000 fines for non-compliance, and potential loss of qualified-order status under federal tax law for unapproved transfers.
Why it matters: Claims professionals and annuity issuers would face a fundamentally different transfer-approval process, with longer timelines and expanded court scrutiny.
Where it stands: Introduced on October 19, 2026. Not enacted.
New Jersey wants to stop structured settlement purchase companies from sliding mail that looks like a check into a claimant’s letterbox.
Assembly Bill 5695, introduced on October 19, 2026 by Assemblyman Vincent M. Kearney of District 21, would rewrite the state’s Structured Settlement Protection Act with tighter disclosures, a new registration regime, and 14 prohibited practices aimed squarely at the secondary market for settlement payments.
Under current law, a company buying future settlement payments from an injury claimant must hand over disclosures just three days before the payee signs a transfer agreement. The bill would triple that window to 10 days and add new items to the disclosure list, including the effective annual interest rate and a notice that the payee has the right to independent professional advice and to shop competing offers. Companies would be barred from steering payees toward any specific adviser.
Courts would also get a longer checklist before approving a transfer. Judges would have to weigh the payee’s age, mental capacity, maturity, understanding of the deal, history of prior transfers, and whether losing the payments would affect eligibility for public benefits. For transfers involving minors or payees with a mental or cognitive impairment, a court-appointed guardian ad litem would be required.
The conduct rules are specific. Purchase companies would be prohibited from coercing or bribing payees, soliciting through documents that resemble a check, locking payees into first-option clauses on remaining payments, contacting payees before 8 a.m. or after 9 p.m., and continuing to call after a payee tells them to stop.
On the compliance side, every company operating in New Jersey would need to register annually with the Commissioner of Banking and Insurance, post a $50,000 surety or cash bond, and pay a $1,250 initial fee or $200 for renewals. Failure to register could trigger a $10,000 administrative fine, and any transfer order signed for an unregistered company would not count as a qualified order under 26 U.S.C. §5891.
Courts finding a violation could revoke or suspend a company’s registration or bar it from filing new transfer proceedings statewide.
The main disclosure and court-approval provisions would take effect January 1, 2027. Registration and bonding requirements would kick in a year later, on January 1, 2028.
For claims teams and annuity issuers managing structured settlement portfolios, the bill would change who can pursue a transfer and how much scrutiny each one gets.
Assembly Bill 5695 has been introduced. None of its provisions have been enacted.
