iii. The present value of the payments to be transferred, computed in the same manner and using the same discount rate by which future annuity payments are discounted to present value for federal estate tax purposes;iv. The gross amount payable by the transferee in exchange for the payments to be transferred;
v. The implied annual interest rate that the transferor would be paying if the transfer were viewed as a loan to the transferor of the net amount payable by the transferee, to be paid in installments corresponding to the transferred payments.
vi. An itemized listing for any amount to be deducted from the gross payment, with detailed explanation of the reason for such deduction and the method for computing the deduction;
vii. The net amount to be paid to the transferee;
viii. The amount and method of calculation of any penalties or liquidated damages for which the transferor might be liable under the transfer agreement; and
ix. A statement of the tax consequences of the transfer.
3. Source of workers' compensation payment rights. The transferee shall provide an authenticated copy of the document(s) that establish the transferor's right to the workers' compensation payment rights that are proposed to be transferred.
4. All agreements between the transferor and transferee. All agreements between the transferor and transferee must be in writing and signed by both the transferor and the transferee. The transferee will provide true and correct copies of all such documents.
C. Notice to other interested parties. After the Adjudication Division has received a petition for approval of transfer of payment rights, and has determined that the petition is complete and is supported by all necessary documentation, the Division will mail copies of the petition and supporting documentation to the following:
1. Each party and attorney who participated in the underlying workers' compensation claim;
2. If the payment right to be transferred arises under a structured workers' compensation settlement, the issuer and owner of the annuity contract that funds the settlement;
3. Any other party having rights or obligations with respect to the payment rights proposed to be transferred;
4. An ombudsman designated by the Industrial Accidents Division for receipt of such petitions; and
5. Any other individual or entity the Division believes may have an interest in the proposed transfer.
D. Hearing. All Petitions for Approval of Transfer of Payment Rights will be assigned to the Director of the Adjudication Division for hearing.
1. The Director will conduct a formal evidentiary hearing on each petition to determine whether the petition should be approved. The hearing will be conducted in accordance with the requirements of the Utah Administrative Procedures Act.
2. No hearing on the merits of a petition will be scheduled prior to 60 days after the notices required by III.C of this rule have been mailed to all parties entitled to such notice.
3. Notice of hearing on the merits of a petition shall be provided to the transferor, the transferee, their attorneys, and all parties listed in III.C.1 through 4 of this rule.
4. The Director will conduct the hearing in such manner as the Director deems proper to obtain all information that may be material to approval or rejection of the proposed transfer.
E. Decision. After hearing, the Director will issue a written decision approving or denying the petition. The Director may approve a petition only if the Director finds:
1. The petition has been submitted in proper form with all required documentation;
2. The notice and explanation required by III.B.1 of this rule and the disclosure of financial information required by III.B.2 of this rule are correct, adequate, and understood by the transferor;
3. The agreement(s) between the transferor and transferee does not include any abusive provisions that are against the transferor's best interests. "Abusive provisions" include, but are not limited to, the following:
a. The transferor's confession of judgment or consent to entry of judgment;
b. Choice of forum or choice of law provisions requiring resolution of disputes in a forum other than the courts and administrative agencies of the State of Utah, or under the laws of a jurisdiction other than Utah; or
c. Requirements that transferors indemnify transferees or reimburse transferees for costs or expenses incurred in disputes between transferors and transferees.
4. The proposed transfer is in the best interest of the transferor, specifically taking into account:
a. The transferor's need for a continuing source of income to provide for future necessities;
b. The needs of the transferor's dependents for a continuing source of support from the transferor to provide for future necessities;
c. Whether the transferor's intended uses of the funds obtained as a result of the transfer are prudent and consistent with the underlying purposes of the workers' compensation system;
d. Whether the transferor possesses the ability to manage, preserve and properly apply the funds to be obtained through the transfer; and
e. Whether other alternatives exist that will better meet the legitimate needs of the transferor and/or satisfy the objectives of the workers' compensation system.
F. Appeal. Any interested party who has participated in the formal evidentiary hearing conducted pursuant to III.D of this rule may request agency review of the Director's decision by following the procedures established in Section 63G-4-301 of the Utah Administrative Procedures Act and Section 34A-1-303 of the Utah Labor Commission Act.
KEY: workers' compensation, administrative procedures, hearings, settlements
