Vote Smart's Synopsis:

Vote to pass a bill that establishes civil proceeding advance payment transactions relating to state insurance and financial policy.

Highlights:

• Defines “civil proceeding advance payment transaction” or “CPAP transaction” as a transaction between a registered CPAP provider and a “consumer claimant” where the provider provides a funded amount to a claimant to use for any purpose other than prosecuting the claimant’s civil proceeding (Sec. 6).    

• Defines “consumer claimant” as an individual who is or may become a plaintiff, a claimant, or a demandant in a civil proceeding and who is offered or enters into a CPAP transaction with a CPAP provider (Sec. 6).

• Requires an individual to successfully register with the Department of Insurance and execute a surety bond before he or she engages in business as a CPAP provider (Sec. 6). 

• Prohibits a CPAP provider from taking the following actions (Sec. 6):
• From collecting a contract amount of more than 38 percent of the funded amount in a contract; 
• From issuing more than one contract for the same civil proceeding; and
• From using any CPAP contract form other than the form issued by the Department of Insurance, unless department approval is granted.

• Prohibits a CPAP transaction from being classified as a “consumer loan” given to an individual (Secs. 2 & 3).

• Requires a CPAP contract to include a written acknowledgment from the consumer claimant’s attorney in his or her civil proceeding, acknowledging certain items, including, but not limited to, the following (Sec. 6):
• That all costs and charges relating to the CPAP transaction have been disclosed to their client; and
• That the attorney has not and will not receive a referral fee from the CPAP provider.

• Requires a consumer claimant to pay the specified amount in the CPAP contract if he or she prevails in the civil proceeding and the amount is sourced from the proceeds from a resolution of the civil proceeding (Sec. 6).  

Full Bill Text