Sell Structured Settlement Knowledge Assessment

Question 1

What does IRC Section 5891 impose on factoring companies that purchase structured settlement payments without court approval?

A 40% excise tax on the transfer amount A 25% penalty on the discount rate applied A criminal fine of up to $50,000 Revocation of their business license

Correct Answer:

A 40% excise tax on the transfer amount

Question 2

What is the primary purpose of state Structured Settlement Protection Acts (SSPAs)?

To set maximum discount rates for all transfers To protect sellers by requiring court approval and full financial disclosure To prohibit the sale of structured settlements entirely To regulate the investment activities of annuity issuers

Correct Answer:

To protect sellers by requiring court approval and full financial disclosure

Question 3

Which of the following disclosures must factoring companies typically provide to sellers under state SSPAs?

The company's annual profit margins on similar deals The present value of the payments being sold and the net amount offered The identity of all investors who will fund the purchase The factoring company's credit rating

Correct Answer:

The present value of the payments being sold and the net amount offered

Question 4

What is a 'cooling-off period' in the context of structured settlement sales?

The time a court takes to schedule a transfer review hearing A window of time after signing during which the seller may cancel the agreement without penalty The delay between court approval and the seller's receipt of funds The period a factoring company has to secure an investor

Correct Answer:

A window of time after signing during which the seller may cancel the agreement without penalty

Question 5

What must a court find before approving a structured settlement transfer under most SSPAs?

That the transfer financially benefits the factoring company's investors That the transfer is in the best interest of the payee and their dependents That the annuity issuer has given written consent to the transfer That the original tort defendant has been personally notified

Correct Answer:

That the transfer is in the best interest of the payee and their dependents

Exam overview

About this Exam

Prepare with the Sell Structured Settlement Knowledge Assessment practice quiz. This question bank includes 60 questions covering structured, settlement, payments, payee, and transfer. Use it to review important concepts, identify knowledge gaps, and build confidence for the related exam, course, or assessment.

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Sell Structured Settlement Knowledge Assessment

This practice set contains 60 questions from the matching question bank and focuses on structured, settlement, payments, payee, and transfer. Work through each question carefully, review the provided solutions, and revisit topics that need more study before your next attempt.

This is an independent study resource intended for practice and review; it is not an official examination or an endorsement by any organization named in the title.

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Sell Structured Settlement Knowledge Assessment

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