[Federal Register Volume 68, Number 72 (Tuesday, April 15, 2003)]
[Rules and Regulations]
[Pages 18119-18121]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-9021]


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DEPARTMENT OF JUSTICE

28 CFR Part 50

[Docket No. CIV 105; AG Order No. 2667-2003]
RIN 1105-AA82


Minimum Qualifications for Annuity Brokers in Connection With 
Structured Settlements Entered Into by the United States

AGENCY: Department of Justice.

ACTION: Interim rule with request for comments.

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SUMMARY: This rule sets forth the ``minimum qualifications'' an 
individual annuity broker must meet to be included on the list of 
annuity brokers established by the Department of Justice and 
transmitted to all United States Attorneys that will identify brokers 
who may provide services in connection with structured settlements 
entered by the United States. It also sets forth procedures to apply 
for inclusion on the list. Structured settlements allow the Department 
to resolve litigation by purchasing an annuity policy or making a 
series of payments rather than by paying a lump sum.

DATES: Effective date: This interim rule is effective April 15, 2003.
    Comment date: Written comments must be submitted on or before July 
14, 2003.
    Declaration submission date: To be considered for inclusion on the 
initial list to be transmitted to all United States Attorneys, annuity 
brokers must submit the Declaration specified in this rule to the 
Department of Justice's Torts Branch at the address provided below by 
no later than April 24, 2003. Submissions received after April 24, 
2003, will be considered for inclusion in any updates of the list. The 
list will be revised periodically, but not more often than twice every 
calendar year, beginning with calendar year 2004.

ADDRESSES: Comments on the interim rule should be submitted by telefax 
to 202-514-8071. Telefaxes should be limited to 15 pages. Comments may 
also be mailed to Kenneth L. Zwick, Director, Office of Management 
Programs, Civil Division, U.S. Department of Justice, Main Building, 
Room 3140, 950 Pennsylvania Avenue NW., Washington, DC 20530. Comments 
received are public records. The name and address of the commenter 
should be included with all submissions. Comments will also be 
available for public inspection at a reading room in Washington, DC. 
Arrangements to visit the reading room must be made in advance by 
calling 202-514-4552.
    All requests for inclusion on the list of annuity brokers should be 
addressed to Roger D. Einerson, Assistant Director, Torts Branch, Post 
Office Box 888, Benjamin Franklin Station, Washington, DC 20044.

FOR FURTHER INFORMATION CONTACT: Kenneth L. Zwick, Director, Office of 
Management Programs, Civil Division, U.S. Department of Justice, Main 
Building, Room 3140, 950 Pennsylvania Avenue NW., Washington, DC 20530; 
telephone 202-514-4552.

SUPPLEMENTARY INFORMATION: This rule implements section 11015(a) of 
Public Law 107-273, the 21st Century Department of Justice 
Appropriations Authorization Act, which was enacted on November 2, 
2002. Section 11015(a) provides: ``Not later than 6 months after the 
date of enactment of this Act, the Attorney General shall establish a 
list of annuity brokers who meet minimum qualifications for providing 
annuity brokerage services in connection with structured settlements 
entered by the United States. This list shall be updated upon request 
by any annuity broker that meets the minimum qualifications for 
inclusion on the list. The Attorney General shall transmit such list, 
and any updates to such list, to all United States Attorneys.'' The 
rule sets forth the minimum qualifications for an annuity broker to be 
included on the list and the procedures to be followed by individual 
annuity brokers who desire to be listed.
    To be considered for inclusion on the initial list to be 
transmitted to all United States Attorneys, annuity brokers must submit 
the Declaration set forth on the Civil Division Web site (http://www.usdoj.gov/civil/home.html) to the Department of Justice's Torts 
Branch at the address provided below by no later than April 24, 2003. 
(A copy of the Declaration is also included as an appendix to this 
rule, but will not be included in the Code of Federal Regulations, as 
it may be revised later. The most current version of the Declaration 
will be available for download on the Civil Division's Web site.) 
Submissions received after April 24, 2003, will be considered for 
inclusion in the next update of the list. The list will be revised 
periodically, but not more often than twice every calendar year, 
beginning with calendar year 2004.
    An annuity broker submitting a Declaration is declaring under 
penalty of perjury that the information on the Declaration is true, 
correct, accurate, and complete. Among other things, the broker must 
declare: ``I have had substantial experience in each of the past three 
years in providing structured settlement brokerage services to or on 
behalf of defendants or their counsel.'' This provision serves two 
purposes. First, it ensures that the broker has significant, relevant 
experience. Second, it militates against potential conflicts between 
the interests of listed brokers and the interests of the United States 
as a defendant. The remaining requirements set forth in the Declaration 
are self-explanatory. In determining whether an annuity broker meets 
the minimum qualifications for inclusion on the list, the Department of 
Justice will rely solely and exclusively on the Declaration submitted 
by the annuity broker. The Department of Justice will neither verify 
the information submitted to the Department prior to the listing of an 
annuity broker, nor vouch for its accuracy for purposes of establishing 
or updating the list.
    Initial declarations should be mailed to the United States 
Department of Justice, Civil Division, Torts Branch, FTCA Staff, Post 
Office Box 888, Benjamin Franklin Station, Washington, DC 20044. 
Brokers should refer to the Civil Division's Web site (http://www.usdoj.gov/civil/home.html) to determine the current mailing address 
at the time they submit subsequent Declarations.

Executive Order 12866

    This rule has been drafted and reviewed in accordance with 
Executive Order 12866, ``Regulatory Planning and Review'' section 1(b), 
The Principles of Regulation. The Department of Justice has determined 
that this rule is a ``significant regulatory action'' under section 
3(f), Definitions, and accordingly this rule has been reviewed by the 
Office of Management and Budget.
    The Department has also assessed both the costs and benefits of 
this rule as required by section 1(b)(6) and has made a reasoned 
determination that the benefits of this regulation justify its costs. 
The costs considered in this connection included the costs of 
submission of declarations required if an annuity broker desires to 
make services available to United States

[[Page 18120]]

Attorneys in connection with structured settlements entered by the 
United States. Costs considered also included the cost of establishing 
and maintaining a list of brokers and transmitting the lists, including 
updated lists, to United States Attorneys. The benefits of the rule 
clearly outweigh the costs because the costs are the lowest costs 
feasible to comply with the requirement that a list be established as 
required pursuant to section 11015(a) of Public Law 107-273.

Executive Order 13132

    This rule will not have substantial, direct effects on the States, 
on the relationship between the national government and the States, or 
on the distribution of power and responsibilities among the various 
levels of government. Therefore, in accordance with Executive Order 
13132, it is determined that this rule does not have sufficient 
federalism implications to warrant the preparation of a Federalism 
Assessment.

Paperwork Reduction Act

    The information collection requirement contained in this interim 
rule was approved by the Office of Management and Budget on March 24, 
2003 under 5 CFR 1320.13. The information collection requirement 
contained in this rule will be used by brokers to certify they meet the 
minimum qualifications to be listed as an annuity broker pursuant to 
section 11015(a) of Public Law 107-273. The estimated total number of 
respondents is 400 and the amount of time estimated for an average 
respondent to respond is one hour for a total public burden of 400 
hours per year.
    The emergency approval is only valid for 180 days. Comments and 
suggestions concerning the Declaration that is the Appendix to this 
interim rule are encouraged and will be accepted until 60 days after 
the rule is published.

Regulatory Flexibility Act

    The Attorney General, in accordance with the Regulatory Flexibility 
Act (5 U.S.C. 605(b)), certifies that this rule will not have a 
significant economic impact on a substantial number of small entities. 
The cost of completing the declaration that this rule requires will be 
minimal, and the Department does not believe that there will be a 
significant economic impact on any brokers who do not qualify by 
meeting the minimum qualifications set forth in this rule and in the 
declaration because any such brokers would not provide brokerage 
services to United States Attorneys to a significant extent at the 
present time. The listing of a broker might have a marginal economic 
impact on the broker to the extent that the broker is not currently 
soliciting use of brokerage services on the part of United States 
Attorneys. That impact is not expected to be significant for purposes 
of the Regulatory Flexibility Act (5 U.S.C. 605(b)).

Unfunded Mandates Reform Act of 1995

    This rule will not result in the expenditure by State, local, and 
tribal governments, in the aggregate, or by the private sector, of 
$100,000,000 or more in any one year, and it will not significantly or 
uniquely affect small governments. Therefore, no actions were deemed 
necessary under the provisions of the Unfunded Mandates Reform Act of 
1995.

Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is not a major rule as defined by section 251 of the 
Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 
804. This rule will not result in an annual effect on the economy of 
$100,000,000 or more; a major increase in costs or prices; or 
significant adverse effects on competition, employment, investment, 
productivity, innovation, or on the ability of United States-based 
companies to compete with foreign-based companies in domestic and 
export markets.

Administrative Procedure Act, 5 U.S.C. 553

    This rule provides that brokers desiring to be included on a list 
of annuity brokers who meet minimum qualifications shall submit a 
specified declaration.
    The Department has determined that taking the time to draft and 
publish a proposed rule for notice and comment before this rule took 
effect would have been impracticable in light of the short time between 
the enactment of the statute and the deadline for implementation, and 
also would have been contrary to the public interest, which strongly 
favors prompt implementation of the statute. Accordingly, the 
Department has determined that there is ``good cause'' for exempting 
this rule from the provision of the Administrative Procedure Act that 
requires a notice of proposed rulemaking and the opportunity for public 
comment. 5 U.S.C. 553(b)(B). For the same reasons, the Department also 
finds ``good cause'' for exempting this rule from the provision of the 
Administrative Procedure Act providing for a delayed effective date. 5 
U.S.C. 553(d). Delaying the opportunity for brokers to seek to be 
included in the list would be contrary to the public interest.

List of Subjects in 28 CFR Part 50

    Administrative practice and procedure, Annuities, and Brokers.


0
Accordingly, for the reasons set forth in the preamble, part 50 of 
chapter I of Title 28 of the Code of Federal Regulations is amended as 
follows:

PART 50--[AMENDED]

0
1. The authority citation for part 50 is revised to read as follows:

    Authority: 5 U.S.C. 301; 28 U.S.C. 509, 510; 42 U.S.C. 1921 et 
seq., 1973c; and Public Law 107-273, 116 Stat. 1758, 1824.


0
2. A new Sec.  50.24 is added to read as follows:


Sec.  50.24  Annuity broker minimum qualifications.

    (a) Minimum standards. The Civil Division, United States Department 
of Justice, shall establish a list of annuity brokers who meet minimum 
qualifications for providing annuity brokerage services in connection 
with structured settlements entered by the United States. Those 
qualifications are as follows:
    (1) The broker must have a current license issued by at least one 
State, the District of Columbia, or a Territory of the United States as 
a life insurance agent, producer, or broker;
    (2) The broker must have a current license or appointment issued by 
at least one life insurance company to sell its structured settlement 
annuity contracts or to act as a structured settlement consultant or 
broker for the company;
    (3) The broker must be currently covered by an Errors and Omissions 
insurance policy, or an equivalent form of insurance;
    (4) The broker must never have had a license to be a life insurance 
agent, producer, or broker revoked, rescinded, or suspended for any 
reason or for any period of time;
    (5) The broker must not have been convicted of a felony; and
    (6) The broker must have had substantial experience in each of the 
past three years in providing structured settlement brokerage services 
to or on behalf of defendants or their counsel.
    (b) Procedures for inclusion on the list.
    (1) An annuity broker who desires to be included on the list must 
submit a ``Declaration'' that he or she has reviewed the list of 
minimum qualifications set forth in paragraph (a)

[[Page 18121]]

of this section and that he or she meets those minimum qualifications. 
A sample of the Declaration for annuity brokers to submit is available 
from the Civil Division's Web site (http://www.usdoj.gov/civil/home.html) or by written request to the address in this section. These 
minimum qualifications must be continually met for a broker who has 
been included on the list to remain included when the list is updated 
thereafter. The Declaration must be executed under penalty of perjury 
in a manner specified in 28 U.S.C. 1746.
    (2) Each broker must submit a new Declaration annually to be 
included on updated lists. For a broker to be included on the initial 
list to be established by May 1, 2003, the Torts Branch, Civil 
Division, must receive the broker's Declaration no later than April 24, 
2003. If the broker wishes to be included on updated lists, the Torts 
Branch must receive a new Declaration from the broker between January 1 
and April 10 of each successive calendar year. After the Declaration is 
completed and signed, the original must be mailed to the United States 
Department of Justice, Civil Division, FTCA Staff, Post Office Box 888, 
Benjamin Franklin Station, Washington, DC 20044. The Department of 
Justice will not accept a photocopy or facsimile of the Declaration.
    (3) A Declaration will not be accepted by the Department of Justice 
unless it is complete and has been signed by the individual annuity 
broker requesting inclusion on the list. A Declaration that is 
incomplete or has been altered, amended, or changed in any respect from 
the Declaration at the Civil Division's Web site will not be accepted 
by the Department of Justice. Such a Declaration will be returned to 
the annuity broker who submitted it, and the Department of Justice will 
take no further action on the request for inclusion on the list until 
the defect in the Declaration has been cured by the annuity broker.
    (4) The Department of Justice will retain a complete Declaration 
signed and filed by an annuity broker requesting to be on the list. 
Because this rule does not require the submission of any additional 
information, the Department retains discretion to dispose of additional 
information or documentation provided by an annuity broker.
    (5) The Department of Justice will not accept a Declaration 
submitted by an annuity company or by someone on behalf of another 
individual or group of individuals. Each individual annuity broker who 
desires to be included on the list must submit his or her own 
Declaration.
    (6) An annuity broker whose name appears on the list incorrectly 
may submit a written request that his or her name be corrected. An 
annuity broker whose name appears on the list may submit a written 
request that his or her name be removed from the list.
    (7) To the extent practicable, a name correction or deletion will 
appear on the next revision of the list immediately after receipt of 
the written request for a name correction or deletion. A written 
request for a name correction or deletion must be mailed to the United 
States Department of Justice, Civil Division, FTCA Staff, Post Office 
Box 888, Benjamin Franklin Station, Washington, DC 20044. Facsimiles 
will not be accepted.
    (8) The list of annuity brokers established pursuant to this 
section will be updated periodically, but not more often than twice 
every calendar year, beginning in calendar year 2004.
    (c) Disclaimers.
    (1) The inclusion of an annuity broker on the list signifies only 
that the individual declared under penalty of perjury that he or she 
meets the minimum qualifications required by the Attorney General for 
providing annuity brokerage services in connection with structured 
settlements entered into by the United States. Because the decision to 
include an individual annuity broker on the list is based solely and 
exclusively on the Declaration submitted by the annuity broker, the 
appearance of an annuity broker's name on the list does not signify 
that the annuity broker actually meets those minimum qualifications or 
is otherwise competent to provide structured settlement brokerage 
services to the United States. No preferential consideration will be 
given to an annuity broker appearing on the list except to the extent 
that United States Attorneys utilize the list pursuant to section 
11015(b) of Public Law 107-273.
    (2) By submitting a Declaration to the Department of Justice, the 
individual annuity broker agrees that the Declaration and the list each 
may be made public in its entirety, and the annuity broker expressly 
consents to such release and disclosure of the Declaration and list.

    Dated: April 8, 2003.
John Ashcroft,
Attorney General.

Appendix

Declaration

[This Appendix will not appear in the Code of Federal Regulations]

    I, ------------, have carefully reviewed the Department of 
Justice regulation contained in 28 CFR 50.24 and published in the 
Federal Register on April 15, 2003, and I understand the minimum 
qualifications set forth in 28 CFR 50.24. I declare that I meet the 
minimum qualifications for inclusion on the Department of Justice's 
list of annuity brokers. Specifically, I declare each of the 
following to be true, accurate, correct, and complete as of the date 
this Declaration is signed:
    a. I am currently licensed by at least one State, the District 
of Columbia, or a Territory of the United States as a life insurance 
agent, producer, or broker;
    b. I am currently licensed or appointed by at least one life 
insurance company to sell its structured settlement annuity 
contracts or to act as a structured settlement consultant or broker;
    c. I am currently covered by an Errors and Omissions insurance 
policy, or an equivalent form of insurance;
    d. I have never had a license to be a life insurance agent, 
producer, or broker revoked, rescinded, or suspended for any reason 
or for any period of time;
    e. I have never been convicted of a felony; and
    f. I have had substantial experience in each of the past three 
years in providing structured settlement brokerage services to or on 
behalf of defendants or their counsel.
    By submitting this Declaration to the Department of Justice, I 
am agreeing that this Declaration and the list of brokers each may 
be made public in its entirety, and I expressly consent to the 
release and disclosure of the Declaration and the list.
    I declare under penalty of perjury that the foregoing is true, 
accurate, complete, and correct. 28 U.S.C. 1746.
    Executed on this ------ day of ----------, 2 ------.

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(Signature of Individual Broker Making Declaration)

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(Print Full Name of Individual Broker Making Declaration)

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(Street or Post Office Box)

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(City, State, and Zip Code)

    After completing and signing this Declaration, mail the 
Declaration to the United States Department of Justice, Civil 
Division, FTCA Staff, Post Office Box 888, Benjamin Franklin 
Station, Washington, DC 20044.

[FR Doc. 03-9021 Filed 4-14-03; 8:45 am]
BILLING CODE 4410-12-P