§ 141.003.Required Disclosures to Payee

The disclosure requirement, and its form is specified as tightly as its content.

At least three days before the payee signs, the transferee shall provide a separate disclosure statement, in bold type at least 14 points in size.

Separate, bold, and 14-point are all doing work. A disclosure buried in a contract is read by nobody; the requirements force it onto its own page in type nobody can miss. And the three days give the payee time to consider it away from whoever presented it.

Eight items must be stated, and the sequence walks the payee through the arithmetic: the amounts and due dates of the payments being sold; their aggregate amount; the discounted present value; the gross advance amount; an itemized listing of transfer expenses with the transferee’s best estimate; the net advance amount; any penalties or liquidated damages for breach by the payee; and the right to cancel.

The third item carries a prescribed label. The discounted present value must be identified as the "calculation of current value of the transferred structured settlement payments under federal standards for valuing annuities," with the Applicable Federal Rate used also stated.

That wording exists so the figure cannot be presented as the transferee’s own estimate. It is a federal standard, and the payee is told so.

Putting aggregate amount, present value and gross advance amount together is the point of the whole section. A payee sees what the payments total, what they are worth today by an official measure, and what is being offered — three numbers that make the discount visible.

The eighth item is a cooling-off right: cancellation without penalty or further obligation until the third business day after signing.