HB 1205 Summary

• Defines "civil proceeding advance payment transactions" (CPAP transactions) as nonrecourse transactions where a CPAP provider gives a consumer claimant funds that must be repaid only if the claimant prevails, with repayment sourced from civil proceeding proceeds.

• Requires CPAP providers to register with the Department of Insurance and establishes registration requirements including character and fitness evaluation, surety bond (up to $50,000), and biennial renewal.

• Sets contract requirements including complete disclosure of all amounts, charges, funding dates, and a 5-day rescission period; requires attorney acknowledgment if claimant is represented, confirming no referral fees and proper handling of proceeds.

• Limits contract amounts to maximum 38% of funded amount and prohibits CPAP providers from paying referral fees to professionals, structuring multiple transactions to avoid limits, or making decisions about the civil proceeding.

• Specifies that CPAP transactions are not consumer loans and violations constitute unfair and deceptive insurance practices subject to penalties under IC 27-4-1.