 Despite the use of non-assignment clauses in annuity contracts to secure the tax advantages for tort victims, companies cropped up that tried to take advantage of these individuals in ”factoring” transactions, purchasing their periodic payments in return for a deeply discounted lump sump payment.Congress felt that factoring company purchases of structured settlement payments “so directly subvert the Congressional policy underlying structured settlements and raise such serious concerns for the injured victims,” that bills were proposed in both the Senate and the House to penalize companies which engage in such transactions.Before the enactment of IRC 5891, which became effective on July 1, 2002, some states regulated the transfer of structured settlement payment rights, while others did not.