The following words, terms and phrases, when used in this chapter, shall have the meanings ascribed to them, except where the context clearly indicates a different meaning:
(1) “Annuity issuer” shall mean an insurer that has issued an insurance contract used to fund periodic payments under a structured settlement;
(2) “Applicable law” shall mean:
a. The federal laws of the United States;
b. The laws of this State, including principles of equity applied in the courts of this State; and
c. The laws of any other jurisdiction:
1. Which is the domicile of the payee or any other interested party;
2. Under whose laws a structured settlement agreement was approved by a court; or
3. In whose courts a settled claim was pending when the parties entered into a structured settlement agreement;
(3) “Dependents” shall include a payee’s spouse and minor children and all other family members and other persons for whom the payee is legally obligated to provide support, including alimony;
(4) “Discounted present value” shall mean the fair present value of future payments, as determined by discounting such payments to the present using the most recently published applicable federal rate for determining the present value of an annuity, as issued by the United States Internal Revenue Service;
(5) “Favorable tax determination” shall mean, with respect to a proposed transfer of structured settlement payment rights, any of the following authorities that definitively establishes that the federal income tax treatment of the structured settlement for the parties to the structured settlement agreement and any qualified assignment agreement, other than the payee, will not be affected by such transfer:
a. A provision of the United States Internal Revenue Code, United States Code Title 26 [26 U.S.C. § 130], as amended from time to time, or a United States Treasury regulation adopted pursuant thereto;
b. A revenue ruling or revenue procedure issued by the United States Internal Revenue Service;
c. A private letter ruling by the United States Internal Revenue Service with respect to such transfer;
d. A decision of the United States Supreme Court or a decision of a lower federal court in which the United States Internal Revenue Service has acquiesced;
(6) “Federal hardship standard” shall mean a federal standard applicable to transfers of structured settlement payment rights based on findings of a court or responsible administrative authority regarding the payees’ needs, as contained in the United States Internal Revenue Code, United States Code Title 26, as amended from time to time, or in a United States Treasury regulation adopted pursuant thereto;
(7) “Independent professional advice” shall mean the advice of an attorney, certified public accountant, actuary or other licensed professional adviser:
a. Who is engaged by a payee to render advice concerning the legal, tax and financial implications of a transfer of structured settlement payment rights;
b. Who is not in any manner affiliated with or compensated by the transferee of such transfer; and
c. Whose compensation for rendering such advice is not affected by whether a transfer occurs or does not occur.
(8) “Interested parties” shall mean, with respect to any structured settlement, the payee, any beneficiary designated under the annuity contract to receive payments following the payee’s death, the annuity issuer, the structured settlement obligor, and any other party that has continuing rights or obligations under such structured settlement;
(9) “Payee” shall mean an individual who is receiving tax-free damage payments under a structured settlement and proposes to make a transfer of payment rights thereunder;
(10) “Qualified assignment agreement” shall mean an agreement providing for a qualified assignment within the meaning of § 130 of the United States Internal Revenue Code, United States Code Title 26 (26 U.S.C. § 130), as amended from time to time;
(11) “Responsible administrative authority” shall mean, with respect to a structured settlement, any government authority vested by law with exclusive jurisdiction over the settled claim resolved by such structured settlement;
(12) “Settled claim” shall mean the original tort claim or workers’ compensation claim resolved by a structured settlement;
(13) “Structured settlement” shall mean an arrangement for periodic payment of damages for personal injuries established by settlement or judgment in resolution of a tort claim or for periodic payments in settlement of a workers’ compensation claim;
(14) “Structured settlement agreement” shall mean the agreement, judgment, stipulation or release embodying the terms of a structured settlement, including the rights of the payee to receive periodic payments;
(15) “Structured settlement obligor” shall mean, with respect to any structured settlement, the party that has the continuing periodic payment obligation to the payee under a structured settlement agreement or a qualified assignment agreement;
(16) “Structured settlement payment rights” shall mean rights to receive periodic payments (including lump sum payments) under a structured settlement, whether from the settlement obligor or the annuity issuer, where:
a. The payee, the settlement obligor, the annuity issuer, or any other interested party is domiciled in this State;
b. The structured settlement agreement was approved by a court or responsible administrative authority in this State; or
c. The settled claim was pending before the courts of this State when the parties entered into the structured settlement agreement;
(17) “Terms of the structured settlement” shall include, with respect to any structured settlement, the terms of the structured settlement agreement, the annuity contract, any qualified assignment agreement and any order or approval of any court or responsible administrative authority or other government authority authorizing or approving such structured settlement;
(18) “Transfer” shall mean any sale, assignment, pledge, hypothecation or other form of alienation or encumbrance made by a payee for consideration;
(19) “Transfer agreement” shall mean the agreement providing for transfer of structured settlement payment rights from a payee to a transferee; and
(20) “Transferee” or “payor” shall mean the person, firm or entity purchasing or receiving the assignment, pledge, hypothecation or other form of alienation or encumbrance made by a payee for consideration under a structured settlement agreement.