32-03.4-01. Definitions

32-03.4-01. Definitions

For purposes of this chapter:

1. "Annuity issuer" means an insurer that has issued a contract to fund periodic

payments under a structured settlement.

2. "Dependent" includes a payee's spouse and minor children and all other persons for

whom the payee is legally obligated to provide support, including alimony or support.

3. "Discounted present value" means the present value of future payments determined

by discounting those 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.

4. "Gross advance amount" means the sum payable to the payee or for the payee's

account as consideration for a transfer of structured settlement payment rights before

any reductions for transfer expenses or other deductions to be made from such

consideration.

5. "Independent professional advice" means advice of an attorney, certified public

accountant, actuary, or other licensed professional adviser:

a. Who is engaged by a claimant or payee to render advice concerning the legal,

tax, and financial implications of a structured settlement or a transfer of structured

settlement payment rights;

b. Who is not in any manner affiliated with or compensated by the defendant in the

settlement or the transferee of the transfer; and

c. Whose compensation for rendering the advice is not affected by whether a

settlement or transfer occurs or does not occur.

6. "Interested party" means, with respect to any structured settlement, the payee, any

beneficiary irrevocably 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 the structured

settlement.

7. "Net advance amount" means the gross advance amount less the aggregate amount

of the actual and estimated transfer expenses required to be disclosed under

subsection 5 of section 32-03.4-02.

8. "Payee" means an individual who is receiving tax-free payments under a structured

settlement and proposes to make a transfer of payment rights under the structured

settlement.

9. "Periodic payments" includes both recurring payments and scheduled future lump sum

payments.

10. "Qualified assignment agreement" means an agreement providing for a qualified

assignment within the meaning of section 130 of the Internal Revenue Code

[26 U.S.C. 130], as amended.

11. "Settled claim" means the original tort claim or workers' compensation claim resolved

by a structured settlement.

12. "Structured settlement" means an arrangement for periodic payment of damages for

personal injuries or sickness established by settlement or judgment in resolution of a

tort claim or for periodic payments in settlement of a workers' compensation claim.

13. "Structured settlement agreement" means the agreement, judgment, stipulation, or

release embodying the terms of a structured settlement.

14. "Structured settlement obligor" means, with respect to any structured settlement, the

party that has the continuing obligation to make periodic payments to the payee under

a structured settlement agreement or a qualified assignment agreement.

15. "Structured settlement payment rights" means rights to receive periodic payments

under a structured settlement, whether from the structured settlement obligor or the

annuity issuer, if at least one of the following applies:

a. The payee is domiciled in, or the domicile or principal place of business of the

structured settlement obligor or the annuity issuer is located in, this state;

b. The structured settlement agreement was approved by a court in this state; or

c. The structured settlement agreement is expressly governed by the laws of this

state.

16. "Terms of the structured settlement" includes, with respect to any structured

miciled in, or the domicile or principal place of business of the

structured settlement obligor or the annuity issuer is located in, this state;

b. The structured settlement agreement was approved by a court in this state; or

c. The structured settlement agreement is expressly governed by the laws of this

state.

16. "Terms of the structured settlement" includes, with respect to any structured

settlement, the terms of the structured settlement agreement, the annuity contract, any

qualified assignment agreement, and any order or other approval of any court or other

governmental authority that authorized or approved such structured settlement.

17. "Transfer" means any sale, assignment, pledge, hypothecation, or other alienation or

encumbrance of structured settlement payment rights made by a payee for

consideration. The term does not include the creation or perfection of a security

interest in structured settlement payment rights under a blanket security agreement

entered with an insured depository institution, in the absence of any action to redirect

the structured settlement payments to the insured depository institution, or an agent or

successor in interest thereof, or otherwise to enforce the blanket security interest

against the structured settlement payment rights.

18. "Transfer agreement" means the agreement that provides for a transfer of structured

settlement payment rights.

19. "Transfer expenses" means all expenses of a transfer which are required under the

transfer agreement to be paid by the payee or deducted from the gross advance

amount, including court filing fees, attorney's fees, escrow fees, lien recordation fees,

judgment and lien search fees, finder's fees, commissions, and other payments to a

broker or other intermediary. The term does not include pre-existing obligations of the

payee payable for the payee's account from the proceeds of a transfer.

20. "Transferee" means a party acquiring or proposing to acquire structured settlement

payment rights through a transfer.