North Dakota Code 32-03.4-01 – Definitions
For purposes of this chapter:
Terms Used In North Dakota Code 32-03.4-01
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- children: includes children by birth and by adoption. See North Dakota Code 1-01-18
- Contract: A legal written agreement that becomes binding when signed.
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Defendant: In a civil suit, the person complained against; in a criminal case, the person accused of the crime.
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- following: when used by way of reference to a chapter or other part of a statute means the next preceding or next following chapter or other part. See North Dakota Code 1-01-49
- Individual: means a human being. See North Dakota Code 1-01-49
- Lien: A claim against real or personal property in satisfaction of a debt.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
- State: when applied to the different parts of the United States, includes the District of Columbia and the territories. See North Dakota Code 1-01-49
- Tort: A civil wrong or breach of a duty to another person, as outlined by law. A very common tort is negligent operation of a motor vehicle that results in property damage and personal injury in an automobile accident.
- United States: includes the District of Columbia and the territories. See North Dakota Code 1-01-49
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 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.