As used in this article the following words and terms shall have the following meanings:

(1) ANNUITY ISSUER. An insurer that has issued a contract to fund periodic payments under a structured settlement.

Terms Used In Alabama Code 6-11-51

  • 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
  • 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.
  • Escrow: Money given to a third party to be held for payment until certain conditions are met.
  • following: means next after. See Alabama Code 1-1-1
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • 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 several territories of the United States. See Alabama Code 1-1-1
  • 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 territories thereof and the District of Columbia. See Alabama Code 1-1-1
(2) DEPENDENTS. A payee’s spouse and minor children and all other persons for whom the payee is legally obligated to provide support, including alimony.
(3) DISCOUNTED PRESENT VALUE. The present value of future payments determined by discounting the 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. 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 the consideration.
(5) INDEPENDENT PROFESSIONAL ADVICE. Advice of an attorney, certified public accountant, actuary, or other licensed professional adviser.
(6) INTERESTED PARTIES. 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 such structured settlement.
(7) NET ADVANCE AMOUNT. The gross advance amount less the aggregate amount of the actual and estimated transfer expenses required to be disclosed under subdivision (5) of Section 6-11-52.
(8) PAYEE. An individual who is receiving tax free payments under a structured settlement and proposes to make a transfer of payment rights thereunder.
(9) PERIODIC PAYMENTS. Includes both recurring payments and scheduled future lump sum payments.
(10) QUALIFIED ASSIGNMENT AGREEMENT. An agreement providing for a qualified assignment within the meaning of Section 130 of the United States Internal Revenue Code, United States Code Title 26, as amended from time to time.
(11) RESPONSIBLE ADMINISTRATIVE AUTHORITY. 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. The original tort claim resolved by a structured settlement.
(13) STRUCTURED SETTLEMENT. An arrangement for periodic payment of damages for personal injuries or sickness established by settlement or judgment in resolution of a tort claim.
(14) STRUCTURED SETTLEMENT AGREEMENT. The agreement, judgment, stipulation, or release embodying the terms of a structured settlement.
(15) STRUCTURED SETTLEMENT OBLIGOR. 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.
(16) STRUCTURED SETTLEMENT PAYMENT RIGHTS. Rights to receive periodic payments under a structured settlement, whether from the structured settlement obligor or the annuity issuer, where:

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 or responsible administrative authority in this state.
c. The structured settlement agreement is expressly governed by the laws of this state.
(17) TERMS OF THE STRUCTURED SETTLEMENT. 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 other approval of any court or responsible administrative authority or other government authority that authorized or approved the structured settlement.
(18) TRANSFER. Any sale, assignment, pledge, hypothecation, or other alienation or encumbrance of structured settlement payment rights made by a payee for consideration; provided that the term does not include the creation or perfection of a security interest in structured settlement payment rights under a security agreement entered into with a bank or other insured depository institution or a subsidiary or affiliate of a bank or other insured depository institution (secured party) until and unless the secured party redirects the structured settlement payments to such secured party, or an agent or successor in interest thereof, or otherwise enforces the security interest against the structured settlement payment rights.
(19) TRANSFER AGREEMENT. The agreement providing for a transfer of structured settlement payment rights.
(20) TRANSFEREE. A party acquiring or proposing to acquire structured settlement payment rights through a transfer; provided that the term does not include a secured party who has not received a transfer of the structured settlement payment rights as the term “transfer” is defined in subdivision (18).
(21) TRANSFER EXPENSES. All expenses of a transfer that are required under the transfer agreement to be paid by the payee or deducted from the gross advance amount, including, without limitation, court filing fees, attorneys’ fees, escrow fees, lien recordation fees, judgment and lien search fees, finders’ fees, commissions, and other payments to a broker or other intermediary. The term does not include preexisting obligations of the payee payable for the payee’s account from the proceeds of a transfer.
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