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December 21, 2024 Clear | 20°F
The 193rd General Court of the Commonwealth of Massachusetts

Section 1: Definitions

Section 1. For the purposes of this chapter the following words shall have the following meanings unless the context otherwise requires:

''Annuity issuer'', an insurer that has issued an annuity contract to be used to fund periodic payments under a structured settlement.

''Applicable law'', any of the following, as applicable in interpreting the terms of a structured settlement:

(1) the laws of the United States;

(2) the laws of the commonwealth, including principles of equity applied in the courts of the commonwealth; and

(3) the laws of any other jurisdiction; (i) that is the domicile of the payee or any other interested party; (ii) under whose law a structured settlement agreement was approved by a court or responsible administrative authority; or (iii) in whose courts a settled claim was pending when the parties entered into a structured settlement agreement.

''Applicable federal rate'', the most recently published applicable rate for determining the present value of an annuity, as issued by the United States Internal Revenue Service pursuant to section 7520 of the United States Internal Revenue Code.

''Assignee'', a party that acquires structured settlement payment rights directly or indirectly from a transferee of such rights.

''Dependents'', a payee's spouse and minor children and all other family members and other persons from whom the payee is legally obligated to provide support, including spousal maintenance.

''Discount/finance charge'', the sum of all charges payable directly or indirectly from assigned structured settlement payments and imposed directly or indirectly by the transferee as an incident to a transfer of structured settlement payment rights, including:

(1) interest charges, discounts and other compensation for the time value of money;

(2) all application, origination, processing, underwriting, closing, filing and notary fees and all similar charges, however denominated; and

(3) all charges for commissions or brokerage, irrespective of the identity of the party to whom such charges are paid or payable.

The term discount/finance charge shall not include any fee or other obligation incurred by a payee in obtaining independent professional advice concerning a transfer of structured settlement payment rights.

''Discounted present value'', with respect to a proposed transfer of structured settlement payment rights, the fair present value of future payments, as determined by discounting the payments to the present using the most recently published applicable federal rate as the discount rate.

''Independent professional advice'', advice of an attorney, certified public accountant, actuary, or other licensed professional advisor:

(1) who is engaged by a payee to render advice concerning the legal, tax and financial implications of a transfer of structured settlement payment rights;

(2) who is not in any manner affiliated with or compensated by the transferee of the transfer; and

(3) whose compensation for providing the advice is not affected by whether or not a transfer occurs.

''Interested party'', with respect to any structured settlement, the following:

(1) the payee;

(2) a beneficiary irrevocably designated under the annuity contract to receive payments following the payee's death or, if such designated beneficiary is a minor, the designated beneficiary's parent or guardian;

(3) the annuity issuer;

(4) the structured settlement obligor; and

(5) any other party that has continuing rights or obligations under the structured settlement.

''Payee'', an individual who is receiving tax free damage payments under a structured settlement and proposes to make a transfer of payment rights under the structured settlement.

''Qualified assignment agreement'', an agreement providing for a qualified assignment as provided by the United States Internal Revenue Code, Title 26, section 130.

''Responsible administrative authority'', with respect to a structured settlement, a government authority vested by law with exclusive jurisdiction over the settled claim resolved by the structured settlement.

''Settled claim'', the original tort claim or workers' compensation claim resolved by a structured settlement.

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

''Structured settlement agreement'', the agreement, judgment, stipulation, or release embodying the terms of a structured settlement, including the rights of the payee to receive periodic payments.

''Structured settlement obligor'', the party that has the obligation to make continuing periodic payments to the payee under a structured settlement agreement or a qualified assignment agreement.

''Structured settlement payment rights'', rights to receive periodic payments, including lump sum payment under a structured settlement, whether from the settlement obligor or the annuity issuer, where:

(1) the payee or any other interested party is domiciled in the state;

(2) the structured settlement agreement was approved by a court or responsible administrative authority in the commonwealth; or

(3) the settled claim was pending before a court of the commonwealth when the parties entered into the structured settlement agreement.

''Terms of the structured settlement'', the terms of the structured settlement agreement, the annuity contract, a qualified assignment agreement and an order or approval of a court, responsible administrative authority or other government authority authorizing or approving the structured settlement.

''Transfer'', a sale, assignment, pledge, hypothecation, or other form of alienation or encumbrance made by a payee for consideration.

''Transfer agreement'', the agreement providing for transfer of structured settlement payment rights from a payee to a transferee.

''Transferee'', a person who is receiving or will receive structured settlement payment rights resulting from a transfer.