5-1702
The section of the New York State General Obligations Law which sets forth certain required disclosures to be made by Defendant or Defendant's counsel when a structured settlement is created. Part of New York's Structured Settlement Protection Act.

5-1703
The section of the New York State Obligations Law which sets forth required disclosures to be made by a factoring company, or purchaser of structured settlement payment rights, prior to entering into a structured settlement factoring transaction. Part of New York's Structured Settlement Protection Act.

50A
Article 50A of New York's Civil Practice Law Rules (CPLR) deals with periodic payment of damages on medical, dental and podiatric malpractice cases.

50A50B
New York's Periodic Payment of Judgment statutes. Article 50A of the Civil Practice Law Rules (CPLR) deals with periodic payment of damages on medical, dental and podiatric malpractice cases. Article 50B of the CPLR deals with payment of damages on personal injury, injury to property and wrongful death actions.

50B
Article 50B of the New York's Civil Practice Law Rules ( CPLR ) deals with payment of damages on personal injury, injury to property and wrongful death actions.

529 Prepaid Plans
A tuition plan in which a payment is made now or over time at today's lower tuition rates, with the program then paying future higher tuition costs. Generally only available at state-owned colleges or universities.

529 Savings Plans
An account that allows money to be saved today and to grow tax-free if used for higher education. Each 529 Savings Plan must be sponsored by an individual state, and each state may provide some state tax benefits for state residents.

ADL

See Also: Activities of Daily Living  

AGI

See Also: Adjusted Gross Income (AGI)  

AHLBORN DECISION
A landmark decision for plaintiff's rights by the United States Supreme Court on May 1, 2006, in which the Supreme Court unanimously affirmed the Eighth Circuit’s decision in Arkansas Dep’t of Health & Human Servs. v. Ahlborn, _U.S. _, 126 S. Ct. 1752 (2006). With this decision, a state’s Medicaid department is limited to reimbursement from only that portion of a judgment or settlement that represents payment for medical expenses. As a result of the decision, states are now prohibited from seeking reimbursement for Medicaid costs from settlement proceeds that were intended to cover items other than medical expenses, such as pain and suffering and lost wages.The Supreme Court held that the federal anti-lien statute prevents states from attaching the non-medical portion of a settlement or judgment.

AIG
Stands for "American International Group" In structured settlement parlance it may be used to refer those members of American International Group family that issue structured settlement annuities (American General Life Insurance Company and American International Life Assurance Company of New York).

AKA
"Also known as". Used to list aliases or another name, or another spelling of a name used by a person.

AMT

See Also: Alternative Minimum Tax (AMT)  

Acknowledgement
The signature of a clerk or attorney certifying that the person filing the document has sworn that the contents are true, and/or that the document is signed by his or her free act and deed.

Action
Also called a case or lawsuit. A civil judicial proceeding where one party sues another for a wrong done, or to protect a right or to prevent a wrong.

Activities of Daily Living
The following six are generally regarded as essential ADLs: bathing or showering, dressing, eating, getting in or out of bed or chairs, walking, and using the toilet. Inability to perform two out of the six ADLs is usually required in order to collect under a long term care (LTC) policy

Adjournment
Postponement of a court session until another time or place.

Adjudication
A decision or sentence imposed by a judge.

Adjusted Gross Income (AGI)
Gross income less allowable adjustments or deductions. It is the income which is used to calculate the taxes paid to the Federal Government.

Administrator
The individual or institution appointed by a court to oversee the settlement of the estate of a person who has died without a will. A female administrator sometimes referred to as an Adminstratrix.

Affidavit
A written statement made under oath.

Affirmation
Declaring something to be true under the penalty of perjury by a person who will not take an oath for religious or other reasons.

Agent
A party appointed to act on behalf of a principal entity or person.

Alimony
Money a court requires one spouse to pay the other spouse for support before and/or after the divorce is granted. If you do not ask for alimony at the final hearing, you can never get it in the future.

Allegation
Saying that something is true. The assertion, declaration or statement of a party in a case, made in a pleading.

Allstate International Assignments, Ltd.
A special purpose corporation formed for the purpose of accepting periodic payment obligations by way of non qualified assignments, including employment litigation settlements, compromised workers compensation claims and Structured Sales transactions and others. It is resident in Barbados and its transactions are governed by the Taxation Treaty between the United States and Barbados. It is registered with the IRS and holds a US Tax ID number.

Alternative Dispute Resolution
Also called ADR. Any method used to resolve disputes other than traditional trial proceedings. For example, mediation. ADR programs speed up the disposition of civil cases.

Alternative Minimum Tax (AMT)
A Federal Tax, introduced in 1969, the aim of which is to ensure that wealthy individuals, estates, trusts and corporations pay a minimum level of income tax. For individuals, the AMT is calculated by adding the AGI to tax preference items. If you live in a state which falls within certain Federal Circuits, the AMT can be an issue for cases involving taxable damages, especially with respect to attorney fees. The issue may be mitigated by structuring fees.

AmGen
Structured Settlement industry moniker for American General Life Insurance Company.

Annualize
Taking an item measured over a certain period and restating it on an annual basis

Annuitant
The individual named under an annuity contract who will serve as the measuring life for purposes of determining the benefits that will be paid under the contract.

Annuity Back Stop
An effective financial strategy employed when a measuring life has a very high rated age. Using a life only annuity with a deferred start date the annuity approaches pure insurance and represents a minimal percentage of the settlement. With the annuity as the backstop more cash can be paid up front to provide liquidity and/or invested . May also referred to as "annuity insurance back stop"

Annuity Issuer
The life insurance company issuing the annuity that is used as "qualified funding asset" under a structured settlement, or the funding instrument in a "non qualified structured settlement". Sometimes referred to as "annuity carrier". The annuity issuer may offer other types of annuities, life insurance, disability insurance and other insurance products. Please click here to see Who Writes Structured Settlement Annuities and what are commonly referred to as Non Qualified Structured Settlements.

Answer
A court document, or pleading, in a civil case, by which the defendant responds to the plaintiff's complaint

Appeal
A legal procedure in which the losing party requests that a higher Court review the lower court's decision

Appeal Bond
Money paid to the court while taking an appeal to cover costs and damages to the other party, if the appeal is not successful.

Appearance
The official court form filed with the court clerk which tells the court that you are representing yourself in a lawsuit or criminal case or that an attorney is representing you.

Appellant
The party appealing a decision or judgment to a higher court.

Appellee
The party against whom an appeal is taken.

Arbitration
Submitting a case or dispute to designated parties for a decision, instead of using a judge.

Arrearages
Money for alimony and/or child support, which is overdue and unpaid.

Assign It!®
Registered Trademark of 4structures.com, LLC

Assignee
The person or entity to whom legal liability is transferred with respect to an obligation

Assistant Attorney General
An attorney who represents a state agency in civil cases.

Attachment
A lien on property or assets to hold it to pay or satisfy any final judgment.

Attorney of Record
Attorney whose name appears in the permanent records or files of a case.

Award
A decision made by a court to compensate a party for their claims

Bar
Refers to attorneys as a group.

Bear Market
Any market in which prices are in a downward trend

Bench Trial
Trial by a judge, rather than by a jury.

Beneficiary
The person(s) or entity who receive a death benefit when the payee of the structure dies prior to the date upon which the annuity completes its payment schedule.

Best's Rating
The rating that A. M. Best & Company assigns to insurance companies based on a company's ability to meet its policyholder obligations. Best assigns letters to rate the claims paying ability and a roman numeral to reflect the size of the company being rated. The highest rating category is A++XV (Superior).

Bond simulation
In a structure context it refers to designing a cash flow to mimic a bond in which a series of payments are made followed by a deferred lump sum or balloon payment that is equal to the total cost of the structure.

Bonds
Debt issued for a period of more than one year. Bonds may be sold by U.S. and local governments and agencies, corporations. The issuer of a bond is actually lending money to the bond purchaser in exchange for repayment over time.

Book Rate
Pricing a structured settlement annuity (or other payout annuity) off the structured settlement broker's or settlement planner's rate disk (in the era before computers rates were derived from a rate book and the name has stuck!). Sometimes book rates may be improved upon with a daily rate if spot bond rates in the open market are better than what the annuity issuer's actuaries priced into the book rate.

Brief
A written document prepared by a lawyer or party on each side of a dispute and filed with the court in support of their arguments.

Bull Market
Any market in which prices are in an upward trend

CD

See Also: Certificate of Deposit  

CFP

See Also: Certified Financial Planner  

CGS
Connecticut General Statutes

CLU
Chartered Life Underwriter

CONSIDERATION
A critical element in the law of contracts, consideration is a benefit which must be bargained for between the parties, and is the essential reason for a party entering into a contract, such a structured settlement agreement and release. Consideration must be of value (at least to the parties), and is exchanged for the performance or promise of performance by the other party. In a contract, one consideration (thing given) is exchanged for another consideration. It is critical that the consideration for the settlement of a case that includes a structured settlement reflects the promise to pay the future structured settlement payments as part of the consideration.

CPI

See Also: Consumer Price Index  

CPLR
New York's Civil Practice Law Rules.

CSSC

See Also: Certified Structured Settlement Consultant  

Capital Gains
For tax purposes, a positive difference ("gain") between the purchase price and selling price of capital assets.

Capital Gains Tax
Tax assessed on a capital gain. If the asset was held for longer than one year the tax is 15%, if held less than one year ( a "short term capital gain"), then the tax is the same as the owner’s income tax rate.

Capital Losses
For tax purposes, a negative difference ("loss") between the purchase price and selling price of capital assets..

Caption
The heading of a court pleading or document illustrating the names of the parties, the name of the Court and the docket or index number

Case
A lawsuit or action in a court.

Case Conference
A meeting scheduled by the court to review the case.

Certificate of Deposit
A time deposit issued by a bank indicating a specific sum of money to be deposited. The CD carries a specific arte of interest and has a specific maturity date of generally up to 5 years. Some CDs carry penalties for breaking them prior to the maturity date.

Certified Structured Settlement Consultant
A designation earned in conjunction from University of Notre Dame and the NSSTA by a Structured Settlement Consultant after a battery of courses and successfully passing an examination.

Certify
To testify in writing; to make known or establish as a fact.

ChFC
Chartered Financial Consultant

Charge to Jury
In trial practice, an address delivered by the court to the jury at the close of the case instructing the jury as to what principles of law they are to apply in reaching a decision.

Chattels
All property except real property; personal property. For example jewelry, clothing, furniture, and appliances.

Child
Any person under the age of sixteen (16) years of age.

Child Support
Money paid by a parent to help meet the financial needs of a child.

Child's case
The seminal US legal case on structured attorney fees

Claim
In civil cases, the statement of relief desired.

Class Action
A legal complaint filed by a group of lawyers for a group of claimants who are "similarly situated" with respect to their claims

Common Law
Laws that develop through case decisions by judges. Not enacted by legislative bodies.

Complaint
A legal document that tells the court what you want, and is served with a summons on the defendant to begin the case.

Compound interest
Interest paid on previously earned interest as well as principal.

Constructive Receipt
A tax doctrine the gist of which is that a taxpayer, while not actually receiving funds, has them set aside, credited to an account, or otherwise made available, they are 'constructively received' and will be treated as taxable income. Income subject to substantial limitations or restrictions is not considered constructively received.

Consumer Price Index
Measures the price of consumer goods and services and generally used to measure the pace of inflation in the United States

Contempt of Court
A finding that someone disobeyed a court order. Can also mean disrupting court, for example, by being loud or disrespectful in court

Continuance
The adjournment or postponement of a court case to another day.

Contract
A legally enforceable agreement between two or more persons or parties.

Corpus
From the Latin word for body it refers to the principal amount in a trust, as opposed to income

Costs
Expenses in prosecuting or defending a case in court. Usually does not include attorney’s fees.

Count
The different parts of a complaint, which could each be a basis or grounds for the lawsuit.

Countable Resources
Financial assets that are considered in the resource assessment for means-tested benefits such as Medicaid, and that are subject to resource limits.

Counter Claim
A claim by the defendant in a civil action that the defendant is entitled to damages or other relief from the plaintiff.

Court Clerk
The person who maintains the official court record of your case. The court clerks’ office receives all court papers and assigns hearing dates.

Court Reporter
The person who records everything said during the court hearing or deposition on a stenograph machine and prepares a written record for a fee, if requested.

Custody
A court order deciding where a child will live and how decisions about the child will be made. Parents may ask for any custody arrangement that they believe is in the best interest of their child.

DOB
Date of Birth. Often part of the question "What's your DOB?"

Daily Rate
Special pricing of a structured settlement annuity (or other payout annuity) by the annuity issuer's actuaries. Sometimes book rates may be improved upon with a daily rate if spot bond rates in the open market are better than what the annuity issuer's actuaries priced into the book rate. Daily rates may be better or worse than book rates. Generally annuity issuers have a threshold above which daily rates are required.

Damages
Money a party receives as compensation for a legal wrong.

Decedent
Deceased individual.

Defendant
In civil cases, the person who is given court papers, also called a respondent. In criminal cases, the person who is arrested and charged with a crime.

Deferred Income Annuity
A type of income annuity which enables you to purchase, with after tax cash today, a defined amount of income (for life or for a certain time period) to commence at a future date. It's a form of non qualified "defined benefit". The annuitant benefits from tax deferral on the interest on the consideration placed in the deferred income annuity. For more information The Deferred Income Annuity Blog may be a useful resource

Deposition
Testimony of a witness taken, under oath, in response to another partys questions. Testimony given outside the courtroom, usually in a lawyers office. A word for word account (transcript) is made of the testimony.

Discovery
A formal request by one party in a lawsuit to disclose information or facts known by other parties or witnesses.

Dismissal
A judge's decision to end the case.

Dismissal Without Prejudice
A judge's decision to end the case which permits the complainant or prosecutor to renew the case later. In contrast, dismissal "with prejudice" prevents the complainant or prosecutor to bring or maintain the same claim or action again.

Domicile
The permanent home of a person. A person may have several residences, but only one domicile.

Donee
The person that receives the gift

Donor
The person that makes a gift

EFT
Electronic Funds Transfer. Periodic payments may be made directly to your bank account. Funds are thereby available immediately so that you don't have to wait for the check to clear.

East West Diversification
Split funding the structured settlement program evenly across two or more structured settlement annuity issuers.

Economic Benefit Doctrine
The economic benefit doctrine holds that benefits should be taxed to when the are conferred. The economic benefit doctrine was first judicially applied to deferred compensation in Sproull v. Commissioner, 16 T.C. 244 (1951), aff'd, 194 F.2d 541 (6th Cir. 1952). In Sproull, a trust was created in 1945 for the benefit of a company president. The trustee was to pay half of the money to the president in 1946 and the remainder in 1947. The Tax Court ruled that economic benefit had been conferred to the president upon creation of the trust in 1945 because no contingencies for payment were involved and no one other than the employer had any control or interest in the money in the trust.

Effective Discount Rate
In a structured settlement factoring transaction, the effective discount rate is the rate a seller of structured settlement payment rights is effectively "paying" to the buyer in exchange for "cash now" AFTER taking into account all charges. In the context of a structured settlement factoring transaction, consumers need to beware of looking simply at the quoted discount rate, which is often quoted before charges. If you find yourself considering selling your payment rights, use the effective discount rate to evaluate the wisdom of selling your payment rights. You can use the effective discount rate to compare to other sources of capital.

Emancipated Minor
A person under the legal majority age of 18 who is granted most rights and legal privileges of an adult (C.G.S.§46b-150, et seq.).

Encumbered
When a lien, mortgage or restrain is placed on a property

Enhanced Annuity

See Also: Rated Age  

Estate tax
A confiscatory tax imposed by the federal government (and several states) on the right to transfer property at death.

Ex Parte
Done for, or at the request of, one side in a case only, without prior notice to the other side.

Excess Policy
The insurance policy (or policies) that responds to a claim when the limits of the primary policy are exhausted, or in effect a deductible has been satisfied. Sometimes referred to as an "umbrella" policy. May or may not be issued through the same insurance company that issued the primary policy.

Exempt Resources
Financial Resources that are not considered as a financial asset available to the individual when determining his or her eligibility for means-tested benefit programs such as Medicaid.

FASB

See Also: Financial Accounting Standards Board  

FDIC

See Also: Federal Deposit Insurance Corporation  

Federal Deposit Insurance Corporation
A Federal agency that insures bank deposits. Please note that annuities are not FDIC insured.

Fiduciary
An individual or institution responsible for acting in the best interests of another party. A fiduciary is bound by law and has a duty to put aside personal interests and act in good faith when making decisions for the benefit of another.

Filing
Giving the court clerk legal papers which become part of the case file.

Financial Accounting Standards Board
A board composed of independent members who create and interpret so-called Generally Accepted Accounting Principles (GAAP)

Financial Affidavit
A sworn statement of income, expenses, property (called assets) and debts (called liabilities).

Finding
The court’s or jury’s decision on issues of fact.

GILT
A bond issued by the UK government. Gilts are the UK equivalent of a U.S. Treasury security. Name from the gold ("gilt") edged borders of the original bond certificates.

Gift Tax
Tax imposed by federal or state government on an asset transferred as a gift to individuals

Grantor
The creator of a trust

Grievance
A complaint filed against an attorney or judge, claiming an injury or injustice.

Guaranteed Benefit
Payments to be made whether or not the annuitant survives the entire payment schedule

Guardian
An individual or institution named by a court to manage the property of a person who is judged incapable of handling his or her own affairs.

Guardian Ad Litem
A court appointed individual who is responsible for making sure the best financial interests of the minor or incapacitated adult are met in a legal proceeding. The scope of the authority is determined by the Court.

Hartford CEBSCO:
The qualified assignment company utilized for structured settlements placed with Hartford Life Insurance Company. CEBSCO, domiciled in the State of Connecticut, stands for Comprehensive Employee Benefit Service Company and is an affiliate of Hartford Life Insurance Company.

Hobson's choice
An apparently free choice that offers no real alternative. e.g. "You can have any color (Model T) as long as its black" Henry Ford

IRC

See Also: Internal Revenue Code  

IRC 461(h)
A statute created under the Deficit Reduction Act of 1984 which affects the timing of the tax deduction taken by taxed self insured companies. IRC461(h) allows tax deductions only when "economic performance" occurs. In other words for self funders, the deduction is possible only as payments are made to the plaintiff. Previous practices by self insured were deemed abusive in that some self insureds, using a method of accrual accounting, were taking deductions for the total of future pay outs in the year of the settlement.

IRR

See Also: Internal Rate of Return  

IRS

See Also: Internal Revenue Service  

IRS Form 6252
This form is required by the IRS to report Installment Sale income and is attached to your US tax return.

Impaired Risk Annuity

See Also: Rated Age  

In4structure®
Registered Trademark of 4structures.com, LLC

Inflation
When the prices of goods and services rise, causing the purchasing power of your dollar to decline.

Installment Sale
As defined in the Internal Revenue Code Section §453, "a disposition of property where one payment is to be received after the close of the taxable year in which the disposition occurs"

Interest rate risk
The risk associated with changes in levels of interest rates

Internal Rate of Return
Allows you to find an interest rate that is equivalent to the returns (on the amount of premium) that you expect from your structure. Once you know the rate, you can compare it to other rates that you could earn by investing in other plans and determine the best value for your money. Care should be taken when understanding how the IRR is calculated in a structured settlement proposal when there is an annuitant with reduced life expectancy. For more detail click here

Internal Revenue Code
Various statutes and regulations making up Federal tax law in the United States of America.

Internal Revenue Service
The federal agency responsible for the collection of federal taxes on income, social security, gift, estate and excise taxes.

Intestacy Laws
Laws governing the distribution of your property if you die without a will. If you die without a will you are said to die "intestate".

Irrevocable Trust
A trust you can't revoke or terminate and have given up the right to amend, alter, change or retrieve the assets placed into it. Generally used to save estate taxes or protect against the claims of creditors. Often used to own one or more life insurance policies.

JSC
Justice of the Supreme Court (New York)

John Hancock Assignment Company
The qualified assignment company utilized for structured settlement annuities placed with John Hancock Life Insurance Company. Sometimes referred to by the acronym "JHAC". JHAC is domiciled in the State of Connecticut.

Judgment
A ruling or order of the court

Lien
An encumbrance on property or settlement proceeds for the payment of a debt

Life Care Plan *
A dynamic document based upon published standards of practice, comprehensive assessment, data analysis and research, which provides an organized concise plan for current and future needs with associated costs, for individuals who have experienced catastrophic injury or have chronic health needs

*Combined definition of the University of FLA/Intelicus at the 2nd annual Life Care Planning conference and the International Academy of Nurse Life Care Planners, presented at the Forensic Section meeting, NARPPS Annual Conference Colorado Springs and agreed upon April 3, 1998

Living Will
A legal document in which an individual states, in advance of final illness or injury, his or her wishes regarding procedures and equipment designed to extend life.

Loss of Consortium
The inability of one's spouse to have normal marital relations.

Lump Sum Annuity
An annuity designed to make a single payment on a specified future date or series of balloon payments on specified future dates

MSAT
Medicare Set Aside Trust

Marital Deduction
This is an important deduction available to a married couple for reducing the tax on lifetime gifts or transfers at death. The deduction is unlimited and can therefore potentially eliminate the federal estate tax on any size estate. It is allowed for the net value of property passing outright (or the equivalent of outright) or in a manner that meets rigid statutory guidelines.

Mean
The sum of observed data divided by the number of observations (For example 2+2+3+3+5 equals 15; 15 divided by 5, the number of observations, equals 3)

Means Tested Programs (Means-Tested Programs)
Public benefit programs, like SSI and Medicaid, that have eligibility limits for income and financial assets.

Medicaid
A joint federal/state program providing medical assistance to eligible needy persons, under which medical services are delivered by participating providers and reimbursed according to state formulas.

Medicare (Title XVIII)
A federal program for the elderly and disabled, regardless of financial status. Unlike with Medicaid, it is not necessary for Medicare recipients to be poor. A USA health insurance program for people aged 65 and over, for persons eligible for social security disability payments for two years or longer, and for certain workers and their dependents who need kidney transplantation or dialysis. Monies from payroll taxes and premiums from beneficiaries are deposited in special trust funds for use in meeting the expenses incurred by the insured. It consists of two separate but coordinated programs: hospital insurance (Part A) and supplementary medical insurance (Part B).

Medicare Approved Charge
The amount Medicare approves for payment to a physician. Generally, Medicare pays 80 percent of the approved charge and the beneficiary pays the remaining 20 percent. Physicians may bill beneficiaries for an additional amount (the balance) not to exceed 15 percent of the Medicare approved charge.

Municipal Bond
A bond issued by a state or county, city, town or village. Generally the interest paid on many municipal bonds is exempt from federal income taxes and on state and local taxes in the state of issue.

NABCO

See Also: Nabco Assignments, Ltd.  

NABCO Assignments, Ltd.
A special purpose corporation formed for the purpose of accepting periodic payment obligations by way of non qualified assignments, including employment litigation settlements, compromised workers compensation claims and Structured Sales transactions and others. It is resident in Barbados and its transactions are governed by the Taxation Treaty between the United States and Barbados. It is registered with the IRS and holds a US Tax ID number. Please note that as of March 1, 2007 the company became known as Allstate International Assignments, Ltd.

NAMSAP
National Alliance of Medicare Set Aside Professionals.

NSSTA

See Also: National Structured Settlement Trade Association  

NYLIAC:
Stands for New York Life Insurance and Annuity Corporation. A Delaware Corporation utilized, among other things, as the qualified assignment company for structured settlements placed with New York Life Insurance Company.

National Structured Settlement Trade Association
A trade association of over 500 members who are financial professionals and product providers whose goal is to advance the use of structured settlements as a means to resolve personal injury, workers' compensation and other types of claims

Net Present Value
The present day value of a series of future cash flows using a specified discount (interest) rate and is a method to evaluate different financial proposals. The amount of cash today that is the equivalent in value to a stream of payments to be made in the future

New York Life Insurance and Annuity Corporation
A Delaware Corporation, "NYLIAC" is the assignee used for structured settlements placed with New York Life Insurance Company as the annuity issuer

Normal Life Expectancy
The age to which a person is expected to live from his/her current age. Based on various statistical analyses and used by insurance companies to set prices and to make benefit projections. The normal life expectancy measure may vary depending on the study with the older studies or mortality tables (e.g. the 1983 CSO) showing a shorter normal life expectancy.

North South Diversification
Split funding the structured settlement program across two or more structured settlement annuity issuers in segment chain so that a new payment stream one carrier starts when the payment stream from the prior one finishes. For example annuity issuer A might take Years 1-10, issuer B Years 11-20 and issuer C Years 21-Life. Generally a more highly rated annuity issuer or issuers would carry the end of the chain.

Notarize
The act of a notary public witnessing a person signing a document; many legal documents require a notarized signature

Notary Public
A person authorized by the state where the signature is being made to witness the signature on certain legal documents

Obligor
The person or entity that owes money as a result of an agreement or judgment

One Party Release
A settlement agreement or release that is executed only by the releasing party. Also known as a single party release.

P.L. 97-143 The Periodic Payment Settlement Act of 1982

See Also: The Periodic Payment Settlement Act of 1982  

PL 97-143 The Periodic Payment Settlement Act of 1982

See Also: The Periodic Payment Settlement Act of 1982  

POMS
The Program Operations Manual System for the Social Security Administration. The POMS is the primary source of information used by Social Security Administration employees for social security benefits.

Period Certain
The Period that structured settlement or income annuity payments will be paid whether or not the plaintiff/payee/payment recipient dies prior to the completion of the Period. It is sometimes referred to as the "guarantee period". For example: $1,000/month for 10 years certain means that the income will be paid to the (or in the case of death, the beneficiary) for a total of 10 years whether or not the plaintiff/payee/payment recipient lives or dies. Sometimes the annuity is expressed as "x years certain and life", or life with x years certain" in which case the same applies until the end of the period certain after which payments become life contingent and are only paid if the annuitant is living.

Periodical Payment Order
An order of the Court in the United Kingdom imposing periodical payments.

Periodical Payments
What they call "periodic payments" in the United Kingdom. The Courts Act of 2003 effectively enables the Court to order periodical payments without the consent of the parties

Personal Consumption
In wrongful death cases, this concept is the process of pooling household income together and subtracting what the decedent would have consumed, but for his or her death. The personal consumption is based on household size and has been adopted by many states.

Plaintiff
A person or entity that brings a legal action and is seeking damages from another party

Pleadings
The court documents filed with the court by the parties in a civil or criminal case. For example motion to dismiss; motion for modification.

Pooled Income Trust
A form of Special Needs Trust that is managed by a charity or other nonprofit organization. Each beneficiary has a separate account. However, trust assets are pooled for investment and management of funds. The payback requirement is waived to the extent that assets in the trust are left in the trust upon the beneficiary's death.

Post Judgment
Any request to a court or action by a judge after a judgment in a case.

Posting Bond
To pay the court ordered bond amount with cash or property.

Primary Policy
The first policy to respond to an insurance claim

Pro Se
A Latin phrase meaning for "yourself"--representing yourself in any kind of case.

Promise to Pay
A mandatory requirement of the documentation for any structured settlement setting forth the periodic payment obligation of the paying party. This obligation is subsequently transferred via a qualified assignment. However, without the initial promise to pay there is no structured settlement.

Prospectus
A formal written document required by law to sell certain securities that contains information that an investor needs to make an informed decision. In a structured settlement context, a prospectus is delivered in conjunction with the presentation of a variable structure by a structured settlement broker who is properly registered to sell securities through a broker-dealer. The prospectus may include fund objectives, an explanation of risks, costs and other essential information.

Pruco Assignments Corporation
A special purpose corporation formed in 2006 for the purpose of accepting periodic payment obligations by way of non qualified assignments, including employment litigation settlements, divorce settlements, punitive damages, allocation of interest, compromised workers compensation claims transactions and more. Assumed obligations are guaranteed by The Prudential Insurance Company of America. It is resident in Barbados and its transactions are governed by the Taxation Treaty between the United States and Barbados. It is registered with the IRS and holds a US Tax ID number. Pruco's website is www.pruco.bb

QSF
Qualified Settlement Fund

Qualified Assignment:
An assignment of obligation to make future periodic payments which satisfies the requirements of Internal Revenue Code (IRC) § 130. In a structured settlement agreement the original obligor (the defendant, insurance carrier for the defendant, or the trustee of a qualified settlement fund, assigns its obligation to make the future periodic payments called for in the settlement agreement to a "qualified assignee". Generally these are special purpose companies. A qualified assignment company may actually be an insurance company itself. The qualified assignment company is usually related to the life insurance company issuing the structured settlement annuity. The assignee company typically purchases an annuity from the related life insurance company. A qualified assignment requires the plaintiff's consent.

Qualified Funding Asset
The type of asset that can be utilized by a qualified assignment company, pursuant to Internal Revenue Code (IRC) § 130, to fund the future periodic payments (structured settlement payments) called for in the settlement agreement and release or court order. Generally Internal Revenue Code (IRC) § 130 only permits the use of a structured settlement annuity issued by an insurance company, or obligations of the United States government, to serve as a qualified funding asset.

Qualified Funding Asset:
The type of asset that can be utilized by a qualified assignment company, pursuant to Internal Revenue Code (IRC) § 130, to fund the future periodic payments (structured settlement payments) called for in the settlement agreement and release or court order. Generally Internal Revenue Code (IRC) § 130 only permits the use of a structured settlement annuity issued by an insurance company, or obligations of the United States government, to serve as a qualified funding asset.

Qualified Settlement Fund

RPI

See Also: Retail Prices Index  

RSP

See Also: Registered Settlement Planner  

Rate-Up:
Another way of expressing the term "rated age" . The rate-up is the a number of years which are added to the actual age of the measuring life when pricing a structured settlement annuity, structured sales annuity, deferred income annuity or other lifetime income annuity. Please note that a period certain or term certain , is not affected by a rate-up or rated age.

Rated Age
Certain medical conditions and injuries can result in a "rated age" or "impaired risk rating" when an underwriter at an annuity issuing life insurance company estimates that, due to these conditions/injuries, the annuitant may not live a normal lifetime and it is therefore willing to accept the risk of providing lifetime payments at a lower annuity premium cost than would otherwise be required. The annuity is quoted at the rated age, as if the annuitant's age is the rated age instead of the annuitant's actual age. For more details on rated ages, see Rated Age and Impaired Risk Ratings.

Rating Agencies
Rating agencies provide formal opinions with regard to an insurance company that are of importance in measuring how effectively and profitably a particular company is likely to perform in the future and/or meet its obligations. The major rating agencies are A.M. Best & Co., Standard & Poors (S & P), Fitch, Moodys and Weiss Research. There may be a difference in approach between rating agencies but factors generally considered include company profitability, liquidity, investment strategy, surplus position, business practices and capability of management. Companies pay to get rated by all agencies with the exception of Weiss Research.

Registered Settlement Planner
As set forth on the Texas Tech University web site , "The Registered Settlement Planner Program is a product of collaboration between the Registry of Settlement Planners Board (RSP Board) and Texas Tech University’s Personal Financial Planning Division. The coursework is rigorous and compares to graduate-level work. It is designed for people who have made a serious commitment to the field of comprehensive settlement planning. The program consists of three courses taken over a one-year period. Successful completion of the first two courses is required to meet the education requirement of the RSP designation. The third course is an optional case studies course designed to provide instruction on the creation of a comprehensive settlement plan that will meet the RSP Board’s rigorous standards".

Restitution
Money ordered to be paid by the defendant to the victim to reimburse the victim for the costs of the crime. Generally making good, or giving the equivalent for any loss, damage or injury caused by a persons actions. Often a condition of probation.

Retail Prices Index
The Retail Prices Index, or "RPI", is the average measure of change in the prices of goods and services bought for the purpose of consumption by the vast majority of households in the United Kingdom. It is compiled and published monthly. The RPI is a critical tool for economists, business and government. It is used for the indexation of pensions, state benefits, wage agreements, maintenance, child support payments and benefits subject to a periodical payment order are often linked directly to the RPI.

Rev. Proc. 93-34
Deals with Qualified Settlement Fund as an assignor in structured settlement transactions

Revenue Ruling 82-122
This ruling answered the question of whether the substitution of a new obligor and a change in the rate of interest would be considered a satisfaction or disposition of an installment obligation within the meaning of IRC§453B(a). The ruling held that the increase in the amount paid monthly to reflect the higher interest rate on an installment obligation coupled with the substitution of a new obligor does not constitute a disposition of the installment obligation within the meaning of IRC §453B(a)

Risk
The quantifiable likelihood of loss or less-than-expected returns. The variability of factors which affect a plaintiff/investor/decision-maker. Some examples of risk that affect Plaintiffs and Defendants include interest rate risk, credit risk, financial risk, event risk, duration risk, economic risk, inflation risk, country risk. Plaintiffs, Defendants and their attorneys consider the risk of possible trial outcomes which is partly the reason for many out of court settlements.

Rule of 72
A rule of thumb which says that if you take any number, representing the yield on a lump sum investment, and divide it into the number 72, the result will tell you the number of years that it will take for the investment to double
Example: if you are considering an investment that pays 6%, it will double in 12 years (72 divided by 6)

SNT

See Also: Special Needs Trust   Supplemental Needs Trust  

STRUCTURED SETTLEMENT AFFIDAVIT
A form of transparency used by certain structured settlement broker and settlement planners which contains a series of affirmative written representations and warranties.

Secured Creditor
Places the claimant above general creditors in the event of a qualified assignment company insolvency through the set aside of assets by the payor. Thus the qualified assignment company's other creditors cannot use the assets to satisfy their claims against the qualified assignment company. A structured settlement can be funded via a structured settlement annuity or US government obligations so it is these assets that would be pledged.

Service
The legal method for giving a copy of the court papers being filed to other parties in a case.

Settlement Agreement
A legal instrument executed by parties to a lawsuit or claim which states the case facts and the terms by which the Plaintiff//Claimant is releasing the Defendant/Respondent

Settlement Annuity
An annuity featuring customizable cash flows, allowing for one or more payment streams, that may be of the type used as a "qualified funding asset" pursuant to IRC 130(d) (see Structured Settlement Annuity), or as the funding vehicle for a non qualified assignment

Settlement Plan
Evaluating the investment and financing options available to a claimant and/or his/her attorneys. Planning includes helping the Claimant and/or his attorneys make optimal decisions, considering the consequences of these decisions in the form of a settlement financial plan and then comparing future performance against the plan.

Settlement Planner
A financial professional who helps to design the optimal plan for distribution of a claimant's settlement proceeds and to guide the individuals and/or their attorneys through the plan and its implementation.

Settlement Purchasing Industry:
Describes the secondary market for structured settlement payment rights. Collectively, the companies, firms, their agents and employees who engage in the purchase of the rights to structured settlement payments and other periodic payments. The major participants in the settlement purchasing industry are members of the National Association of Settlement Purchasers (NASP). It is important to note the distinction between the purchase of a structured settlement annuity and the purchase of rights to receive structured settlement payments. A settlement purchaser does not buy structured settlement annuities, it buys the rights to the structured settlement payments.

Simple interest
Interest is only paid on the principal amount

Special Needs Trust
A trust designed to care for an injured party's special (supplemental) needs so as not to disqualify the beneficiary from eligibility for SSI and Medicaid. Known as Supplemental Needs Trust in the State of New York.

Split Agreement
A written agreement to split commissions and production credit on the placement of a structured settlement annuity among two or more licensed insurance agents or brokers . Such agreements generally provide that each party works on behalf of their own client and that commissions are paid directly from the annuity issuer(s).

Standard Deviation
A measure of dispersion of a set of data from its mean

Statute
A law enacted by a legislative body.

Stipulation
Also called a "stip." A written agreement by the parties or their attorneys.

Structured Sales
An installment sale agreement is entered into between buyer and seller of property, or a business, in which the buyer agrees to pay cash plus a promise to pay future periodic payments. The buyer assigns his/her/its liability to make the periodic payments to a non qualified assignee and transfers a certain amount of cash to the assignee which then purchases an annuity contract from a life insurance company to fund its obligation.

Structured Sales Authority
A web log dedicated to issues related to disposition of businesses and real estate using the structured installment sales method. Located at www.4structuredsales.com

Structured Settlement
Defined under IRC Section 5891(c)(1) as " an arrangement which is established by

(i) suit or agreement for the periodic payment of damages excludable from the gross income of the recipientunder IRC Section 104(a)(2), or

(ii) an agreement for the periodic payment of compensation under any workers' compensation law excludable from the gross income of the recipient under section 104(a)(1), and under which the periodicpayments are--

   (i) of the character described in subparagraphs (A) and (B) of section 130(c)(2), and

  (ii) payable by a person who is a party to the suit or agreement or to the workers' compensation claim or by a person who has assumed the liability for such periodic payments under a qualified assignment in accordance with section 130.

Structured Settlement Addendum
An Exhibit to a "one party" release that sets forth the terms and conditions of a structured settlement.

Structured Settlement Annuity
An annuity featuring customizable cash flows, allowing for one or more payment streams, that is used as a "qualified funding asset" pursuant to IRC 130(d). A structured settlement annuity is offered only through specialized agents and/or brokers and their affiliates who are appointed or authorized to use the software of, and distribute structured settlement annuity quotes by, the life insurance companies that issue structured settlement annuities.

Structured Settlement Broker
An individual possessing specific expertise, and one or more state insurance licenses, who places structured settlement annuities which are used as a "qualified funding asset" when a structured settlement is part of the resolution of a claim or litigation. Most active structured settlement brokers are members of the National Structured Settlement Trade Association (NSSTA).

Structured Settlement Company
A company that engages in the marketing and placement of new structured settlement annuities, which are regulated insurance products. Included in the definition of a structured settlement company are companies that have employees or, who have independent licensed life insurance agents and brokers, whose primary business is to place structured settlements. There even once was a structured settlement annuity brokerage firm called "The Structured Settlement Company". The term "structured settlement company" is sometimes used to refer to certain life insurance companies who manufacture or issue new structured settlement annuities. Some settlement transfer companies, settlement purchasers or "cash now" companies, have tried to favorably position themselves by incorrectly using this term. However make no mistake, none of them can truly make the claim that they are a "structured settlement company."

Structured Settlement Factoring Company:
A company that engages in the purchase of the rights to receive future structured settlement payments. A transaction completed by such companies is known under the Internal Revenue Code Section 5891 as a 'structured settlement factoring transaction". Sometimes referred to as a "secondary market company" "settlement purchaser" , "cash now company", "cash flow purchaser", "transfer company" or "factoring company". Sometimes mislabeled in advertising by such settlement purchasers as a "structured settlement company". Don't be confused!

Structured Settlement Factoring Transaction
Describes a process, defined at IRC 5891(c)(3)(A), which results in the transfer of structured settlement payment rights for a discounted amount of cash. Don't believe the marketing hype! A structured settlement factoring transaction IS NOT a structured settlement transaction.