The following words and phrases when used in this act shall have the meanings given to them in this section unless the context clearly indicates otherwise:

“Annuity issuer.” An insurer, or subsidiary or affiliate thereof, that has issued an insurance contract used to fund periodic payments under a structured settlement.

“Applicable law.” The laws of the United States, the laws of this Commonwealth and the laws of any other jurisdiction under whose laws a structured settlement agreement was approved by a court or responsible administrative authority.

“Best interests.” The standard applicable to transfers of structured settlement payment rights based on judicial findings regarding the payee and his dependents, as required by section 3(a)(3), unless if at the time the payee and the transferee enter into the transfer agreement a different standard is contained in the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.) or in a United States Treasury regulation adopted pursuant thereto, then such different standard.

“Dependents.” Include a payee's spouse and minor children and all other family members and other persons for whom the payee is legally obligated to provide support, including alimony.

“Discounted present value.” The fair present value of future payments, as determined by discounting such 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.

“Favorable tax determination.” With respect to a proposed transfer of structured settlement payment rights, any of the following authorities that is binding on the parties to such transfer and on the parties to the structured settlement agreement and any qualified assignment agreement and that definitively establishes that the Federal income tax treatment of the structured settlement for the parties to the structured settlement agreement and any qualified assignment agreement, other than the payee, will not be affected by such transfer:

“Payee.” A person domiciled in this Commonwealth who is receiving tax-free payments under a structured settlement and proposes to make a transfer of payment rights thereunder.

“Periodic payments.” Payments made pursuant to a structured settlement agreement, including scheduled future lump sum payments.

“Qualified assignment agreement.” An agreement providing for a qualified assignment within the meaning of section 130 of the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.).

“Settled claim.” The original personal injury or sickness claim or workers' compensation claim resolved by a structured settlement.

“Structured settlement.” An arrangement for periodic payment of damages established by settlement, judgment or decree in resolution of a settled claim.

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

“Structured settlement obligor.” With respect to any structured settlement, the party that has the continuing obligation to provide periodic payments to the payee under a structured settlement agreement or a qualified assignment agreement.

“Structured settlement payment rights.” Rights to receive periodic payments under a structured settlement, whether from the settlement obligor or the annuity issuer, where the payee is domiciled in this Commonwealth.

“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, decree or approval of any court or responsible administrative authority authorizing or approving such structured settlement.

“Transfer.” Any direct or indirect sale, assignment, pledge, hypothecation or other form of alienation, redirection or encumbrance made by a payee for consideration, provided, however, that this shall not apply to a blanket security agreement used to secure a loan originating from a Federal or State chartered lending institution. Any transfer made or agreed to under this act shall be considered to be a consumer transaction.

“Transfer agreement.” The agreement providing for transfer of structured settlement payment rights from a payee to a transferee.

“Transferee.” The party acquiring or proposing to acquire structured settlement payment rights through a transfer.