(a) In a delinquency proceeding against an insurer domiciled in this state, claims owing to residents of ancillary states shall be preferred claims if like claims are preferred under the laws of this state. Claims owing to residents or nonresidents shall be given equal priority of payment from general assets regardless of where the assets are located.
(b) In a delinquency proceeding against an insurer domiciled in a reciprocal state, claims owing to residents of this state shall be preferred if like claims are preferred by the laws of that state.
(c) The owners of special deposit claims against an insurer for which a receiver is appointed in this or any other state shall be given priority against their several special deposits in accordance with the provisions of the statutes governing the creation and maintenance of the deposits. If there is a deficiency in a deposit so that the claims secured by it are not fully discharged from it, the claimants may share in the general assets, but the sharing shall be deferred until general creditors and also claimants against other special deposits who have received smaller percentages from their respective special deposits, have been paid percentages of their claims equal to the percentage paid from the special deposit.
(d) The determination of the value of a security held by a secured creditor shall be under the supervision and control of the court, with due regard for recommendations made by the receiver. The value determined must be credited upon the secured claim, and a deficiency must be treated as an unsecured claim. If the claimant surrenders the security to the receiver, the entire claim shall be allowed as if unsecured. The value of a security held by a secured creditor must be determined in one of the following ways, as the court directs:
(1) by converting the security into money according to the terms of the agreement under which the security was delivered to the creditor; or
(2) by agreement, arbitration, compromise, or litigation between the creditor and the receiver.
(e) If a creditor, whose claim against an insurer is secured in whole or in part by the undertaking of another person, fails to prove and file that claim, the other person may do so in the creditor's name, and is subrogated to the rights of the creditor, whether the claim was filed by the creditor or by the other person in the creditor's name, to the extent that the other person discharges the undertaking. In the absence of an agreement with the creditor, the other person is not entitled to a distribution until the amount paid to the creditor on the undertaking plus the distributions paid on the claim from the insurer's estate to the creditor equals the amount of the entire claim of the creditor. Any excess received by the creditor shall be held by the creditor in trust for the other person. In this subsection, "other person" does not include a guaranty association or foreign guaranty association.Section: Previous 21.78.110 21.78.120 21.78.130 21.78.140 21.78.150 21.78.160 21.78.170 21.78.180 21.78.190 21.78.200 21.78.210 21.78.220 21.78.230 21.78.240 21.78.250 Next
Last modified: November 15, 2016