507C.40 Claims of other person. 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, then the other person maydo so in the creditor’s name and shall be subrogated to the rights of the creditor, whether theclaim has been filed by the creditor or by the other person in the creditor’s name to the extentthat the other person discharges the undertaking. However, in the absence of an agreementwith the creditor to the contrary, the other person is not entitled to any distribution until theamount paid to the creditor on the undertaking plus the distributions paid on the claim fromthe insurer’s estate to the creditor equal the amount of the entire claim of the creditor. Anexcess received by the creditor shall be held by the creditor in trust for the other person.As used in this section, 'other person' is not intended to apply to a guaranty association orforeign guaranty association. 84 Acts, ch 1175, §40; 92 Acts, ch 1117, §28 Sat Dec 23 00:39:53 2023 Iowa Code 2024, Section 507C.40 (17, 0)
Iowa Legal Code