507C.42 Priority of distribution. The priority of distribution of claims from the insurer’s estate shall be in accordance with the order in which each class of claims is set forth. Claims in each class shall be paid in fullor adequate funds retained for the payment before the members of the next class receive anypayment. Subclasses shall not be established within a class. As used in this section, 'insurer’sestate' means the general assets of the insurer. The order of distribution of claims is: 1. Class 1. The costs and expenses of administration, including but not limited to the following: a. The actual and necessary costs of preserving or recovering the assets of the insurer.b. Compensation for all authorized services rendered in the liquidation.c. Necessary filing fees.d. The fees and mileage payable to witnesses.e. Authorized reasonable attorney’s fees and other professional services rendered in the liquidation. f. The reasonable expenses of a guaranty association or foreign guaranty association in handling claims. 2. Class 2. Claims under policies, including claims of the federal or any state or local government, for losses incurred, including third-party claims, claims guaranty association in handling claims. 2. Class 2. Claims under policies, including claims of the federal or any state or local government, for losses incurred, including third-party claims, claims against the insurerfor liability for bodily injury or for injury to or destruction of tangible property which arenot under policies, claims of a guaranty association or foreign guaranty association, claimsunder funding agreements as provided in section 508.31A, subsection 3, claims for aninsufficiency in the assets allocated to and accumulated in a separate account as provided insection 508A.1, subsection 8, and claims for unearned premium. Claims under life insuranceand annuity policies, whether for death proceeds, annuity proceeds, or investment values,shall be treated as loss claims. That portion of a loss, indemnification for which is providedby other benefits or advantages recovered by the claimant, shall not be included in thisclass, other than benefits or advantages recovered or recoverable in discharge of familialobligations of support or by way of succession at death or as proceeds of life insurance, oras gratuities. A payment by an employer to an employee is not a gratuity. coverable in discharge of familialobligations of support or by way of succession at death or as proceeds of life insurance, oras gratuities. A payment by an employer to an employee is not a gratuity. 3. Class 3. Claims of the federal government except those under class 2.4. Class 4. Reasonable compensation to employees for services performed to the extent that they do not exceed two months of monetary compensation and represent paymentfor services performed within one year before the filing of the petition for liquidation or,if the rehabilitation preceded liquidation, within one year before the filing of the petitionfor rehabilitation. Officers and directors are not entitled to the benefit of this priority. Thepriority is in lieu of other similar priority which may be authorized by law as to wages orcompensation of employees. 5. Class 5. Claims of general creditors, including claims of ceding and assuming reinsurers in their capacity as such, and subrogation claims. 6. Class 6. Claims of any state or local government except those under class 2. Claims, including those of a governmental body for a penalty or forfeiture, are allowed in this classonly to the extent of the pecuniary s of any state or local government except those under class 2. Claims, including those of a governmental body for a penalty or forfeiture, are allowed in this classonly to the extent of the pecuniary loss sustained from the act, transaction, or proceedingout of which the penalty or forfeiture arose, with reasonable and actual costs incurred. Theremainder of such claims shall be postponed to the class of claims under subsection 9. 7. Class 7. Claims filed late or any other claims other than claims under subsections 8 and 9. 8. Class 8. Surplus or contribution notes, or similar obligations, and premium refunds on assessable policies. Payments to members of domestic mutual insurance companies arelimited in accordance with law. 9. Class 9. The claims of shareholders or other owners.84 Acts, ch 1175, §42; 92 Acts, ch 1117, §29; 93 Acts, ch 88, §8; 94 Acts, ch 1023, §114; 97 Acts, ch 186, §4; 2006 Acts, ch 1117, §28, 29 Referred to in §507C.20, 507C.21, 507C.34, 507C.38, 507C.45, 507C.55, 507C.59, 508.31A, 508A.1 Sat Dec 23 00:39:54 2023 Iowa Code 2024, Section 507C.42 (18, 0)
Iowa Legal Code