40-3635. Insurer determined insolvent; proposal to disburse assets; application by liquidator.
40-3635
40-3635. Insurer determined insolvent; proposal to disburse assets;application by liquidator.(a) Within 120 days of a final determination of insolvency ofaninsurer by a court of competent jurisdiction of this state, the liquidatorshall make application to the court for approval of a proposal to disburseassets out of marshaled assets, from time to time as such assets becomeavailable, to a guaranty association or foreign guaranty association havingobligations because of such insolvency. If the liquidator determines that thereareinsufficient assets to disburse, the application required by this section shallbe considered satisfied by a filing by the liquidator stating the reasons forthis determination.
(b) Such proposal shall at least include provisions for:
(1) Reserving amounts for the payment of expenses of administration andthe payment of claims of secured creditors, to the extent of the value of thesecurity held, and claims falling within the priorities established in K.S.A.40-3641, Class 1 and Class 2;
(2) disbursement of the assets marshaled to date and subsequentdisbursement of assets as they become available;
(3) equitable allocation of disbursements to each of the guarantyassociations and foreign guaranty associations entitled thereto;
(4) the securing by the liquidator from each of the associations entitled todisbursements pursuant to this section of an agreement to return to theliquidator such assets, together with income earned on assets previouslydisbursed, as may be required to pay claims of secured creditors and claimsfalling within the priorities established in K.S.A. 40-3641 inaccordance with suchpriorities. No bond shall be required of any such association; and
(5) a full report to be made by each association to the liquidatoraccounting for all assets so disbursed to the association, all disbursementsmade therefrom, any interest earned by the association on such assets and anyother matter as the court may direct.
(c) The liquidator's proposal shall provide for disbursements to theassociations in amounts estimated at least equal to the claim payments made, orto be made thereby, for which such associations could assert a claim againsttheliquidator, and shall further provide that if the assets available fordisbursement from time to time do not equal or exceed the amount of such claimpayments made or to be made by the association then disbursements shall be inthe amount of available assets.
(d) The liquidator's proposal shall, with respect to an insolvent insurerwriting life or health insurance or annuities, provide for disbursements ofassets to any guaranty association or any foreign guaranty association coveringlife or health insurance or annuities or to any other entity or organizationreinsuring, assuming or guaranteeing policies or contracts of insurance underthe acts creating such associations.
(e) Notice of such application shall be given to the association in eachstate and tothe commissioners of insurance of each of the states. Any such notice shall bedeemed to have been given when deposited in the United States certified mails,first-class postage prepaid, at least 15 days prior to submission of suchapplication to the court. Action on the application may be taken by the courtprovided the above required notice has been given and provided further, thattheliquidator's proposal complies with subsection (b)(1) and (2).
History: L. 1991, ch. 125, § 31; July 1.