2009 Iowa Code
Title 13 - Commerce
Subtitle 1 - Insurance and Related Regulation
CHAPTER 507C - INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION
507C.42 - PRIORITY OF DISTRIBUTION.

        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 full or adequate
      funds retained for the payment before the members of the next class
      receive any payment.  Subclasses shall not be established within a
      class.  As used in this section, "insurer's estate" 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 against the insurer for
      liability for bodily injury or for injury to or destruction of
      tangible property which are not under policies, claims of a guaranty
      association or foreign guaranty association, claims under funding
      agreements as provided in section 508.31A, subsection 3, claims for
      an insufficiency in the assets allocated to and accumulated in a
      separate account as provided in section 508A.1, subsection 8, and
      claims for unearned premium.  Claims under life insurance and 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 provided by other benefits or advantages
      recovered by the claimant, shall not be included in this class, other
      than benefits or advantages recovered or recoverable in discharge of
      familial obligations of support or by way of succession at death or
      as proceeds of life insurance, or as 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 payment for 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 petition for rehabilitation.  Officers and
      directors are not entitled to the benefit of this priority.  The
      priority is in lieu of other similar priority which may be authorized
      by law as to wages or compensation 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 class only to the
      extent of the pecuniary loss sustained from the act, transaction, or
      proceeding out of which the penalty or forfeiture arose, with
      reasonable and actual costs incurred.  The remainder 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 are limited 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