(a) Within 120 days of a final determination of insolvency of an insurance company by a court of competent jurisdiction the receiver shall make application to the said court for approval of a proposal to disburse assets out of such company's marshalled assets, from time to time as such assets become available, to the Alabama Insurance Guaranty Association and to any entity or person performing a similar function in another state. (The Alabama Insurance Guaranty Association and any entity or person performing a similar function in other states shall hereinafter be referred to collectively as the associations.)
(b) Such proposal shall at least include provisions for:
(1) Reserving amounts for the payment of expenses of administration and claims falling within the priorities established in the Alabama Uniform Insurers Liquidation Act but only with respect to such priorities higher than that of the associations;
(2) Disbursement of the assets marshalled to date and subsequent disbursement of assets as they become available;
(3) Equitable allocation of disbursements to each of the associations entitled thereto;
(4) The securing by the receiver from each of the associations entitled to disbursements pursuant to this section of an agreement to return to the receiver such assets previously disbursed as may be required to pay claims of secured creditors and claims with a higher priority than those of the associations. No bond shall be required of any such association.
(c) The receiver's proposal shall provide for disbursements to the associations in amounts at least equal to the payments made or to be made thereby for which such associations could assert claims against the receiver, and shall further provide that if the assets available for disbursement from time to time do not equal or exceed the amount of such payments made or to be made by the associations then disbursements shall be in the amount of available assets.
(d) Notice of such application shall be given to the associations in and to the commissioners of insurance of each of the states. Any such notice shall be deemed to have been given when deposited in the United States certified mails, first-class postage prepaid, at least 30 days prior to submission of such application to the said court. Action on the application may be taken by the said court provided the above required notice has been given and provided further that the receiver's proposal complies with subdivisions (1) and (4) of subsection (b) of this section.
Structure Code of Alabama
Chapter 42 - Insurance Guaranty Association.
Section 27-42-1 - Short Title.
Section 27-42-2 - Purpose of Chapter.
Section 27-42-3 - Applicability of Chapter.
Section 27-42-4 - Construction of Chapter.
Section 27-42-5 - Definitions.
Section 27-42-6 - Association Created; Member Insurers; Accounts.
Section 27-42-7 - Board of Directors; Selection; Vacancies; Expenses.
Section 27-42-8 - Powers and Duties.
Section 27-42-8.1 - Maximum Assessment.
Section 27-42-9 - Plan of Operation.
Section 27-42-10 - Duties and Powers of the Commissioner; Judicial Review.
Section 27-42-11 - Settlement and Payment of Claims; Recovery.
Section 27-42-12 - Exhaustion of Rights; Nonduplication of Recovery.
Section 27-42-13 - Prevention of Insolvencies; Examinations of Insurers; Reports.
Section 27-42-14 - Examination of the Association; Financial Report.
Section 27-42-15 - Tax Exemption.
Section 27-42-16 - Credits for Assessments Paid; Disposition of Refunds Previously Offset.
Section 27-42-18 - Stay of Proceedings; Access of Board to Records of Insurers.