Ohio Revised Code
Chapter 3903 | Reserve Valuation; Rehabilitation and Liquidation
Section 3903.42 | Priority of Distribution of Claims.

Effective: March 22, 2012
Latest Legislation: House Bill 250 - 129th General Assembly
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 in this section. Every claim in each class shall be paid in full or adequate funds retained for such payment before the members of the next class receive any payment. No subclasses shall be established within any class. The order of distribution of claims shall be:
(A) Class 1. The costs and expenses of administration, including but not limited to the following:
(1) The actual and necessary costs of preserving or recovering the assets of the insurer;
(2) Compensation for all services rendered in the liquidation;
(3) Any necessary filing fees;
(4) The fees and mileage payable to witnesses;
(5) Reasonable attorney's fees;
(6) The reasonable expenses of a guaranty association or foreign guaranty association in handling claims.
(B) Class 2. All claims under policies for losses incurred, including third party claims, all claims of contracted providers against a medicaid health insuring corporation for covered health care services provided to medicaid recipients, all claims against the insurer for liability for bodily injury or for injury to or destruction of tangible property that are not under policies, and all claims of a guaranty association or foreign guaranty association. All 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 any 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. No payment by an employer to an employee shall be treated as a gratuity. Claims under nonassessable policies for unearned premium or other premium refunds.
(C) Class 3. Claims of the federal government.
(D) Class 4. Debts due to employees for services performed to the extent that they do not exceed one thousand dollars and represent payment for services performed within one year before the filing of the complaint for liquidation. Officers and directors shall not be entitled to the benefit of this priority. Such priority shall be in lieu of any other similar priority that may be authorized by law as to wages or compensation of employees.
(E) Class 5. Claims of general creditors.
(F) Class 6. Claims of any state or local government. Claims, including those of any state or local governmental body for a penalty or forfeiture, shall be 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 occasioned thereby. The remainder of such claims shall be postponed to the class of claims under division (J) of this section.
(G) Class 7. Claims filed late or any other claims other than claims under divisions (H), (I), and (J) of this section.
(H) Class 8. Surplus or contribution notes, or similar obligations, and premium refunds on assessable policies. Payments to members of domestic mutual insurance companies shall be limited in accordance with law.
(I) Class 9. Interest at the legal rate compounded annually on all claims in the classes prescribed in divisions (A) to (H) of this section, except for claims of the federal government, from the date of the order for liquidation or the date on which the claim becomes due, whichever is later, until the date on which the interest or dividend is declared, according to the terms of a plan proposed by the liquidator and approved by the court supervising the liquidation. The liquidator, with the approval of the court, may make reasonable approximate computations of interest to be paid under this division.
(J) Class 10. The claims of shareholders or other owners.
If any provision of this section or the application of any provision of this section to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this section, and to this end the provisions are severable.
(K) As used in sections 3903.42 and 3903.421 of the Revised Code, "contracted provider" and "medicaid recipient" have the same meanings as in section 3903.14 of the Revised Code.

Structure Ohio Revised Code

Ohio Revised Code

Title 39 | Insurance

Chapter 3903 | Reserve Valuation; Rehabilitation and Liquidation

Section 3903.01 | Reserve Valuation - Rehabilitation and Liquidation Definitions.

Section 3903.02 | Citing of Act - Purpose of Act.

Section 3903.03 | Application of Sections.

Section 3903.04 | Jurisdiction.

Section 3903.05 | Temporary Restraining Orders - Injunctions.

Section 3903.06 | Duty of Persons Exercising Control to Cooperate With Superintendent.

Section 3903.07 | Responsibilities of Superintendent and Deputies.

Section 3903.08 | Effect on Pending Proceedings.

Section 3903.09 | Correction Orders Issued by Superintendent.

Section 3903.10 | Complaint - Court May Issue Ex Parte Seizure or Other Order.

Section 3903.11 | Confidentiality of Information - Exceptions.

Section 3903.12 | Grounds for Rehabilitation Order.

Section 3903.13 | Rehabilitation Orders.

Section 3903.14 | Employment of Special Deputies.

Section 3903.15 | Stay of Actions - Statute of Limitations - Standing.

Section 3903.16 | Motion for Order of Liquidation - Order Terminating Rehabilitation of Insurer.

Section 3903.17 | Basis for Liquidation Order.

Section 3903.18 | Liquidation Orders.

Section 3903.19 | Effect of Liquidation Order on Policies.

Section 3903.20 | Dissolution of Corporate Existence.

Section 3903.21 | Liquidator - Powers and Duties.

Section 3903.22 | Notice of Liquidation Order.

Section 3903.24 | Civil Action Against Liquidator or Insurer.

Section 3903.25 | Duplicate List of Insurer's Assets.

Section 3903.26 | Transfers and Obligations Incurred One Year Prior to Proceeding.

Section 3903.27 | Transfers Made After Filing of Complaint.

Section 3903.28 | Preferences.

Section 3903.29 | Allowance of Claims.

Section 3903.30 | Allowance of Setoffs and Counterclaims.

Section 3903.301 | Protection of Rights.

Section 3903.31 | Report of Liquidator to Court.

Section 3903.32 | Reducing Recovery From Reinsurer.

Section 3903.33 | Payment of Unpaid Earned Premiums.

Section 3903.34 | Proposal to Disburse Assets to Guaranty Associations - Contents - Application for Approval.

Section 3903.35 | Proof of Claims to Be Filed With Liquidator.

Section 3903.36 | Proof of Claim Contents.

Section 3903.37 | Contingent Claims- Absolute Claims.

Section 3903.38 | Third Party-Party Claims.

Section 3903.39 | Written Notice of Denial of Claim.

Section 3903.40 | Claims Secured by Undertaking of Another Person.

Section 3903.41 | Methods of Determining Value of Security Held by Secured Creditor.

Section 3903.42 | Priority of Distribution of Claims.

Section 3903.421 | Medicaid Health Insuring Corporation Bond and Securities.

Section 3903.43 | Review and Investigation of Claims.

Section 3903.44 | Court Payment of Distributions.

Section 3903.45 | Distribution of Unclaimed and Withheld Funds.

Section 3903.46 | Discharge of Liquidator.

Section 3903.47 | Motion to Reopen Proceedings.

Section 3903.48 | Court to Direct Retention or Destruction of Insurer's Records.

Section 3903.49 | Audit of Books of Proceeding.

Section 3903.50 | Order Appointing Conservator.

Section 3903.51 | Order Directing Liquidation.

Section 3903.52 | Power of Domiciliary Liquidator.

Section 3903.53 | Appointing Ancillary Receiver.

Section 3903.54 | Discretion of Superintendent to Commence Proceedings.

Section 3903.55 | Foreign Claimants.

Section 3903.56 | Ohio Residents Claiming Against Foreign Insurers.

Section 3903.57 | Attachment, Garnishment or Execution Proceedings Blocked.

Section 3903.58 | Distribution Order Among Claimants From Reciprocal States.

Section 3903.59 | Failure to Transfer Assets to Ohio Liquidator by Ancillary Receiver.

Section 3903.71 | Unsound Company, Suspension of Authority to Do Business.

Section 3903.72 | Definitions for Sections 3903.72 to 3903.7211.

Section 3903.721 | Valuation of Reserves.

Section 3903.722 | Submission of Data Prior to Operative Date of Valuation Manual.

Section 3903.723 | Minimum Standards for the Valuation of Policies.

Section 3903.724 | Determination of Valuation Interest Rate.

Section 3903.725 | Valuation for Individual Annuity and Pure Endowment Contracts.

Section 3903.726 | Submissions Prior to Operative Date of Valuation Manual.

Section 3903.727 | Valuation for Accident and Health Insurance Contracts.

Section 3903.728 | Policies Issued on or After the Operative Date of the Valuation Manual.

Section 3903.729 | Established Reserves; Principle-Based Valuation.

Section 3903.7210 | Submission of Prescribed Data.

Section 3903.7211 | Confidential Information.

Section 3903.73 | Deposit of Securities With Treasurer of State.

Section 3903.74 | Sale and Distribution of Securities of Defaulting Companies.

Section 3903.75 | Notice to Claimants.

Section 3903.76 | Court Procedure.

Section 3903.77 | Property and Casualty Insurance Reporting Requirements.

Section 3903.81 | Risk-Based Capital for Insurers Model Act Definitions.

Section 3903.82 | Annual Report.

Section 3903.83 | Duty to Submit Plan.

Section 3903.84 | Regulatory Action Level Event Duties of Superintendent and Insurer.

Section 3903.85 | Authorized Control Level Event Duties of Superintendent and Insurer.

Section 3903.86 | Mandatory Control Level Event Duties of Superintendent and Insurer.

Section 3903.87 | Right to Request Hearing.

Section 3903.88 | Confidential Information.

Section 3903.89 | Effectiveness of Notice.

Section 3903.90 | Annual Report by Foreign Insurer.

Section 3903.91 | Regulatory Officials - Immunity.

Section 3903.92 | Requirements for Exempting Insurer From Sections.

Section 3903.93 | Rules.

Section 3903.99 | Penalty.