The American Bonding Casualty Company was an Iowa corporation. It had on deposit with the Insurance Department of Iowa capital assets amounting to $703,250 "for the protection of policy holders of said Company." The purpose of this deposit and the rights of policy holders in it were the subject of the suit before this Court under the title of State v. American Bonding Casualty Company, 206 Iowa 988, the opinion and record in which are by stipulation made a part of the record in this case. On December 20, 1919, these two corporations agreed to consolidate " into a single new corporation under the name of the American Bonding Casualty Company" (the same name as that of the then existing Iowa company).

Thus, its courts have declared that even a voluntary deposit of securities with the Commissioner, made generally "for the protection of policyholders", though not required by law, will, on insolvency, constitute a trust in favor of the policy holders, as against the company and its other creditors. State ex rel. Gibson v. American Bonding Casualty Co., 206 Iowa 988, 221 N.W. 585, 586. It has further been held in Iowa that, in case of the insolvency of a foreign insurance company, "The well-settled rule in this state is that the claim of a foreign receiver to funds of the corporation found in this state will not be recognized even by way of comity if the result would be to relegate the creditors of the corporation in this state to the relief to which they would be entitled in a foreign jurisdiction, when there are funds of the corporation in the state from which such claims may be satisfied". Shloss v. Metropolitan Surety Co., 149 Iowa 382, 128 N.W. 384, 385. Without any attempted consideration of this holding here, we refer to it merely as further emphasizing a manifest policy of state protectiveness in insurance company insolvencies and liquidations.

l. Attorney General v. Life Reserve Association, 150 N.Y. 94, 45 N.E. 8; Commonwealth ex rel. Attorney General v. American Life Insurance Company, by the Supreme Court of Pennsylvania, 162 Pa. 586, 29 A. 660; People v. Metropolitan Surety Co., 205 N.Y. 135, 98 N.E. 412, Ann. Cas. 1913d 1180; Fogg v. Supreme Lodge of United Order of Golden Lion, 159 Mass. 9, 33 N.E. 692; Burdon v. Massachusetts Safety Fund Association, 147 Mass. 360, 17 N.E. 874, 1 L.R.A. 146; Boston A.R. Co. v. Mercantile Trust Deposit Co., by the Court of Appeals of Maryland, 82 Md. 535; 34 A. 778; Todd v. German-American Insurance Co., 2 Ga. App. 789, 59 S.E. 94; Fuller v. Wright, Insurance Commissioner, 147 Ga. 70, 92 S.E. 873, L.R.A. 1917E, 1139; Johnson v. Button, Insurance Commissioner, 120 Va. 339, 91 S.E. 151; Lucas v. Pittsburgh Life Trust Co., by the Supreme Court of Appeals of Virginia, 137 Va. 255, 119 S.E. 109; State ex rel. Gibson v. American Bonding Co., by the Supreme Court of Iowa, 206 Iowa, 988, 221 N.W. 585. Counsel for the Federico Company contend, however — and we have concluded that the judge who tried this case was right in sustaining the contention — that the general rule that a judicial decree appointing a receiver or liquidator for an insolvent insurance company terminates the outstanding insurance policies is not applicable to a case where the court that rendered the decree had not jurisdiction over the person of the policyholder, and especially where the latter had no notice of the decree, and hence no opportunity to protect himself by obtaining other insurance.

Even, however, if the deposit had not been grounded on a statutory prescription and a valid recognition of, and agreement to continue, that status, but had been simply a voluntary deposit made by the Michigan Company for the protection of the policyholders of the Iowa Company, it would have had equal significance and effect under Iowa law. State ex rel. Gibson v. American Bonding Casualty Co., 206 Iowa 988, 221 N.W. 585. In this situation, the receiver of the Michigan Company clearly can have no other right in the matter than to receive any remaining surplus from the securities, after the lien rights have been satisfied, or to claim the reserve apportionment of any policyholders to whose rights he has succeeded by surrender of the policy or by equitable subrogation. It is admitted here that the securities involved are not equal in value to the net cash value of the policies.

Credit Lyonnais's appropriate remedy, therefore, is a return of unearned premiums. Newman v. Hatfield Wire Cable Co., 113 N.J.L. 484, 174 A. 491 (E A 1934); Broadway Bank Trust Co. v. New JerseyProperty-Liability Ins. Guaranty Ass'n, 146 N.J. Super. 80, 368 A.2d 983 (Law Div. 1976); State v. American Bonding Casualty Co., 206 Iowa 988, 221 N.W. 585 (1928); Moren v.Ohio Valley Fire Marine Ins. Co.'s Receiver, 224 Ky. 643, 6 S.W.2d 1091 (1928); Green v. American Life Accident Ins.Co., 112 S.W.2d 924 (Mo.App. 1938); cf. Tuttle v. State Mut.Liability Ins. Co., 2 N.J. Misc. 973, 127 A. 682 (Ch.Ct. 1924) (applying same principle to mutual insurance company where policy so provided). Return of unearned premiums is the appropriate award even if the policy does not appear to provide for such refunds. See Johnson v. Button, 120 Va. 339, 91 S.E. 151 (1917).

Various issues arising in said receivership have been heretofore before this court. State ex rel. v. American Bonding Casualty Co., 206 Iowa 988, 221 N.W. 585; State ex rel. v. American Bonding Casualty Co., Morris Company, claimants, 213 Iowa 197, 238 N.W. 731; State ex rel. v. American Bonding Casualty Co., 213 Iowa 200, 238 N.W. 726; Id., 213 Iowa 211, 238 N.W. 709. The facts fully appear in the cited cases and will not again be repeated. Morris Co., the appellant herein, filed its claims with the receiver for a balance claimed to be due it after the application of certain dividends amounting to 26 1/2 per cent paid to it through the receivership of the Chicago Bonding Insurance Company. The trial court disallowed such claim, and the claimant appealed from such order and ruling to this court and secured a reversal thereof.

v. Life Reserve Association, 150 N.Y. 94, 45 N.E. 8; Commonwealth ex rel. [Kirkpatrick] Attorney General v. American Life Insurance Company, by the Supreme Court of Pennsylvania, 162 Pa. 586, 29 A. 660 [42 Am.St. Rep. 844]; People v. Metropolitan Surety Co., 205 N.Y. 135, 98 N.E. 412, Ann.Cas. 1913d 1180; Fogg v. Supreme Lodge of United Order of Golden Lion, 159 Mass. 9, 33 N.E. 692; Burdon v. Massachusetts Safety Fund Association, 147 Mass. 360, 17 N.E. 874, 1 L.R.A. 146; Boston A. R. Co. v. Mercantile Trust Deposit Co., by the Court of Appeals of Maryland, 82 Md. 535, 34 A. 778; Todd v. German-American Insurance Co., 2 Ga. App. 789, 59 S.E. 94; Fuller v. Wright, Insurance Commissioner, 147 Ga. 70, 92 S.E. 873, L.R.A. 1917E, 1139; Johnson v. Button, Insurance Commissioner, 120 Va. 339, 91 S.E. 151; Lucas v. Pittsburgh Life Trust Co., by the Supreme Court of Appeals of Virginia, 137 Va. 255, 119 S.E. 109; State ex rel, Gibson v. American Bonding Co., by the Supreme Court of Iowa, 206 Iowa 988, 221 N.W. 585." The Court then held that the general rule was not applicable and in departing from the general rule held:

Such assets were a trust fund for the benefit of policyholders 10. in the event of insolvency. Couch's Cyclopedia of Insurance Law, Vol. 8, § 2043, p. 6692; State v. American Bond. Cas. Co. (1928), 206 Iowa 988, 221 N.W. 585; In re Liquidation of Inter-State Exchange (1933), 211 Wis. 258, 247 N.W. 839; People ex rel. Palmer v. State Life of Illinois (1938), 296 Ill. App. 337, 15 N.E.2d 985. Appellant's decedent having transferred his stock certificates for value with a blank indorsement and delivered them to the Federal Underwriters, Inc., with knowledge that they were 11.

The court held he was not entitled to a preference. See also State v. American Bonding Casualty Co., 206 Iowa 988, 221 N.W. 585; O'Neil v. Burnett, 263 Pa. 216, 106 A. 246. Our conclusion is that under the authorities and the state of the record, the chancellor did not err in denying appellants' claim of set-off. For the reasons indicated the decree of the superior court is affirmed.