Mass. Gen. Laws ch. 175 § 180F

Current through Chapters 1 to 249 and Chapters 253 to 255 of the 2024 Legislative Session

Section 175:180F - Proof of claims of non-residents; priorities of distribution

In any liquidation proceeding begun in this commonwealth against an insurer domiciled in this commonwealth, and transacting business in any other reciprocal state, claimants residing in a reciprocal state may file and prove claims either with the ancillary receiver, if any, or with the domiciliary receiver; provided, that all such claims shall be filed on or before the last date fixed by the court for the filing of claims in the domiciliary proceeding.

In any such proceeding, contested claims belonging to claimants residing in such reciprocal state either (a) may be proved in this commonwealth under the law of this commonwealth, or (b), if ancillary proceedings have been commenced in such reciprocal state, may be proved in such ancillary proceedings.

In the event a claimant elects to prove his claim in ancillary proceedings, if notice of the claim and opportunity to appear and to be heard is afforded the domiciliary receiver of the commonwealth as provided in section one hundred and eighty I with respect to ancillary proceedings in the commonwealth, the final allowance of such claim by the courts of the ancillary state shall be accepted in the commonwealth as conclusive as to its amount and priority, if any, against special deposits or other security located within the ancillary state. In a delinquency proceeding against an insurer domiciled in the commonwealth, claims owing to residents of ancillary states shall be preferred claims if like claims are preferred under the laws of the commonwealth. All such claims, whether owing to residents or nonresidents, shall be given equal priority of payment from general assets regardless of where such assets are located.

In a delinquency proceeding against an insurer domiciled in a reciprocal state, claims owing to residents of the commonwealth shall be preferred if like claims are preferred by the laws of the state.

The priority of distribution from the general assets of an insurer in a liquidation proceeding shall be in the order set forth below. Every claim in each priority class shall, subject to such limitations as may be prescribed by law and that do not directly conflict with the express provisions of this section, be paid in full or adequate funds shall be retained for such payment before the members of the next class receive any payment. Except as otherwise expressly provided in this section, no subclasses shall be established within any of the first six priority classes. The order of distribution of claims shall be:

(1) expenses of administration;

(2) claims of policyholders, beneficiaries and insureds arising from and within the coverage of and not in excess of the applicable limits of insurance policies and insurance contracts issued by the company and claims presented by the Massachusetts Insurers Insolvency Fund, the Massachusetts Life and Health Insurance Guaranty Association or any similar organization in another state, but the workers' compensation claims afforded a preference in section 46A shall be treated as preferred only as respects all other claims in this clause;

(3) claims for return premiums under section 46;

(4) claims of the federal government other than those included in class 2 or 3;

(5) compensation of employees other than officers for services rendered within three months prior to the commencement of a proceeding under section 180C not to exceed $1,000 for each such employee;

(6) claims for taxes and debts due to any state or local government, which are secured by liens perfected prior to the commencement of delinquency proceedings; and

(7) all other claims.

During the pendency of delinquency proceedings in the commonwealth or any other state, no action or proceeding in the nature of an attachment, garnishment, or levy on execution shall be commenced or maintained in the courts of the commonwealth against the delinquent insurer or its assets. Any lien obtained by any such action or proceeding within four months prior to the commencement of any such delinquency proceeding or any time thereafter shall be void as against any rights arising in such delinquency proceeding.

Separate account agreements providing that the assets in separate accounts to which such agreements relate shall not be chargeable with liabilities arising out of any other business of the insurer shall, to the extent of the reserves and other contract liabilities with respect to such agreements, be satisfied out of the assets available in the related separate accounts, subject to the claims of creditors for services rendered or credit extended with respect to such separate accounts. Such claims shall be payable in accordance with their terms, and to the extent, if any, that the insurer's obligations under such separate account agreements are not fully discharged by the assets available in such separate accounts, such deficiency shall be treated as a claim against the general assets of the life insurance company with the same priority as claims of policyholders, beneficiaries and insureds pursuant to the priority class set forth in clause (2) of the fifth paragraph.

Mass. Gen. Laws ch. 175, § 180F

Amended by Acts 2000, c. 78, §§ 6, 7, eff. 7/27/2000.

Section 8, Acts 2000, c. 78, states, "Section 6 of this act shall apply to all pending and future claims in liquidation proceedings pending on the effective date of this act and to claims in liquidation proceedings filed after the effective date of this act. "