NY Ins L § 7435 (2021)
2021 New York Laws ISC - Insurance Article 74 - Rehabilitation, Liquidation, Conservation and Dissolution of Insurers 7435 - Distribution for Life Insurers.

§   7435.   Distribution  for  life  insurers.  (a)  The  priority  of distribution of claims from the estate of a life  insurance  company  in any  proceeding  subject to this article shall be in accordance with the order in which each class of claims is herein set forth. Every claim  in each  class  shall,  subject to such limitations as may be prescribed by law and do not directly conflict with the  express  provisions  of  this section,  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:  (1)  Class  one. Claims with respect to the actual and necessary costs and  expenses   of   administration,   incurred   by   the   liquidator, rehabilitator,   conservator   or  ancillary  rehabilitator  under  this article, or by The Life  Insurance  Guaranty  Corporation  or  The  Life Insurance Company Guaranty Corporation of New York, and claims described in  subsection  (d)  of section seven thousand seven hundred thirteen of this chapter.  (2) Class two. Debts due to employees for services  performed  to  the extent  that  they  do  not  exceed one thousand two hundred dollars and represent payment for services performed  within  one  year  before  the commencement  of a proceeding under this article. Such priority shall be in lieu of any other similar priority which may be authorized by law  as to wages or compensation of employees.  (3)  Class  three.  All  claims  for  payment  for  goods furnished or services rendered to the impaired or insolvent insurer in  the  ordinary course  of  business  within  ninety days prior to the date on which the insurer was  determined  to  be  impaired  or  insolvent,  whichever  is applicable.  (4) Class four. All claims under insurance policies, annuity contracts and  funding  agreements,  and  all claims of The Life Insurance Company Guaranty Corporation of New York or any other  guaranty  corporation  or association of this state or another jurisdiction, other than (i) claims provided  for  in  paragraph one of this subsection, and (ii) claims for interest.  (5)  Class  five.  Claims  of  the  federal  or  any  state  or  local government.  Claims,  including  those  of  any  governmental body for a penalty or forfeiture, shall be allowed to 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  paragraph  eight  of  this subsection.  (6)  Class six. Claims of general creditors and any other claims other than claims under paragraphs seven and eight of this subsection.  (7) Class seven. Surplus, capital or contribution  notes,  or  similar obligations.  (8)  Class  eight.  The claims of (i) policyholders, other than claims under paragraph four of this subsection, and (ii) shareholders or  other owners.  (b)  Every  claim  under  a  separate  account agreement providing, in effect, that the assets in the separate account shall not be  chargeable with  liabilities arising out of any other business of the insurer shall be satisfied out of the assets in the  separate  account  equal  to  the reserves  maintained  in  such  account  for  such agreement and, to the extent, if any, not fully discharged thereby,  shall  be  treated  as  a class four claim against the estate of the life insurance company.  (c) For purposes of this section:  (1) "The  estate of the life insurance company" shall mean the general assets of such company less any assets held in separate  accounts  that, pursuant to section four thousand two hundred forty of this chapter, are not chargeable with liabilities arising out of any other business of the insurer.  (2) "Insurance  policies,  annuity  contracts  and funding agreements" shall mean all policies and contracts of any of the kinds  of  insurance specified  in  paragraph  one, two or three of subsection (a) of section one thousand one hundred  thirteen  of  this  chapter  and  all  funding agreements described in section three thousand two hundred twenty-two of this  chapter,  including  all  separate account agreements, except that separate account agreements  referred  to  in  subsection  (b)  of  this section shall be included only to the extent referred to therein.  (3) "Separate   account   agreement  or  agreements"  shall  mean  any agreement or agreements for separate accounts  referred  to  in  section four thousand two hundred forty of this chapter.