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2023 Iowa Code › Title XIII - COMMERCE › Chapter 507C - INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION › Section 507C.16 - Termination of rehabilitation.

507C.16 Termination of rehabilitation.
1. Whenever the commissioner determines that further attempts to rehabilitate an insurer would substantially increase the risk of loss to creditors, policyholders, or the public, or would be futile, the commissioner may petition the district court for an order of liquidation. A petition under this subsection shall have the same effect as a petition under section 507C.17. The court shall permit the directors of the insurer to take actions as are reasonably necessary to defend against the petition and may order payment from the estate of the insurer of costs and other expenses of defense as justice may require.
2. The rehabilitator may at any time petition the district court for an order terminating rehabilitation of an insurer. The directors of the insurer may petition the court for an order terminating rehabilitation of the insurer and the court may order payment from the estate of the insurer of costs and other expenses of the petition as justice may require. If the court finds that rehabilitation has been accomplished and that grounds for rehabilitation under section 507C.12 no longer exist, it shall order that the insurer be restored to possession of its property and the control of its business. The court may also terminate the rehabilitation at any time upon its own motion.
3. If the payment of obligations pursuant to a policy issued by the insurer is suspended in substantial part for a period of six months at any time after the appointment of the rehabilitator, and the rehabilitator has not filed an application for a plan pursuant to section 507C.14, subsection 4, the rehabilitator shall petition the court for an order of liquidation on grounds of insolvency.
84 Acts, ch 1175, §16; 92 Acts, ch 1117, §18
2023 Iowa Code › Title XIII - COMMERCE › Chapter 507C - INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION › Section 507C.17 - Grounds for liquidation.

507C.17 Grounds for liquidation.
The commissioner may petition the district court for an order directing the commissioner to liquidate a domestic insurer or an alien insurer domiciled in this state on any of the following grounds:
1. Any ground for an order of rehabilitation specified in section 507C.12 whether or not there has been a prior order directing the rehabilitation of the insurer.
2. That the insurer is insolvent.
3. That the insurer is in a condition that the further transaction of business would be hazardous, financially or otherwise, to its policyholders, its creditors, or the public.
84 Acts, ch 1175, §17
Referred to in §507C.9, 507C.16, 507C.51
2023 Iowa Code › Title XIII - COMMERCE › Chapter 507C - INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION › Section 507C.19 - Continuance of coverage.

507C.19 Continuance of coverage.
1. Except for life or health insurance or annuities, policies in effect at the time of issuance of an order of liquidation shall continue in force only for the lesser of:
a. A period of thirty days from the date of entry of the liquidation orders.
b. The expiration of the policy coverage.
c. The date when the insured has replaced the insurance coverage with equivalent insurance in another insurer or otherwise terminated the policy.
d. The liquidator has effected a transfer of the policy obligation pursuant to section 507C.21, subsection 1, paragraph “h”.
2. An order or liquidation under section 507C.18 shall terminate coverages at the time specified in subsection 1 for purposes of any other statute.
3. Policies of life or health insurance or annuities shall continue in force for the period and under terms as is provided for by any applicable guaranty association or foreign guaranty association.
4. Policies of life or health insurance or annuities or any period or coverage of the policies not covered by a guaranty association or foreign guaranty association shall terminate under subsections 1 and 2.
84 Acts, ch 1175, §19
Referred to in §507C.18, 507C.23
2023 Iowa Code › Title XIII - COMMERCE › Chapter 507C - INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION › Section 507C.20 - Dissolution or sale of insurer.

507C.20 Dissolution or sale of insurer.
The commissioner may petition for an order dissolving the corporate existence of a domestic insurer or the United States branch of an alien insurer domiciled in this state at the time the commissioner applies for a liquidation order. The court shall order dissolution of the corporation upon petition by the commissioner upon or after the granting of a liquidation order. If the dissolution has not previously been ordered, it shall be effected by operation of law upon the discharge of the liquidator if the insurer is insolvent. However, dissolution may be ordered by the court upon the discharge of the liquidator if the insurer is under a liquidation order for some other reason. Notwithstanding the above, upon application by the commissioner and following notice as prescribed by the court and a hearing, the court may sell the corporation as an entity, together with any of its licenses to do business, despite the entry of an order of liquidation. The sale may be made on terms and conditions the court deems appropriate. However, the order approving the sale shall provide that the proceeds of the sale shall become part of the assets of the liquidation estate, to be distributed in the manner set forth in section 507C.42, and that the corporate entity and its licenses shall thereafter be free and clear from the claims or interests of all claimants, creditors, policyholders, and stockholders of the corporation under liquidation.
84 Acts, ch 1175, §20; 87 Acts, ch 168, §1; 88 Acts, ch 1112, §502
Referred to in §507C.21
2023 Iowa Code › Title XIII - COMMERCE › Chapter 507C - INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION › Section 507C.20A - Redomestication of foreign insurer.

507C.20A Redomestication of foreign insurer.
The commissioner may petition the court for an ancillary receivership or for an order redomesticating a foreign insurer which is the subject of a liquidation or other delinquency order in a reciprocal state. Only the corporate charter and rights to the licenses under such charter shall be redomesticated to Iowa. All claims against the foreign insurer shall remain a part of and be administered through the reciprocal state liquidation or other delinquency proceeding. Following notice as prescribed by the court and a hearing, the court may sell the corporation as an entity, together with any of its licenses, free and clear from the claims or interests of all claimants, creditors, policyholders, and stockholders of the corporation under liquidation or other delinquency proceedings, wherever located. The sale may be made on terms and conditions the court deems appropriate. The proceeds of the sale, less court costs, attorney fees, broker’s fees, and the commissioner’s expenses in effectuating the sale, shall become part of the assets of the liquidation or other estate in the reciprocal state.
91 Acts, ch 213, §2
2023 Iowa Code › Title XIII - COMMERCE › Chapter 507C - INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION › Section 507C.22 - Notice to creditors and others.

507C.22 Notice to creditors and others.
1. Unless the court otherwise directs, the liquidator shall give notice of the liquidation order as soon as possible by doing all of the following:
a. By first class mail and either by telegram or telephone to the insurance commissioner of each jurisdiction in which the insurer is doing business.
b. By first class mail to a guaranty association or foreign guaranty association which is or may become obligated as a result of the liquidation.
c. By first class mail to all insurance agents of the insurer.
d. By first class mail to all persons known or reasonably expected to have claims against the insurer, including policyholders, by mailing a notice to their last known address as indicated by the records of the insurer.
e. By publication in a newspaper of general circulation in the county in which the insurer has its principal place of business and in other locations as the liquidator deems appropriate.
2. Notice to potential claimants under subsection 1 shall require claimants to file with the liquidator their claims together with proper proofs of the claim under section 507C.36 on or before a date the liquidator shall specify in the notice. The liquidator need not require persons claiming cash surrender values or other investment values in life insurance and annuities to file a claim. Claimants shall keep the liquidator informed of changes of address.
3. a. Notice to agents of the insurer and potential claimants who are policyholders under subsection 1, where applicable, shall include notice that coverage by state guaranty associations may be available for all or part of policy benefits in accordance with applicable state guaranty laws.
b. The liquidator shall promptly provide to the guaranty associations such information concerning the identities and addresses of the policyholders and their policy coverages as may be within the liquidator’s possession or control, and otherwise cooperate with guaranty associations to assist them in providing to the policyholders timely notice of the guaranty associations’ coverage of policy benefits including, as applicable, coverage of claims and continuation or termination of coverage.
4. If notice is given pursuant to this section, the distribution of assets of the insurer under this chapter shall be conclusive with respect to claimants, whether or not a claimant actually received notice.
84 Acts, ch 1175, §22; 92 Acts, ch 1117, §22
Referred to in §507C.23, 507C.35, 507C.38
2023 Iowa Code › Title XIII - COMMERCE › Chapter 507C - INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION › Section 507C.23 - Duties of agents.

507C.23 Duties of agents.
1. A person, who receives notice in the form prescribed in section 507C.22 that an insurer which the person represents as an agent is the subject of a liquidation order, shall within fifteen days of the notice give notice to each policyholder or other person named in a policy issued through the agent by the insurer of the liquidation order. The notice shall be sent by first class mail to the last address contained in the agent’s records if the agent has a record of the address of the policyholder or other person. A policy is issued through an agent if the agent has a property interest in the expiration of the policy, or if the agent has had in the agent’s possession a copy of the declarations of the policy at any time during the life of the policy, except where the ownership of the expiration of the policy has been transferred to another. The written notice shall include the name and address of the insurer, the name and address of the agent, identification of the policy impaired and the nature of the impairment including termination of coverage, as described in section 507C.19. Notice by a general agent satisfies the notice requirement for an agent under contract to the general agent. An agent obligated to give notice under this section shall file a report of compliance with the liquidator.
2. An agent failing to provide information as required in subsection 1 may be subject to payment of a penalty of not more than one thousand dollars and may have the agent’s license suspended. The penalty is to be imposed only after a hearing held by the commissioner.
3. The liquidator may waive the duties imposed by this section if the liquidator determines that another notice to the policyholders of the insurer under liquidation is adequate.
84 Acts, ch 1175, §23; 92 Acts, ch 1117, §23
2023 Iowa Code › Title XIII - COMMERCE › Chapter 507C - INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION › Section 507C.24 - Actions by and against liquidator.

507C.24 Actions by and against liquidator.
1. After the issuance of an order appointing a liquidator of a domestic insurer or of an alien insurer domiciled in this state, action at law or equity shall not be brought against the insurer or liquidator in this state or elsewhere, nor shall existing actions be maintained or further presented after issuance of the order. The courts of this state shall give full faith and credit to injunctions against the liquidator or the insurer or the continuation of existing actions against the liquidator or the insurer, when the injunctions are included in an order to liquidate an insurer issued pursuant to corresponding provisions in other states. Whenever in the liquidator’s judgment, protection of the estate of the insurer necessitates intervention in an action against the insurer that is pending outside this state, the liquidator may intervene in the action. The liquidator may defend, at the expense of the estate of the insurer, an action in which the liquidator intervenes under this section.
2. Within two years or such additional time as applicable law may permit, the liquidator may, after the issuance of an order for liquidation, institute an action or proceeding on behalf of the estate of the insurer upon any cause of action against which the period of limitation fixed by applicable law has not expired at the time of the filing of the petition upon which the order is entered. If a period of limitation is fixed by agreement for instituting a suit or proceeding upon a claim, or for filing a claim, proof of claim, proof of loss, demand, notice, or the like, or if in a proceeding, judicial or otherwise, a period of limitation is fixed in the proceeding or pursuant to applicable law for taking an action, filing a claim or pleading, or doing an act, and if the period had not expired at the date of the filing of the petition, the liquidator may, for the benefit of the estate, take any action or do any act, required of or permitted to the insurer, within a period of one hundred eighty days subsequent to the entry of an order for liquidation, or within a further period as is shown to the satisfaction of the court not to be unfairly prejudicial to the other party.
3. A statute of limitations or defense of laches shall not run with respect to an action against an insurer between the filing of a petition for liquidation against an insurer and the denial of the petition. An action against the insurer that might have been commenced when the petition was filed may be commenced for at least sixty days after the petition is denied.
4. A guaranty association or foreign guaranty association shall have standing to appear in a court proceeding concerning the liquidation of an insurer if the association is or may become liable to act as a result of the liquidation.
84 Acts, ch 1175, §24; 92 Acts, ch 1117, §24
2023 Iowa Code › Title XIII - COMMERCE › Chapter 507C - INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION › Section 507C.25 - Collection and list of assets.

507C.25 Collection and list of assets.
1. As soon as practicable after the liquidation order but not later than one hundred twenty days thereafter, the liquidator shall prepare in duplicate a list of the insurer’s assets. The list shall be amended or supplemented as the liquidator may determine. One copy shall be filed in the office of the clerk of the court and one copy shall be retained for the liquidator’s files. Amendments and supplements shall be similarly filed.
2. The liquidator shall reduce the assets to a degree of liquidity that is consistent with the effective execution of the liquidation.
3. A submission to the court for disbursement of assets in accordance with section 507C.34 fulfills the requirements of subsection 1.
84 Acts, ch 1175, §25
2023 Iowa Code › Title XIII - COMMERCE › Chapter 507C - INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION › Section 507C.26 - Fraudulent transfers prior to petition.

507C.26 Fraudulent transfers prior to petition.
1. A transfer made and an obligation incurred by an insurer within one year prior to the filing of a successful petition for rehabilitation or liquidation under this chapter is fraudulent as to then existing and future creditors if made or incurred without fair consideration, or with actual intent to hinder, delay, or defraud either existing or future creditors. A fraudulent transfer made or an obligation incurred by an insurer ordered to be rehabilitated or liquidated under this chapter may be avoided by the receiver, except as to a person who in good faith is a purchaser, lienor, or obligee for a present fair equivalent value. A purchaser, lienor, or obligee, who in good faith has given a consideration less than fair for such transfer, lien, or obligation, may retain the property, lien or obligation as security for repayment. The court may, on due notice, order any such transfer or obligation to be preserved for the benefit of the estate, and in that event, the receiver shall succeed to and may enforce the rights of the purchaser, lienor, or obligee.
2. a. A transfer of property other than real property is made when it becomes perfected so that a subsequent lien obtainable by legal or equitable proceedings on a simple contract could not become superior to the rights of the transferee under section 507C.28, subsection 3.
b. A transfer of real property is made when it becomes perfected so that a subsequent bona fide purchaser from the insurer could not obtain rights superior to the rights of the transferee.
c. A transfer which creates an equitable lien is not perfected if there are available means by which a legal lien could be created.
d. A transfer not perfected prior to the filing of a petition for liquidation shall be deemed to be made immediately before the filing of the successful petition.
e. This subsection applies whether or not there are or were creditors who might have obtained a lien or persons who might have become bona fide purchasers.
3. A transaction of the insurer with a reinsurer is fraudulent and may be avoided by the receiver under subsection 1 if both of the following exist:
a. The transaction consists of the termination, adjustment, or settlement of a reinsurance contract in which the reinsurer is released from any part of its duty to pay the originally specified share of losses that had occurred prior to the time of the transaction, unless the reinsurer gives a present fair equivalent value for the release.
b. Part of the transaction took place within one year prior to the date of filing of the petition through which the receivership was commenced.
4. A person receiving property from an insurer or any benefit from an insurer which is a fraudulent transfer under subsection 1 is personally liable for the property or benefit and shall account to the liquidator.
84 Acts, ch 1175, §26; 93 Acts, ch 88, §7
Referred to in §507C.14, 507C.21, 507C.35
2023 Iowa Code › Title XIII - COMMERCE › Chapter 507C - INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION › Section 507C.27 - Fraudulent transfer after petition.

507C.27 Fraudulent transfer after petition.
1. After a petition for rehabilitation or liquidation has been filed a transfer of real property of the insurer made to a person acting in good faith is valid against the receiver if made for a present fair equivalent value. If the transfer was not made for a present fair equivalent value, then the transfer is valid to the extent of the present consideration actually paid for which amount the transferee shall have a lien on the property transferred. The commencement of a proceeding in rehabilitation or liquidation is constructive notice upon the recording of a copy of the petition for or order of rehabilitation or liquidation with the recorder of deeds in the county where any real property in question is located. The exercise by a court of the United States or a state or jurisdiction to authorize a judicial sale of real property of the insurer within a county in a state shall not be impaired by the pendency of a proceeding unless the copy is recorded in the county prior to the consummation of the judicial sale.
2. After a petition for rehabilitation or liquidation has been filed and before either the receiver takes possession of the property of the insurer or an order of rehabilitation or liquidation is granted:
a. A transfer of the property, other than real property, of the insurer made to a person acting in good faith is valid against the receiver if made for a present fair equivalent value. If the transfer was not made for a present fair equivalent value, then the transfer is valid to the extent of the present consideration actually paid for which amount the transferee shall have a lien on the property transferred.
b. If acting in good faith, a person indebted to the insurer or holding property of the insurer may pay the debt or deliver the property, or any part thereof, to the insurer or upon the insurer’s order as if the petition were not pending.
c. A person having actual knowledge of the pending rehabilitation or liquidation is not acting in good faith.
d. A person asserting the validity of a transfer under this section shall have the burden of proof. Except as provided in this section, a transfer by or on behalf of the insurer after the date of the petition for liquidation by any person other than the liquidator shall not be valid against the liquidator.
3. A person receiving any property from the insurer or any benefit of the insurer which is a fraudulent transfer under subsection 1 is personally liable for the property or benefit and shall account to the liquidator.
4. This chapter shall not impair the negotiability of currency or negotiable instruments.
84 Acts, ch 1175, §27; 92 Acts, ch 1117, §25
Referred to in §507C.14, 507C.21, 507C.35
2023 Iowa Code › Title XIII - COMMERCE › Chapter 507C - INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION › Section 507C.29 - Claims of holders of void or voidable rights.

507C.29 Claims of holders of void or voidable rights.
1. A claim of a creditor who has received or acquired a preference, lien, conveyance, transfer, assignment, or encumbrance, voidable under this chapter shall not be allowed unless the creditor surrenders the preference, lien, conveyance, transfer, assignment, or encumbrance. If the avoidance is effected by a proceeding in which a final judgment has been entered, the claim shall not be allowed unless the money is paid or the property is delivered to the liquidator within thirty days from the date of the entering of the final judgment. However, the court having jurisdiction over the liquidation may allow further time if there is an appeal or other continuation of the proceeding.
2. A claim allowable under subsection 1 by reason of a voluntary or involuntary avoidance, preference, lien, conveyance, transfer, assignment, or encumbrance may be filed as an excused late filing under section 507C.35 if filed within thirty days from the date of the avoidance or within the further time allowed by the court under subsection 1.
84 Acts, ch 1175, §29
Referred to in §507C.35
2023 Iowa Code › Title XIII - COMMERCE › Chapter 507C - INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION › Section 507C.30 - Setoffs.

507C.30 Setoffs.
1. Except as provided in subsection 2 and section 507C.33 mutual debts or mutual credits between the insurer and another person in connection with an action or proceeding under this chapter shall be set off and the balance only shall be allowed or paid.
2. a. A setoff shall not be allowed in favor of a person where any of the following are found:
(1) At the date of the filing of a petition for liquidation, the obligation of the insurer to the person would not entitle the person to share as a claimant in the assets of the insurer.
(2) The obligation of the insurer to the person was purchased by or transferred to the person with a view to its being used as a setoff.
(3) The obligation of the insurer is owed to the affiliate of such person, or any other entity or association other than the person.
(4) The obligation of the person is owed to the affiliate of the insurer, or any other entity or association other than the insurer.
(5) The obligation of the person is to pay an assessment levied against the members or subscribers of the insurer, or is to pay a balance upon a subscription to the capital stock of the insurer, or is in any other way in the nature of a capital contribution.
(6) The obligation of the person is to pay earned premiums to the insurer.
b. Nothing in paragraph “a”, however, restricts the right of a person to set off premium due to or from the insurer pursuant to a reinsurance contract.
84 Acts, ch 1175, §30; 92 Acts, ch 1117, §26; 96 Acts, ch 1045, §1; 2005 Acts, ch 70, §6
Referred to in §507C.28A
2023 Iowa Code › Title XIII - COMMERCE › Chapter 507C - INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION › Section 507C.31 - Assessments.

507C.31 Assessments.
1. As soon as practicable but not more than two years from the date of an order of liquidation under section 507C.18 of an insurer issuing assessable policies, the liquidator shall make a report to the court setting forth all of the following:
a. The reasonable value of the assets of the insurer.
b. The insurer’s probable total liabilities.
c. The probable aggregate amount of the assessment necessary to pay claims of creditors and expenses in full, including expenses of administration and costs of collecting the assessment.
d. A recommendation as to whether an assessment should be made and, if so, in what amount.
2. a. Upon the basis of the report provided in subsection 1 and any supplement or amendment to the report, the court may levy one or more assessments against all members of the insurer who are subject to assessment.
b. Subject to any applicable legal limits on assessability, the aggregate assessment shall be for the amount that the sum of the probable liabilities, the expenses of administration, and the estimated cost of collection of the assessment, exceeds the value of existing assets. Due regard shall be given to assessments that cannot be collected economically.
3. After levy of assessment under subsection 2, the liquidator shall issue an order directing a member who has not paid the assessment pursuant to the order to show cause why the liquidator should not pursue a judgment for the assessment.
4. The liquidator shall give notice of the order to show cause by publication and by first class mail to a member liable under the order. The notice shall be mailed to the member’s last known address as it appears on the insurer’s records at least twenty days before the return day of the order to show cause.
5. a. If a member does not appear and serve duly verified objections upon the liquidator on or before the return day of the order to show cause under subsection 3, the court shall order the adjudging member to be liable for the amount of the assessment plus costs. The liquidator shall have a judgment against the member for the amount entered in the order.
b. If on or before the return day, the member appears and serves duly verified objections upon the liquidator, the commissioner may hear and determine the matter or may appoint a referee to hear it and make such order as the facts warrant. If the commissioner determines that the objections do not warrant relief from assessment, the member may request the court to review the matter and vacate the order to show cause.
6. The liquidator may enforce an order or collect a judgment under subsection 5 by any lawful means.
84 Acts, ch 1175, §31
2023 Iowa Code › Title XIII - COMMERCE › Chapter 507C - INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION › Section 507C.32 - Reinsurer’s liability.

507C.32 Reinsurer’s liability.
Notwithstanding a provision in the reinsurance contract or other agreement, the amount recoverable by the liquidator from reinsurers shall not be reduced as a result of delinquency proceedings. Payment made directly to an insured or other creditor shall not diminish the reinsurer’s obligation to the insurer’s estate except when either of the following applies:
1. The contract or other written agreement specifically provides for another payee of the reinsurance in the event of the insolvency of the ceding insurer.
2. The assuming insurer, with the consent of the direct insured, has assumed the policy obligations of the ceding insurer as direct obligations of the assuming insurer to the payees under the policies and in substitution for the obligations of the ceding insurer to the payees.
84 Acts, ch 1175, §32; 98 Acts, ch 1057, §2
2023 Iowa Code › Title XIII - COMMERCE › Chapter 507C - INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION › Section 507C.33 - Recovery of premiums owed.

507C.33 Recovery of premiums owed.
1. a. An agent, broker, premium finance company or any other person responsible for the payment of a premium is obligated to pay an unpaid premium for the full policy term due the insurer at the time of the declaration of insolvency, whether earned or unearned, as shown on the records of the insurer. The liquidator shall also have the right to recover from the person any part of an unearned premium that represents commission of the person. Credits or setoffs or both shall not be allowed to an agent, broker, or premium finance company for amounts advanced to the insurer by the agent, broker, or premium finance company on behalf of, but in the absence of a payment by, the insured.
b. Notwithstanding paragraph “a”, the agent, broker, premium finance company, or other person, is not liable for uncollected unearned premium of the insurer. A presumption exists that the premium as shown on the books of the insurer is collected and the burden is upon the agent, broker, premium finance company, or other person to demonstrate by a preponderance of the evidence that the unearned premium was not actually collected. For purposes of this paragraph, “unearned premium” means that portion of an insurance premium covering the unexpired term of the policy or the unexpired period of the policy period.
c. An insured is obligated to pay an unpaid earned premium due the insurer as shown on the records of the insurer at the time of the declaration of insolvency.
2. Upon satisfactory evidence of a violation of this section, the commissioner may pursue either one or both of the following courses of action:
a. Suspend or revoke or refuse to renew the licenses of the offending party or parties.
b. Impose a penalty of not more than one thousand dollars for each act in violation of this section by the party or parties.
3. Before the commissioner shall take any action as set forth in subsection 2, the commissioner shall give written notice to the person, company, association, or exchange accused of violating the law, stating specifically the nature of the alleged violation, and fixing a time and place, at least ten days thereafter, when a hearing on the matter shall be held. After such hearing, or upon failure of the accused to appear at the hearing, if a violation is found the commissioner shall impose those penalties under subsection 2 as deemed advisable.
4. When the commissioner shall take action in any or all of the ways set out in subsection 2, the party aggrieved may appeal from the action to court.
84 Acts, ch 1175, §33; 91 Acts, ch 213, §3
Referred to in §507C.30
2023 Iowa Code › Title XIII - COMMERCE › Chapter 507C - INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION › Section 507C.35 - Filing of claims.

507C.35 Filing of claims.
1. Proof of all claims shall be filed with the liquidator in the form required by section 507C.36 on or before the last day for filing specified in the notice required under section 507C.22. However, proof of claims for cash surrender values or other investment values in life insurance and annuities need not be filed unless the liquidator expressly so requires.
2. The liquidator may permit a claimant making a late filing to share in distributions, whether past or future, as if the claimant were not late, to the extent that the payment will not prejudice the orderly administration of the liquidation under any of the following circumstances:
a. The existence of the claim was not known to the claimant and that the claimant filed the claim as promptly thereafter as reasonably possible after learning of it.
b. A transfer to a creditor was avoided under sections 507C.26 through 507C.28, or was voluntarily surrendered under section 507C.29, and that the filing satisfies the conditions of section 507C.29.
c. The valuation under section 507C.41 of security held by a secured creditor shows a deficiency, which is filed within thirty days after the valuation.
3. The liquidator shall permit late filing claims to share in distributions, whether past or future, as if they were not late, if the claims are claims of a guaranty association or foreign guaranty association for reimbursement of covered claims paid or expenses incurred, or both, subsequent to the last day for filing where the payments were made and expenses incurred as provided by law.
4. The liquidator may consider any claim filed late which is not covered by subsection 2, and permit it to receive distributions which are subsequently declared on any claims of the same or lower priority if the payment does not prejudice the orderly administration of the liquidation. The late-filing claimant shall receive at each distribution the same percentage of the amount allowed on the claim as is then being paid to claimants of any lower priority. This shall continue until the claim has been paid in full.
84 Acts, ch 1175, §35
Referred to in §507C.29, 507C.37, 507C.56
2023 Iowa Code › Title XIII - COMMERCE › Chapter 507C - INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION › Section 507C.36 - Proof of claim.

507C.36 Proof of claim.
1. Proof of claim shall consist of a statement signed by the claimant that includes all of the following that are applicable:
a. The particulars of the claim including the consideration given for it.
b. The identity and amount of the security on the claim.
c. The payments, if any, made on the debt.
d. A statement that the sum claimed is justly owing and that there is no setoff, counterclaim, or defense to the claim.
e. Any right of priority of payment or other specific right asserted by the claimant.
f. A copy of the written instrument which is the foundation of the claim.
g. The name and address of the claimant and the attorney who represents the claimant, if any.
2. A claim need not be considered or allowed if it does not contain all the information in subsection 1 which is applicable. The liquidator may require that a prescribed form be used and may require that other information and documents be included.
3. At any time the liquidator may request the claimant to present information or evidence supplementary to that required under subsection 1 and may take testimony under oath, require production of affidavits or depositions, or otherwise obtain additional information or evidence.
4. A judgment or order against an insured or the insurer entered after the date of filing of a successful petition for liquidation, or a judgment or order against an insured or the insurer entered at any time by default or by collusion need not be considered as evidence of liability or of quantum of damages. A judgment or order against an insured or the insurer entered within four months before the filing of the petition need not be considered as evidence of liability or of the quantum of damages.
5. Claims of a guaranty association or foreign guaranty association shall be in the form and contain the substantiation as may be agreed to by the association and the liquidator.
84 Acts, ch 1175, §36
Referred to in §507C.22, 507C.35, 507C.56
2023 Iowa Code › Title XIII - COMMERCE › Chapter 507C - INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION › Section 507C.37 - Special claims.

507C.37 Special claims.
1. The claim of a third party which is contingent only on the third party first obtaining a judgment against the insured shall be considered and allowed as if there were no such contingency.
2. A claim may be allowed even if contingent, if it is filed in accordance with section 507C.35. It may be allowed and the claimant may participate in all distributions declared after it is filed to the extent that it does not prejudice the orderly administration of the liquidation.
3. Claims that are due except for the passage of time shall be treated as absolute claims are treated. However, the claims may be discounted at the legal rate of interest.
4. Claims made under employment contracts by directors, principal officers, or persons in fact performing similar functions or having similar powers are limited to payment for services rendered prior to the issuance of an order of rehabilitation or liquidation under section 507C.13 or 507C.18.
84 Acts, ch 1175, §37
Referred to in §507C.18, 507C.45
2023 Iowa Code › Title XIII - COMMERCE › Chapter 507C - INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION › Section 507C.38 - Special provisions for third-party claims.

507C.38 Special provisions for third-party claims.
1. If a third party asserts a cause of action against an insured of an insurer in liquidation, the third party may file a claim with the liquidator.
2. Whether or not the third party files a claim, the insured may file a claim on the insured’s own behalf in the liquidation. If the insured fails to file a claim by the date for filing claims specified in the order of liquidation or within sixty days after mailing of the notice required by section 507C.22, whichever is later, the insured is an unexcused late filer.
3. The liquidator shall make recommendations to the court under section 507C.42, for the allowance of an insured’s claim under subsection 2 after consideration of the probable outcome of a pending action against the insured on which the claim is based, the probable damages recoverable in the action and the probable costs and expenses of defense. After allowance by the court, the liquidator shall withhold dividends payable on the claim, pending the outcome of litigation and negotiation with the insured. If it seems appropriate, the liquidator shall reconsider the claim on the basis of additional information and amend the recommendations to the court. The insured shall be afforded the same notice and opportunity to be heard on all changes in the recommendation as in its initial determination. The court may amend its allowance as it finds appropriate. As claims against the insured are settled or barred, the insured shall be paid from the amount withheld the same percentage dividend as was paid on other claims of like property, based on the lesser of:
a. The amount actually recovered from the insured by action or paid by agreement plus the reasonable costs and expenses of defense.
b. The amount allowed on the claims by the court. After all claims are settled or barred, any sum remaining from the amount withheld shall revert to the undistributed assets of the insurer. Delay in final payment under this subsection shall not be a reason for unreasonable delay of final distribution and discharge of the liquidator.
4. If several claims founded upon one policy are filed, whether by third parties or as claims by the insured under this section, and the aggregate allowed amount of the claims to which the same limit of liability in the policy is applicable exceeds that limit, each claim as allowed shall be reduced in the same proportion so that the total equals the policy limit. Claims by the insured shall be evaluated as in subsection 3. If any insured’s claim is subsequently reduced under subsection 3, the amount thus freed shall be apportioned ratably among the claims which have been reduced under this subsection.
5. A claim may not be presented under this section if it is or may be covered by any guaranty association or foreign guaranty association.
84 Acts, ch 1175, §38
2023 Iowa Code › Title XIII - COMMERCE › Chapter 507C - INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION › Section 507C.39 - Disputed claims.

507C.39 Disputed claims.
1. If a claim is denied in whole or in part by the liquidator, written notice of the determination shall be given to the claimant or the claimant’s attorney by first class mail at the address shown in the proof of claim. Within sixty days from the mailing of the notice, the claimant may file objections with the liquidator. Unless a filing is made, the claimant may not further object to the determination.
2. If objections are filed with the liquidator and the liquidator does not alter the denial of the claim as a result of the objections, the liquidator shall ask the court for a hearing as soon as practicable and give notice of the hearing by first class mail to the claimant or the claimant’s attorney and to any other persons directly affected. The notice shall be given not less than ten nor more than thirty days before the date of the hearing. The matter shall be heard by the court or by a court-appointed referee. The referee shall submit findings of fact along with a recommendation.
84 Acts, ch 1175, §39
Referred to in §507C.43, 507C.56
2023 Iowa Code › Title XIII - COMMERCE › Chapter 507C - INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION › Section 507C.40 - Claims of other person.

507C.40 Claims of other person.
If a creditor, whose claim against an insurer is secured in whole or in part by the undertaking of another person, fails to prove and file that claim, then the other person may do so in the creditor’s name and shall be subrogated to the rights of the creditor, whether the claim has been filed by the creditor or by the other person in the creditor’s name to the extent that the other person discharges the undertaking. However, in the absence of an agreement with the creditor to the contrary, the other person is not entitled to any distribution until the amount paid to the creditor on the undertaking plus the distributions paid on the claim from the insurer’s estate to the creditor equal the amount of the entire claim of the creditor. An excess received by the creditor shall be held by the creditor in trust for the other person. As used in this section, “other person” is not intended to apply to a guaranty association or foreign guaranty association.
84 Acts, ch 1175, §40; 92 Acts, ch 1117, §28
2023 Iowa Code › Title XIII - COMMERCE › Chapter 507C - INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION › Section 507C.41 - Secured creditor’s claims.

507C.41 Secured creditor’s claims.
1. The value of security held by a secured creditor shall be determined in one of the following ways, as the court may direct:
a. By converting the security into money according to the terms of the agreement pursuant to which the security was delivered to the creditors.
b. By agreement, arbitration, compromise or litigation between the creditor and the liquidator.
2. The determination shall be under the supervision and control of the court with due regard for the recommendation of the liquidator. The amount so determined shall be credited upon the secured claim. A deficiency shall be treated as an unsecured claim. If the claimant surrenders the security to the liquidator, the entire claim shall be allowed as if unsecured.
84 Acts, ch 1175, §41
Referred to in §507C.35, 507C.58
2023 Iowa Code › Title XIII - COMMERCE › Chapter 507C - INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION › Section 507C.43 - Liquidator’s recommendations to court.

507C.43 Liquidator’s recommendations to court.
1. The liquidator shall review claims duly filed in the liquidation and shall make further investigation as necessary. The liquidator may compound, compromise or in any other manner negotiate the amount for which claims will be recommended to the court except where the liquidator is required by law to accept claims as settled by a person or organization, including a guaranty association or foreign guaranty association. Unresolved disputes shall be determined under section 507C.39. As soon as practicable, the liquidator shall present to the court a report of the claims against the insurer with the liquidator’s recommendations. The report shall include the name and address of each claimant and the amount of the claim finally recommended. If the insurer has issued annuities or life insurance policies, the liquidator shall report the persons to whom, according to the records of the insurer, amounts are owed as cash surrender values or other investment value and the amounts owed.
2. The court may approve, disapprove, or modify the report on claims by the liquidator. Reports not modified by the court within sixty days following submission by the liquidator shall be treated by the liquidator as allowed claims, subject to later modification or to rulings made by the court pursuant to section 507C.39. A claim under a policy of insurance shall not be allowed for an amount in excess of the applicable policy limits.
84 Acts, ch 1175, §43
Referred to in §507C.56
2023 Iowa Code › Title XIII - COMMERCE › Chapter 507C - INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION › Section 507C.44 - Distribution of assets.

507C.44 Distribution of assets.
Under the direction of the court, the liquidator shall pay distributions in a manner that will assure the proper recognition of priorities and a reasonable balance between the expeditious completion of the liquidation and the protection of unliquidated and undetermined claims, including third-party claims. Distribution of assets in kind may be made at valuations set by agreement between the liquidator and the creditor and approved by the court.
84 Acts, ch 1175, §44
2023 Iowa Code › Title XIII - COMMERCE › Chapter 507C - INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION › Section 507C.45 - Unclaimed and withheld funds.

507C.45 Unclaimed and withheld funds.
1. Unclaimed funds subject to distribution remaining in the liquidator’s hands when the liquidator is ready to apply to the court for discharge, including the amount distributable to a creditor, shareholder, member, or other person who is unknown or cannot be found, shall be deposited with the state treasurer, and shall be paid without interest, except in accordance with section 507C.42, to the person entitled or the person’s legal representative upon proof satisfactory to the state treasurer of the right to the funds. An amount on deposit not claimed within six years from the discharge of the liquidator is deemed to have been abandoned and shall become the property of the state without formal escheat proceedings and be deposited with the general fund.
2. Funds withheld under section 507C.37 and not distributed shall upon discharge of the liquidator be deposited with the state treasurer and paid in accordance with section 507C.42. Sums remaining which under section 507C.42 would revert to the undistributed assets of the insurer shall be transferred to the state treasurer and become the property of the state under subsection 1, unless the commissioner in the commissioner’s discretion petitions the court to reopen the liquidation under section 507C.47.
3. Notwithstanding any other provision of this chapter, funds as identified in subsection 1, with the approval of the court, shall be made available to the commissioner for use in the detection and prevention of future insolvencies. The commissioner shall hold these funds and shall pay without interest, except as provided in section 507C.42, to the person entitled to the funds or the person’s legal representative upon proof satisfactory to the commissioner of the person’s right to the funds. The funds shall be held by the commissioner for a period of two years at which time the rights and duties to the unclaimed funds shall vest in the commissioner.
84 Acts, ch 1175, §45; 92 Acts, ch 1117, §30
2023 Iowa Code › Title XIII - COMMERCE › Chapter 507C - INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION › Section 507C.46 - Termination of proceedings.

507C.46 Termination of proceedings.
1. When all assets justifying the expense of collection and distribution have been collected and distributed under this chapter, the liquidator shall apply to the court for discharge. The court may grant the discharge and make any other orders, including an order to transfer remaining funds that are uneconomical to distribute, as appropriate.
2. Any other person may apply to the court at any time for an order under subsection 1. If the application is denied, the applicant shall pay the costs and expenses of the liquidator in resisting the application including a reasonable attorney fee.
84 Acts, ch 1175, §46; 92 Acts, ch 1117, §31