N.Y. Insurance Law Section 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 and Health Insurance Company Guaranty Corporation of New York, and claims described in subsection (d) of § 7713 (Miscellaneous provisions)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 and Health Insurance Company Guaranty Corporation of New York or any other guaranty corporation or association of this state or another jurisdiction, other than claims provided for in paragraph one of this subsection and 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 § 4240 (Separate accounts)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 § 1113 (Kinds of insurance authorized)section one thousand one hundred thirteen of this chapter and all funding agreements described in § 3222 (Funding agreements)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 § 4240 (Separate accounts)section four thousand two hundred forty of this chapter.

Source: Section 7435 — Distribution for life insurers, https://www.­nysenate.­gov/legislation/laws/ISC/7435 (updated May 3, 2024; accessed Oct. 12, 2024).

7401
Application of article
7402
Grounds for rehabilitation of domestic insurer
7403
Order of rehabilitation
7404
Grounds for liquidation
7405
Order of liquidation
7406
Grounds for conservation of assets of foreign or alien insurer
7407
Order of conservation or ancillary liquidation of a foreign or alien insurer
7408
Uniform insurers liquidation act
7409
Conduct of delinquency proceedings against insurers domiciled in this state
7410
Conduct of delinquency proceedings against insurers not domiciled in this state
7411
Filing and proving of claims of non-residents against delinquent insurers domiciled in this state
7412
Filing and proving of claims of residents against delinquent insurers domiciled in reciprocal states
7413
Priority of preferred claims, special deposit claims and secured claims
7414
Attachment and garnishment of assets
7415
Uniformity of interpretation
7416
Grounds for dissolution of domestic insurer
7417
Commencement of a proceeding
7418
Service of order to show cause
7419
Injunctions
7420
Annual report
7421
Removal of proceedings
7422
Appointment of deputies
7423
Exemption from filing fees
7424
Deposit of monies collected
7425
Voidable transfers
7427
Offsets
7428
Disposition of assets and compromise of claims
7429
Borrowing on the pledge of assets
7430
Levy of assessments
7431
Determination of liability of members for other indebtedness
7432
Adjudication of insolvency of insurer
7433
Proof and allowance of claims
7433‑A
Loan to workers’ compensation security fund
7434
Distribution of assets
7435
Distribution for life insurers
7436
Claims-made policies
7437
Qualified financial contracts

Accessed:
Oct. 12, 2024

Last modified:
May 3, 2024

§ 7435’s source at nysenate​.gov

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