2007 Minnesota Statutes

60B.46 DISTRIBUTION OF ASSETS.
    Subdivision 1. Payments to creditors. Under the direction of the court, the liquidator shall
pay dividends in a manner that will assure the proper recognition of priorities and 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. The court may take into consideration the contributions of the respective parties,
including guaranty associations, shareholders, and policyowners, and any other party with a
bona fide interest, in making an equitable distribution of the ownership rights of the insurer. No
distribution to stockholders of the insurer shall be permitted by the court unless the total amount
of assessments levied by guaranty associations with respect to the insurer have been repaid.
    Subd. 2. Excess assets. (a) Upon liquidation of a domestic mutual insurance company, any
assets held in excess of its liabilities and the amounts which may be paid to its members as
provided under clause (b) shall be paid into the state treasury to the credit of the general fund.
(b) The maximum amount payable upon liquidation to any member for and on account
of membership in a domestic mutual insurance company, in addition to the insurance benefits
promised in the policy, shall be the total of all premium payments made by the member with
interest at the legal rate compounded annually.
    Subd. 3. Payments to guaranty associations. Within 120 days of a final determination of
insolvency of a company by a court of competent jurisdiction of this state or as soon thereafter as
is practical, the liquidator shall make application to the court for approval of a proposal to disburse
assets out of the company's marshalled assets, from time to time as the assets become available,
to the Minnesota Insurance Guaranty Association, to the Minnesota Life and Health Insurance
Guaranty Association, and to any entity or person performing a similar function in another state.
    Subd. 4. Contents of proposal. The proposal shall at least include provisions for:
(1) reserving amounts for the payment of expenses of administration, the payment of claims
of secured creditors to the extent of the value of their security, and the payment of claims having a
higher priority than those of the guaranty associations;
(2) disbursements of the assets marshalled to date and subsequent disbursements of assets
as they become available;
(3) equitable allocation of disbursements to each of the guaranty associations entitled thereto;
(4) the securing by the liquidator from each of the guaranty associations entitled to
disbursements pursuant to this section of an agreement to return to the liquidator the assets
previously disbursed to them as may be required to pay claims of secured creditors and those
claims having a higher priority than those of the guaranty association. No bond shall be required
of a guaranty association; and
(5) a full report to be made by the guaranty association to the liquidator accounting for all
assets so disbursed to the association, all disbursements made therefrom, any interest earned by
the guaranty association on the assets, and any other matter as the court may direct.
    Subd. 5. Disbursements. (a) The proposal shall provide for disbursements to the guaranty
associations in amounts estimated to be at least equal to the claim payments made or to be made
thereby for which the guaranty association could assess a claim against the liquidator. The
proposal shall further provide that if the assets available for distribution from time to time do
not equal or exceed the amount of such claim payments made or to be made by the guaranty
association, then disbursements shall be in the amount of the available assets.
(b) The liquidator's proposal shall, with respect to an insolvent insurer writing life or health
insurance or annuities, provide for disbursements of assets to any guaranty association or any
foreign guaranty association covering life or health insurance or annuities or to any other entity
or organization reinsuring, assuming, or guaranteeing policies or contracts of insurance under
the acts creating these associations.
    Subd. 6. Notice of application. Notice of the application shall be given to the guaranty
associations in, and to the commissioners of insurance of, each of the states. The notice shall
be deemed to have been given when deposited in the United States mail, certified first class
postage prepaid, at least 30 days prior to submission of the application to the court. Action on
the application may be taken by the court provided the above required notice has been given and
provided further that the liquidator's proposal complies with subdivision 4, clauses (1) and (2).
History: 1969 c 399 s 1; 1969 c 708 s 46; 1977 c 273 s 20; 1985 c 255 s 2-5; 1986 c 444