§ 23-68-128 — Allowance of certain claims

Arkansas § 23-68-128

• Jurisdiction: Arkansas
• Title: 23

Text

(a) No contingent and unliquidated claim shall share in a distribution of the assets of an insurer which has been adjudicated to be insolvent by an order made pursuant to this chapter, except that the claim shall be considered, if properly presented, and may be allowed to share when: (1) The claim becomes absolute against the insurer on or before the last day for filing claims against the assets of the insurer; or (2) There is a surplus and the liquidation is thereafter conducted upon the basis that the insurer is solvent. (b) When an insurer has been so adjudicated to be insolvent, any person who has a cause of action against an insured of the insurer under a liability insurance policy issued by the insurer shall have the right to file a claim in the liquidation proceeding, regardless of the fact that the claim may be contingent, and the claim may be allowed if: (1) It may be reasonably inferred from the proof presented upon the claim that the person would be able to obtain a judgment upon the cause of action against the insured; (2) The person shall furnish suitable proof, unless the court for good cause shown shall otherwise direct, that no further valid claim against the insurer arising out of his or her cause of action other than those already presented can be made; and (3) If the total liability of the insurer to all claimants arising out of the same act of its insured shall be no greater than its maximum liability would be were it not in liquidation. (c) No judgment against an insured taken after the date of entry of the liquidation order shall be considered in the liquidation proceedings as evidence of liability, or of the amount of damages, and no judgment against an insured taken by default, or by collusion prior to the entry of the liquidation order shall be considered as conclusive evidence in the liquidation proceedings, either of the liability of the insured to the person upon the cause of action or of the amount of damages to which the person is therein entitled. (d) No claim of any secured claimant shall be allowed at a sum greater than the difference between the value of the claim without security and the value of the security itself as of the date of the entry of the order of liquidation or such other date set by the court for determining rights and liabilities as provided in § 23-68-124 unless the claimant shall surrender his or her security to the commissioner, in which event the claim shall be allowed in the full amount for which it is valued. (e) (1) Nothing in this chapter shall be construed to authorize the receiver, liquidator, or any other entity to compel payment from a reinsurer on the basis of estimated incurred but not reported losses or outstanding reserves. (2) Notwithstanding any provision of this chapter to the contrary, the receiver or liquidator may negotiate a voluntary commutation and release of all obligations arising from reinsurance contracts or other agreements.

Legislative History

Acts 1959, No. 148, § 666; A.S.A. 1947, § 66-4829; Acts 2005, No. 506, § 33.