This text of Iowa § 507C.38 (Special provisions for third-party claims) is published on Counsel Stack Legal Research, covering Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
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.Whetherornotthethirdpartyfilesaclaim, theinsuredmayfileaclaimontheinsured’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 actio
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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. Whetherornotthethirdpartyfilesaclaim, theinsuredmayfileaclaimontheinsured’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
§507C.38, INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION 30
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. Ifseveralclaimsfoundedupononepolicyarefiled, whetherbythirdpartiesorasclaims
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.