§ 521A.11A — Recovery

Iowa § 521A.11A

• Jurisdiction: Iowa
• Title XIII: COMMERCE
• Ch. 521A: INSURANCE HOLDING COMPANY SYSTEMS

Text

1. Subject to subsections 2 through 4, if an order for liquidation, conservation, or
rehabilitation of a domestic insurer has been entered, the receiver appointed under the
order may recover on behalf of the insurer either of the following if made within one year
preceding the filing of the petition for liquidation, conservation, or rehabilitation:
23 INSURANCE HOLDING COMPANY SYSTEMS, §521A.14
a. From a parent corporation, holding company, affiliate, or other person who otherwise
controlled the insurer, the amount of distributions, other than distributions of shares of the
same class of stock, paid by the insurer on its capital stock.
b. Any payment in the form of a bonus, termination settlement, or extraordinary lump
sum salary adjustment made by the insurer or a subsidiary of the insurer to a director, officer,
agent, or employee.
2. Adistributionisnotrecoverableiftheparentholdingcompany,affiliate,orotherperson
shows that when the distribution was paid it was lawful and reasonable, and that the insurer
did not know and could not reasonably have known that the distribution might adversely
affect the ability of the insurer to fulfill its contractual obligations.
3. A parent corporation, holding company, affiliate, or other person who otherwise
controlled the insurer or affiliate at the time the distributions were paid is liable only up to
the amount of distributions or payments under subsection 1 that the person received. A
person who otherwise controlled the insurer at the time the distributions were declared is
liable only up to the amount of distributions the person would have received if the person
had been paid immediately. If two or more persons are liable with respect to the same
distributions, each shall be separately liable for their distributive share.
4. The maximum amount recoverable under this section shall be the amount needed in
excess of all other available assets of the impaired or insolvent insurer to pay the contractual
obligations of the impaired or insolvent insurer and to reimburse any guaranty funds.
5. Totheextentthatapersonliableundersubsection3isinsolventorotherwisefailstopay
claims due from the person pursuant to this section, the person’s parent corporation, holding
company, affiliate, orotherpersonwhootherwisecontrolleditatthetimethedistributionwas
paid, isseparatelyliableforitsshareofanyresultingdeficiencyintheamountrecoveredfrom
the parent corporation, holding company, affiliate, or other person who otherwise controlled
it.