§ 27-9-3-38 — Claims in name of secured creditors

Whenever a creditor whose claim against an
insurer is secured, in whole or in part, by the undertaking of another
person, fails to prove and file that claim, the other person may do so in
the creditor's name, and shall be subrogated to the rights of the creditor,
whether the claim has been filed by the creditor or by the other person
in the creditor's name, to the extent that he discharges the undertaking.
However, in the absence of an agreement with the creditor to the
contrary, the other person is not entitled to any distribution until the
amount paid to the creditor on the undertaking plus the distributions
paid on the claim from the insurer's estate to the creditor equals the
amount of the entire claim of the creditor. Any excess received by the
creditor shall be held by him in trust for the other person. As used in
this section, the term "other person" is not intended to apply to a
guaranty association or foreign guaranty association.
As added by Acts 1979, P.L.255, SEC.1.