This text of North Dakota § 26.1-06.1-41 (Priority of distribution) is published on Counsel Stack Legal Research, covering North Dakota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
The priority of distribution of claims from the insurer's estate must be in accordance with the
order in which each class of claims is herein set forth. Every claim in each class must be paid in
full or adequate funds retained for such payment before the members of the next class receive
any payment. No subclasses may be established within any class. The order of distribution of
claims must be:
1.Class 1. The costs and expenses of administration during rehabilitation and liquidation,
including the following:
a.The actual and necessary costs of preserving or recovering the assets of the
insurer;
b.Compensation for all authorized services rendered in the rehabilitation and
liquidation;
c.Any necessary filing fees;
d.The fees and mileage payable to witnesses;
e.Authorized reasonable att
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The priority of distribution of claims from the insurer's estate must be in accordance with the
order in which each class of claims is herein set forth. Every claim in each class must be paid in
full or adequate funds retained for such payment before the members of the next class receive
any payment. No subclasses may be established within any class. The order of distribution of
claims must be:
1. Class 1. The costs and expenses of administration during rehabilitation and liquidation,
including the following:
a. The actual and necessary costs of preserving or recovering the assets of the
insurer;
b. Compensation for all authorized services rendered in the rehabilitation and
liquidation;
c. Any necessary filing fees;
d. The fees and mileage payable to witnesses;
e. Authorized reasonable attorney's fees and other professional services rendered
in the rehabilitation and liquidation; and
f. The reasonable expenses of a guaranty association or foreign guaranty
association for unallocated loss adjustment expenses.
2. Class 2. All claims under policies including such claims of the federal or any state or
local government for losses incurred, ("loss claims") including third-party claims and all
claims of a guaranty association or foreign guaranty association. All claims under life
insurance and annuity policies, whether for death proceeds, annuity proceeds, or
investment values must be treated as loss claims. That portion of any loss,
indemnification for which is provided by other benefits, or advantages recovered by the
claimant, may not be included in this class, other than benefits or advantages
recovered or recoverable in discharge of familial obligation of support or by way of
succession at death or as proceeds of life insurance, or as gratuities. No payment by
an employer to employees may be treated as a gratuity.
3. Class 3. Claims of the federal government not included in class 2.
4. Class 4. Reasonable compensation to employees for services performed to the extent
that they do not exceed two months of monetary compensation and represent
payment for services performed within one year before the filing of the petition for
liquidation or if rehabilitation preceded liquidation, within one year before the filing of
the petition for rehabilitation. Principal officers and directors are not entitled to the
benefit of this priority except as otherwise approved by the liquidator and the court.
Such priority must be in lieu of any other similar priority which may be authorized by
law as to wages or compensation of employees.
5. Class 5. Claims under nonassessable policies for unearned premium or other premium
refunds and claims of general creditors, including claims of ceding and assuming
companies in their capacity as such.
6. Class 6. Claims of any state or local government except those paid under class 2.
Claims, including those of any state or local governmental body for a penalty or
forfeiture, may be allowed in this class only to the extent of the pecuniary loss
sustained from the act, transaction, or proceeding out of which the penalty or forfeiture
arose, with reasonable and actual costs occasioned thereby. The remainder of the
claims must be postponed to the class of claims under subsection 9.
7. Class 7. Claims filed late or any other claims other than claims under subsections 8
and 9.
8. Class 8. Surplus or contribution notes, or similar obligations, and premium funds on
assessable policies. Payment to members of domestic mutual insurance companies
must be limited in accordance with law.
9. Class 9. The claims of shareholders or other owners in their capacity as shareholders.
If any provision of this section or the application of any provision of this section to any person or
circumstance is held invalid, the invalidity does not affect other provisions or applications of this
section, and to this end the provisions are severable.