20-647. Giving guaranty fund or association immediate access to assets

A. As soon as practicable after a final determination of insolvency of an insurer by a court of competent jurisdiction of this state, the receiver may make application to the court for approval of a proposal to distribute assets out of such company's marshaled assets, from time to time as such assets become available, to the Arizona property and casualty insurance guaranty fund established in section 20-662 and the life and disability insurance guaranty fund established in section 20-683 or a similar organization in another state to the extent the organization provides substantially similar protection with respect to the same kinds of insurance.

B. Such proposal shall at least include provisions for:

1. Reserving amounts for the payment of claims of secured creditors and claims accorded a higher priority pursuant to section 20-629.

2. Distribution of assets marshaled to date and subsequent distribution of assets as such assets become available.

3. Equitable allocation of disbursements to each of the funds.

4. The securing by the receiver from each of the funds entitled to distribution pursuant to this section of an agreement to return to the receiver such assets previously distributed as may be required to pay claims of secured creditors and claims accorded a higher priority pursuant to section 20-629. No bond shall be required of any such fund.

5. A full report to be made by the funds to the receiver accounting for all assets distributed to the fund, all disbursements made, any interest earned by the funds from such assets and any other matter as the court may direct.

C. The receiver's proposal shall provide for distribution to the funds in amounts estimated to at least equal the claim payment made or to be made for which such funds could assert a claim against the receiver, and shall further provide that if the assets available for distribution do not equal or exceed the amount of such claim payments made or to be made by the funds, then distribution shall be in the amount of available assets.

D. Notice of such application shall be given to the funds and to the commissioners and directors of insurance of each of the states. Any such notice shall be deemed to have been given when deposited in the United States mail, first class postage prepaid, at least thirty days prior to submission of such application to the court. Action on the application may be taken by the court if required notice has been given and if the receiver's proposal complies with subsection B, paragraphs 1 and 2 of this section.