Sec. 32. (a) Within one hundred twenty (120) days of a final determination of insolvency of an insurer by the Marion County circuit court, the liquidator shall make application to that court for approval of a proposal to disburse assets out of marshalled assets, from time to time as those assets become available, to a guaranty association or foreign guaranty association having obligations because of the insolvency. If the liquidator determines that there are insufficient assets to disburse, the application required by this section shall be considered satisfied by the liquidator filing a statement setting forth the reasons for this determination.

(b) The proposal to disburse assets must include:

(1) Reserving amounts for the payment of expenses of administration and the payment of claims of secured creditors, to the extent of the value of the security held, and claims falling within the priorities established in section 40 of this chapter (Classes 1 and 2).

(2) Disbursement of the assets marshalled to date and subsequent disbursement of assets as they become available.

(3) Equitable allocation of disbursements to each of the guaranty associations and foreign guaranty associations entitled to disbursements.

(4) The securing by the liquidator from each of the associations entitled to disbursements under this section of an agreement to return to the liquidator those assets, together with income earned on assets previously disbursed, as may be required to pay claims of secured creditors and claims falling within the priorities established in section 40 of this chapter in accordance with those priorities. A bond may not be required of any guaranty association or foreign guaranty association.

(5) A full report to be made by each association to the liquidator accounting for all assets so disbursed to the association, all disbursements made therefrom, any interest earned by the association on those assets and any other matter as the court may direct.

(c) The liquidator's proposal must provide:

(1) for disbursements to the associations in amounts estimated at least equal to the claim payments made or to be made by disbursements for which those associations could assert a claim against the liquidator; and

(2) that if the assets available for disbursement from time to time do not equal or exceed the amount of the claim payments made or to be made by the association then disbursements shall be in the amount of available assets.

(d) With respect to an insolvent insurer writing life or health insurance or annuities, the liquidator's proposal must provide for disbursements of assets to any guaranty association or any foreign guaranty association covering life or health insurance or annuities or to any other entity or organization reinsuring, assuming, or guaranteeing policies or contracts of insurance under the laws creating those associations.

(e) Notice of application must be given to the association in and to the commissioners of insurance of each of the states. The notice shall be considered to have been given when deposited in the United States certified mails, first-class postage prepaid, at least thirty (30) days before submission of the application to the Marion County circuit court. Action on the application may be taken by the Marion County circuit court provided that:

(1) the required notice has been given; and

(2) the liquidator's proposal complies with subsections (b)(1) and (b)(2).

As added by Acts 1979, P.L.255, SEC.1.