How the liquidator must propose paying out an insolvent insurer's assets

(a) Within one hundred twenty days of a final determination of insolvency of an insurer by a court of competent jurisdiction of this State, the liquidator shall make application to the court for approval of a proposal, subject to the priority schedule stated in section 431:15-332, to disburse assets out of marshaled assets, from time to time as the assets become available. If the liquidator determines that there are insufficient assets to disburse, the application required by this section shall be considered satisfied by a filing by the liquidator stating the reasons for this determination. (b) The proposal shall at least include provisions for: (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 431:15-332, classes 1, 2 and 3; (2) Disbursement of the assets marshaled to date and subsequent disbursement of assets as they become available; (3) Equitable allocation of disbursements to each of the classes entitled thereto; (4) The securing by the liquidator from each of the classes entitled to disbursements pursuant to this section of an agreement to return to the liquidator such 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 431:15-332 in accordance with the priorities. No bond shall be required of any of the classes; and (5) A full report to be made by each class to the liquidator accounting for all assets so disbursed to the class, all disbursements made therefrom, any interest earned by the class on the assets and any other matter as the court may direct. (c) The liquidator's proposal shall provide for disbursements to the guaranty funds or associations in amounts estimated at least equal to the claim payments made or to be made thereby for which the funds or associations could assert a claim against the liquidator, and shall provide further that if the assets available for disbursement from time to time do not equal the amount of the claim payments made or to be made by the fund or association then disbursements shall be in the amount of available assets. (d) The liquidator's proposal, with respect to an insolvent insurer writing life or accident and health or sickness insurance or annuities, shall provide for disbursements of assets to any guaranty fund or association, or any foreign guaranty fund or association covering life or accident and health or sickness insurance or annuities or to any other entity or organization reinsuring, assuming, or guaranteeing policies or contracts of insurance under the acts creating such funds or associations. (e) Notice of the application shall be given to the classes affected, the guaranty fund or association in, and to the commissioners of insurance of, each of the states. Any such notice shall be deemed to have been given when deposited in the United States certified mail, first class postage prepaid, at least thirty days prior to submission of the application to the court. Action on the application may be taken by the court provided the above required notice has been given and provided further that the liquidator's proposal complies with subsections (b)(1) and (2).