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service corporation when that date merely subordinates the priority of the
late‐filed federal claims rather than causing them to be absolutely
invalidated.
Further, the court held that the McCarran‐Ferguson Act, 15 U.S.C. §§ 1011 et
seq., W.Va. Code § 33‐24‐27, reverse preempts the federal priority statute
entitling the United States to first payment of claims against an insolvent
debtor. The state statute protects policyholders by assuring that claims will
be handled in a timely and orderly fashion and by reducing the
administrative costs of liquidation. Therefore, the classification assigned by
the receiver to the late‐filed claims of the United States was correct.
Expenses of Administration
Florida
Corcoran v. State ex rel. Department of Insurance, 502 So. 2d 966 (Fla. Dist. Ct.
App. 1987). Claims handling expenses of the Florida Insurance Guaranty
Association constitute "necessary expenses of the proceeding" under the
Florida statute and thus were afforded administrative priority.
Florida Dep’t of Ins. v. Centex ‐ Great Southwest Corp. (In re the
Receivership of Southeastern Reinsurance Co., Inc.), 639 So. 2d 646 (Fla.
Dist. Ct. App. 1994). Receiver failed to establish that per diem for meals and
reimbursement for staff salaries were necessary to recovery of property and
funds, so as to constitute recoverable expenses.
Georgia Oxendine v. Commissioner of Ins. of North Carolina, 229 Ga. App. 604, 494
S.E.2d 545 (1997). Under a plan of rehabilitation, rehabilitator agreed that
delinquent insurer would pay certain pre‐rehabilitation claims over several
years. The rehabilitation plan failed, and the insurer was placed into
liquidation. The claimants argued that these claims must be paid without
regard to priorities in liquidation or, in any event, that because of the postrehabilitation
settlement, these claims should be accorded an administrative
priority. The appellate court rejected both contentions, holding that all
claims are subject to prioritization in liquidation and that settlements by the
rehabilitator do not affect a debt’s priority in the event of a subsequent
liquidation.
Illinois
Iowa
Louisiana
Miller v. Central Mutual Ins. Co. of Chicago, 299 Ill. App. 194, 19 N.E.2d 822 (Ill.
App. 1939). The court held that it was not improper for the court to approve
the allowance of compensation for the receiver and counsel retained, without
hearing or requiring evidence in support of the necessity, propriety or
reasonableness of those expenditures, as the insolvent insurer had a right to
be heard on objections before a final order was entered.
State ex rel. Hager v. Iowa National Mutual Ins. Co., 430 N.W.2d 420 (Iowa
1988). Several officers of an insolvent mutual insurance company in liquidation
filed claims seeking recovery of their deferred compensation benefits as Class
3 claims under the liquidation provisions of the Iowa Code which are patterned
after the NAIC Model Act. In denying the claims, the Supreme Court of Iowa
found that the third‐priority status "is aimed at the insolvent insurance
company's obligation to its insureds and not to employee claims." 430 N.W.2d
at 422. The Court also found that the officers of the Company were prohibited
from invoking a second‐priority (claims of employees) status. The Court
concluded that the officers' deferred compensation benefits were Class 4,
general creditor claims.
Guste v. ALIC Corporation, 595 So.2d 797 (La. App. 2 Cir. 1992). When an
order is entered in receivership proceedings enjoining parties from