Idaho Code

Idaho Code § 41-3342 (2026)

Priority of distribution.

✓ current as of May 2026

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Priority of distribution.

The priority of distribution of claims from the insurer’s estate shall be in accordance with the order in which each class of claims is herein set forth. Every claim in each class shall be paid in full or adequate funds retained for such payment before the members of the next class receive any payment. No subclasses shall be established within any class. The order of distribution of claims shall be:

(1) Class 1. The costs and expenses of administration, including, but not limited to, the following:

(a) The actual and necessary costs of preserving or recovering the assets of the insurer;

(b) Compensation for all services rendered in the liquidation;

(d) The fees and mileage payable to witnesses;

(e) Reasonable attorney’s fees; and

(f) The reasonable expenses of a guaranty association or foreign guaranty association in handling claims.

(2) Class 2. All claims under policies for losses incurred, including third party claims, and all claims of a guaranty association or foreign guaranty association. All claims under life policies, annuity policies, or disability or health insurance policies, whether for death proceeds, annuity proceeds, or investment values shall be treated as loss claims. That portion of any loss, indemnification for which is provided by other benefits or advantages recovered by the claimant, shall not be included in this class, other than benefits or advantages recovered or recoverable in discharge of familial obligations of support or by way of succession at death or as proceeds of life insurance, or as gratuities. No payment by an employer to his employee shall be treated as a gratuity.

(3) Class 3. Claims under nonassessable policies for unearned premium or other premium refunds.

(4) Class 4. Claims of the federal government not included in class 2 or class 3 above.

(5) Class 5. Debts due to employees for services performed and benefits accrued to the extent that they do not exceed one thousand dollars ($1,000) and represent payment for services performed within one (1) year before the commencing of delinquency proceedings. Officers and directors shall not be entitled to the benefit of this priority. Such priority shall be in lieu of any other similar priority which may be authorized by law as to wages or compensation of employees.

(6) Class 6. Claims of general creditors and all claims against the insurer for liability for bodily injury or for injury to or destruction of tangible property which are not under the policies.

(7) Class 7. Claims of any state or local government not included in class 2 or class 3 above. Claims, including those of any state or local governmental body for a penalty or forfeiture, shall 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 such claims shall be postponed to the class of claims under subsection (10) of this section.

(8) Class 8. Claims filed late or any other claims other than claims under subsections (9) and (10) of this section.

(9) Class 9. Surplus or contribution notes, or similar obligations, and premium refunds on assessable policies. Payments to members of domestic mutual insurance companies shall be limited in accordance with law.

(10) Class 10. The claims of shareholders or other owners arising out of their capacity as shareholders or owners, or any other capacity except as they may be qualified in class 2 or class 6 above.

Notes of Decisions

Cited in 5 cases, 1987–2007 · leading case: State of Idaho Ex Rel. Soward v. USIRS, 662 F. Supp. 60 (D. Idaho 1987).

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State of Idaho Ex Rel. Soward v. USIRS, 662 F. Supp. 60 (D. Idaho 1987). · cites it 28× “The question presented in this action is whether the claims of the United States Internal Revenue Service (IRS) receive their priority status in the underlying liquidation proceeding pursuant to Idaho Code § 41-3342 or 31 U.S.C. § 3713 .”

Grain Growers Membership & Ins. Trust v. Liquidator for the Universe Life Ins., 171 P.3d 242 (Idaho 2007). · cites it 2× “The Trusts, on behalf of the certificate holders, do not have Class 2 priority policyholder claims in Claims 1-5 or Claims 7-10 under Idaho Code § 41-3342 (2) because the Trusts’ cancellation of the GUH policies terminated the policyholders rights to any supplemental or unvested…”

In Re Universe Life Ins. Co., 171 P.3d 242 (Idaho 2007). · cites it 2× “It concluded: For the reasons stated above, the Trusts' Motion for Partial Summary Judgment is hereby DENIED, and Universe Liquidator's [Director's] Motion for Partial Summary Judgment on Trusts' Claims 1-5 And Claims 7-10 is GRANTED. The Trusts, on behalf of the certificate…”

George Fabe, Superintendent of Ins., State of Ohio v. United States Dep't of the Treasury Mitchell A. Levine, Assistant Comm'r, 939 F.2d 341 (6th Cir. 1991). “Soward involved an Idaho liquidation priority statute, Idaho Code § 41-3342 , which is nearly identical to Ohio Rev.”

State Ex Rel. Hager v. Iowa Nat'l Mut. Ins. Co., 430 N.W.2d 420 (Iowa 1988). “§ 38-462 (1987); Idaho Code § 41-3342 (Supp.1988); Ind.Code § 27-9-3-40 (1986); Iowa Code § 507C.”

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