28Distribution of insurance broking account moneys on insolvency etc.

##### 28 Distribution of insurance broking account moneys on insolvency etc. (1) This section applies to and in relation to a registered insurance broker: (a) who has become an insolvent under administration; or (b) that is an insolvent company under administration; or to and in relation to the estate of a deceased insurance broker that is being administered under Part XI of the Bankruptcy Act 1966 or under the law of an external Territory providing for the administration of insolvent estates of deceased persons. (2) This section applies notwithstanding anything to the contrary contained in the Bankruptcy Act 1966 or in a law (including a law of a State or Territory) that relates to companies. (3) Moneys in an account maintained with a bank by the broker under subsection 26(1), and securities in which moneys have been invested under subsection 26(4), shall be treated as though they were subject to a trust in favour of the persons who, under subsection 26(3A) or (3B), are taken to be entitled to receive payment from that account. (4) Moneys from such an account shall be paid as follows: (a) first, moneys that have been paid into the account in error shall be withdrawn from the account; (b) secondly, insureds shall be paid the amounts they are entitled to receive from the moneys in the account in respect of claims made pursuant to contracts of insurance; (c) thirdly, insureds shall be paid the amounts (other than amounts to which paragraph (b) applies) they are entitled to receive from the moneys in the account; (d) fourthly, after all payments have been made under paragraphs (b) and (c), insurers shall be paid the amounts they are entitled to receive from the moneys in the account. (5) If the moneys in the account that are available to make payments required under a particular paragraph (other than paragraph (a)) of subsection (4) are not sufficient to meet those payments in full, the payments required under the paragraph concerned shall be made proportionally. (6) Any moneys remaining after all payments have been made under subsection (4) shall be taken to be moneys payable to the broker. (7) Nothing in the preceding provisions of this section prevents moneys in the account being invested as mentioned in subsection 26(4) by a person, other than the broker, who has lawful custody or control of the moneys.