(a) Within 120 days of a final determination of insolvency of an insurance company by a court of competent jurisdiction the receiver shall make application to the said court for approval of a proposal to disburse assets out of such company's marshalled assets, from time to time as such assets become available, to the Alabama Life and Disability Insurance Guaranty Association and to any entity or person performing a similar function in another state. (The Alabama Life and Disability Insurance Guaranty Association and any entity or person performing a similar function in other states shall hereinafter be referred to collectively as associations.)
(b) Such proposal shall at least include provisions for:
(1) Reserving amounts for the payment of expenses of administration and claims falling within the priorities established in the Alabama Uniform Insurers Liquidation Act (subdivisions (2) through (13) of Section 27-32-1 and Sections 27-32-4, 27-32-5, 27-32-15 through 27-32-22) but only with respect to such priorities higher than that of the associations;
(2) Disbursement of the assets marshalled to date and subsequent disbursements of assets as they become available;
(3) Equitable allocation of disbursements to each of the associations entitled thereto;
(4) The securing by the receiver from each of the associations entitled to disbursements pursuant to this section of an agreement to return to the receiver such assets previously disbursed as may be required to pay claims of secured creditors and claims with a higher priority than those of the associations. No bond shall be required of any such association; and
(c) The receiver's proposal shall provide for disbursements to the associations in amounts at least equal to the payments made or to be made thereby for which such associations could assert claims against the receiver, and shall further provide that if the assets available for disbursement from time to time do not equal or exceed the amount of such payments made or to be made by the associations then disbursements shall be in the amount of available assets.
(d) Notice of such application shall be given to the associations 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 mails, first class postage prepaid, at least 30 days prior to submission of such application to the said court. Action on the application may be taken by the said court provided that above required notice has been given and provided further that the receiver's proposal complies with subdivisions (1) and (4) of subsection (b) hereof.