N.Y. Banking Law § 656: Claims against the fund

§ 656. Claims against the fund. 1. If an uninsured transmitter of

money has defaulted in making payment on any of its New York

instruments, the superintendent shall give notice of such default to

purchasers and holders of such instruments. Such notice may be given by

means of publication in such newspaper or newspapers as the

superintendent may direct and by such other means, if any, as the

superintendent may determine to be reasonable and necessary under the

circumstances. The determination of the superintendent as to the means

of notice shall be conclusively presumed reasonable if notice is

published in such newspaper or newspapers for five consecutive days.

Such notices shall request purchasers and holders of such instruments

who wish to file claims against the fund to present such claims to the

superintendent and to file proper proof thereof within the period of

time set forth in the notice and at a place specified therein. Such

notice may limit the period of time within which claims may be filed to

a period of time no less than ten business days from the final date of

notice. Claimants shall file their claims in the form and manner

prescribed by the superintendent and shall make proof thereof and of the

loss actually suffered by such claimants to the satisfaction of the

superintendent. The superintendent shall examine the claims so filed,

determine the amount due upon such claims and certify, in writing, the

amount due each claimant, whereupon payment by the fund to the claimant

shall be made as provided for in this article. In any case where the

superintendent is not satisfied as to the allowability of a claim or if

he has notice of an adverse claim with respect to such New York

instrument, he may require the final determination of a court of

competent jurisdiction before certifying such claim. Whoever, for the

purpose of obtaining payment on any insured New York instrument, or the

payment of any claim, makes any statement knowing it to be false, or

willfully overvalues any claim, shall be guilty of a Class A

misdemeanor.

2. The payment by the fund to the claimant shall constitute an

assignment, by operation of law, of all rights which the claimant has

with respect to the New York instrument, including all rights, claims

and interests in property which the claimant could have asserted against

the transmitter of money or its property or otherwise, and all

recoveries which he would have been entitled to under the provisions of

section six hundred forty-three of this chapter, provided that if any

portion of such New York instrument is uninsured by virtue of the fact

that it exceeds the maximum amount of insurance provided for by section

six hundred fifty-five of this article or otherwise, the claimant shall

retain all of his rights with respect to the uninsured portion of such

instrument.