§ 428. Action against assurance fund. Any allowed claim for
indemnity shall be paid in the same manner as other claims against the
county. In the city of New York a claim shall be passed upon and
approved by the city register and by the corporation counsel of the city
before payment is allowed. The rejection of a claim by the proper
county officials (or in the city of New York by the city register and
corporation counsel) shall not preclude the claimant from bringing an
action to recover such claim. No claim or judgment on a claim for
indemnity shall be binding on the county or on the county treasurer (in
New York city the commissioner of finance) for an amount exceeding the
amount credited to the assurance fund. If the amount credited to the
assurance fund is insufficient to pay the claim or judgment in full, the
unpaid balance shall bear interest at the legal rate and shall be paid
out of the first moneys coming into said assurance fund or the county or
city general fund after the assurance fund has been terminated pursuant
to section four hundred twenty-six of this article. If any right of
action against any person for damages for negligence or other cause, or
under any covenant or contract of warranty or guaranty or otherwise,
exists in favor of the person to whom indemnity is paid, the county
treasurer (in New York city the commissioner of finance) shall be deemed
to be subrogated to such right and may bring an action to recover
thereunder. Any amounts recovered by the county treasurer (in New York
city the commissioner of finance) under such an action shall be credited
to the account of the assurance fund. Until the assurance fund provided
as aforesaid shall have been exhausted, payment for any such losses or
damages shall be made out of such fund.