1. Member States shall ensure that insurance claims take precedence over other claims on the insurance undertaking according to one or both of the following methods:
(a) insurance claims shall, with respect to assets representing the technical provisions, take absolute precedence over any other claim on the insurance undertaking;
(b) insurance claims shall, with respect to the whole of the insurance undertaking's assets, take precedence over any other claim on the insurance undertaking with the only possible exception of:
(i) claims by employees arising from employment contracts and employment relationships,
(ii) claims by public bodies on taxes,
(iii) claims by social security systems,
(iv) claims on assets subject to rights in rem.
2. Without prejudice to paragraph 1, Member States may provide that the whole or a part of the expenses arising from the winding-up procedure, as defined by their national legislation, shall take precedence over insurance claims.
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