(b) Such security, where ordered, shall be in such form and in such amount as the commissioner may require, but in no case in excess of the amount of proof required by section three hundred forty-one of this article. The commissioner may reduce the amount of security ordered in any case within six months after the date of the accident, if, in his judgment, the amount ordered is too large. In case the security originally ordered has been deposited, the excess deposited over the reduced amount ordered shall be returned to the depositor or his personal representative forthwith, notwithstanding the provisions of subdivision (c) of this section.

(c) Security furnished in compliance with the requirements of this section shall be placed by the commissioner in the custody of the commissioner of taxation and finance and shall be applicable only to the payment of a judgment against the depositor for damages arising out of the accident in question in an action at law begun not later than one year after the date of such accident or, upon assignment of the depositor, made not later than one year after the date of such accident, to the settlement of a claim arising out of such accident, or upon assignment of the depositor, made after the expiration of one year after the date of such accident, to the settlement of an action at law begun not later than one year after the date of such accident. All of such payments made out of the deposited security shall be made as follows: Payment shall first be made to each of the judgment creditors and to each of the claimants who have agreed to settle their claims, whose damages were evaluated by the commissioner, in an amount not greater than the amount fixed in their respective evaluations. Whenever the commissioner shall be given evidence, satisfactory to him, that the amounts of all claims for damages against the depositor arising out of such accident are fixed, either by judgment or settlement agreement, payment shall be made out of any balance remaining after the first distribution to each of those persons whose judgments or settlement amounts have not been fully paid but whose damages were evaluated by the commissioner, in proportion to the amounts of their respective evaluations unless there is sufficient to make payment in full; and any balance remaining after the first and second distributions are completed shall be paid to those judgment creditors and those claimants who have agreed to settle their claims but whose damages were not evaluated, in proportion to the amounts of their respective judgments or settlement amounts unless there is sufficient to make payment in full. Such deposit, or any balance thereof, shall be returned to the depositor or his personal representative whenever after the expiration of such year, the commissioner shall be given evidence, satisfactory to him, that there is no such action pending and no such judgment unsatisfied or whenever, before the expiration of such year, the commissioner shall be given evidence, satisfactory to him, that there is no such judgment unsatisfied and that there is no existing cause of action against the depositor for damages arising out of such accident.

(c-1) After security, furnished in compliance with the requirements of this section, has remained on deposit for five years, the commissioner shall make a determination as to whether the deposit, or any balance thereof, is returnable to the depositor or the person entitled thereto. In the event that such deposit, or any balance thereof, is determined to be returnable, but remains unclaimed by the depositor or the person entitled thereto for a period of one year following the date of such determination, such unclaimed deposit, or any balance thereof, shall be deemed abandoned property subject to the provisions of the abandoned property law.

(d) The provisions of subdivision (a) of this section shall not apply to the owner of a motor vehicle operated by one having obtained possession or control thereof without the expressed or implied consent of such owner, to a police officer or member of the state police who is compelled to assume the custody and operation of a motor vehicle of another because such motor vehicle was (1) stolen from or lost by the owner, (2) abandoned, either by the owner or any other person with or without the owner's consent, (3) is being operated by a person disabled so as not to be able to operate it properly, or (4) is being operated by an intoxicated person; or to either the owner or operator of a motor vehicle involved in an accident wherein no damage or injury was caused to other than the person or property of such owner or operator.

(e) In lieu of deposit of security when required pursuant to the provisions of this section the commissioner may accept a written agreement, executed and acknowledged by the person required to deposit security and any person who has sustained bodily injury, including death, or damage to his property, or his legal representative, providing for the payment of an agreed amount in installments, with respect to the claims of such person for injuries or damages resulting from the accident. In the event of default in payment of any installment under such agreement, then upon notice of such default the commissioner shall forthwith suspend the license and registration certificates and registration plates of the person in default until release has been filed with the commissioner indicating that the entire agreed amount has been paid. But in no case shall such agreement be used in lieu of proof of maintenance of financial responsibility in the future required pursuant to the provisions of this section.