Such security shall be applicable and available only
1. For the payment of any settlement agreement covering any claim arising out of the accident upon instruction of the person who made the deposit, or
2. For the payment of a judgment or judgments, rendered against the person required to make the deposit, for damages arising out of the accident in an action at law begun not later than one (1) year after the deposit of such security, or within one (1) year after the date of deposit of any security following failure to make payments under an agreement to pay.
Laws 1961, p. 357, § 7-217.