Assignment of insurance policies and claims in insolvency
Produced in partnership with David Steinberg and Matthew Padian of Stevens & Bolton LLP
Assignment of insurance policies and claims in insolvency

The following Restructuring & Insolvency guidance note Produced in partnership with David Steinberg and Matthew Padian of Stevens & Bolton LLP provides comprehensive and up to date legal information covering:

  • Assignment of insurance policies and claims in insolvency
  • Duties of an office-holder to realise property
  • Why might an office-holder assign an insurance claim
  • Which office-holders can assign an insurance claim in insolvency?
  • Burden of proof in considering whether to assign a claim
  • Transfer or assignment?
  • Assigning rights under an insurance policy
  • The personal nature of insurance policies
  • Is the policy or claim capable of assignment?
  • To whom can an office-holder assign rights under an insurance policy?
  • more

Duties of an office-holder to realise property

Insolvency procedures (such as administration, liquidation or bankruptcy) involve the appointment of an insolvency office-holder whose primary duty is to get in the property of the insolvent company or individual bankrupt, and realise the value of that property for the benefit of creditors (see Practice Notes: Roles, powers, functions and duties of an administrator, Role, powers, functions and duties of a liquidator and Roles, powers, functions and duties of a trustee in bankruptcy).

In this context, insurance claims (being choses in action) fall within the definition of property that is capable of realisation.

This Practice Note considers the circumstances in which an office-holder may wish to assign insurance claims and the practical considerations which may be relevant when doing so. For general details on contracts of insurance, see Practice Note: General principles of insurance contract law.

Why might an office-holder assign an insurance claim

An office-holder may seek to assign the benefit of an insurance claim for a number of reasons. These may include the following:

  1. an assignment may represent an effective way to realise value for the insolvent estate

  2. the office-holder may have inadequate funds to pursue the claim on behalf of the estate

  3. the office-holder may not consider it to be a worthwhile exercise to pursue the claim, given the prospects