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CS Professional · Banking and Insurance - Laws and Practice · Functions in Insurance and Compliance related thereto (Part II)

A policyholder gave notice of assignment on 1 June. The insurer believes the assignment is meant for trading of the policy and wishes to decline. By when must it record reasons in writing and communicate them to the policyholder?

The insurer must record its reasons in writing and communicate them to the policyholder not later than thirty days from the date the policyholder gave notice of the assignment. Purpose of trading the policy is a valid ground for declining.

  1. AWithin fifteen days of the notice
  2. BWithin thirty days of the date of the noticeCorrect
  3. CWithin forty-five days of the notice
  4. DWithin ninety days of the notice

Explanation

Before refusing to act on the endorsement, the insurer must record reasons in writing and communicate them to the policyholder not later than thirty days from the date of notice. Trading of policies is one ground for declining.

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