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

Meera Iyer holds a life policy with an insurer in Chennai. She assigns it to her brother Karthik by a separate signed instrument, attested by one witness, but neither she nor Karthik has yet delivered any notice to the insurer. Karthik's claim to sue the insurer for the policy money is therefore:

Karthik cannot yet sue the insurer. An assignment is complete on attested execution, but it does not bind the insurer or give a right to sue until written notice, with the instrument or a certified copy, is delivered to the insurer.

  1. ANot operative against the insurer, because no written notice with the endorsement or instrument has been deliveredCorrect
  2. BFully operative, because the assignment is complete once attested
  3. COperative only if the insurer was orally told of the assignment
  4. DOperative only if Meera dies within thirty days

Explanation

Under Section 38(5), an assignment is complete on execution of the attested endorsement or instrument, but it is not operative against the insurer, and gives no right to sue, until written notice with the instrument or a certified copy is delivered. Oral intimation does not meet this requirement. The option claiming full operation ignores the notice condition.

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