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

Ramesh assigns a life policy to Sunita by a signed, attested endorsement on 1 March. Notice with the endorsement is delivered to the insurer on 10 March. Earlier, on 5 March, he assigned it to Vikram by a separate attested instrument, with notice delivered to the insurer on 20 March. The assignments are absolute. Who has priority, and why?

Sunita has priority because the order in which notices are delivered to the insurer governs priority among assignees, not the order of execution. Her notice was delivered on 10 March, ahead of Vikram's on 20 March. Any dispute on priority goes to the Authority.

  1. AVikram, because his assignment was executed first
  2. BSunita, because her notice was delivered firstCorrect
  3. CBoth rank equally and share the proceeds
  4. DVikram, because his instrument was a separate document

Explanation

Under Section 38(6), the date on which notice is delivered to the insurer governs priority, and with several instruments the order of delivery of notices decides. Sunita's notice was delivered on 10 March, before Vikram's on 20 March. Execution date is irrelevant to priority.

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