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Policies of insurance act 1867

This act regulates the assignments of life insurance polices and states that a person who becomes entitled by assignment can sue in their own name to enforce their rights under the policy. So the assignee can take action against the life policy even though they may not have been party to the original insurance contract.   In order for the assignee to use this right they must under section 3 of the act notify the life office of the assignment in writing giving the date and purport of the assignment.

The act says that the date on which the notice is received by the life office shall regulate the priority of claims under any assignment, and payment of a valid claim by the life office prior to such notice is a defence by the life office against such assignment.

The act covers all forms of assignment with the exception of assignment by law (absolute assignment or assignment for value) for example under bankruptcy proceedings. Assignment rules can therefore be stated as ‘priority of notice regulates priority of claim’.   However the following exceptions apply to this rule,