Assignment of a life insurance policy – 4

An assignment of a life insurance policy may be effected by the policyholder. Policyholder may be the life assured. It can also be an absolute assignee. And the absolute assignee need not be an individual. So the word used in section 38 is “Person”. ‘Person’ covers natural as well as artificial / legal persons.

Legal person such as a company becomes policyholder when it purchases life insurance on the life of its employee / director or when some one assigns his policy to the company absolutely. When some one avails of a housing loan from a housing company it insists on absolute assignment of the life insurance policy of the loanee in its favour. A legal person acts through its agents. It cannot act on its own.  For a company which is the principal, Agents are its officers vested with administrative or managerial powers. There happens a delegation of powers either through Standing Orders / Staff Rules / Articles of Association / specific delegation through power of attorney / resolutions passed by Board or general meeting of the company/Society / co-op bank / Association etc.

So when ever an assignment (it includes reassignment) is effected by a company/society/Co-op.bank / Association the insurer’s office should ensure that the assignment is signed by ‘an authorized person’, i.e. a person authorized to be an agent of the company / society / co-op.bank / association. Always ask for the authority of the person who has signed the assignment, by asking for a copy of the Resolution or an extract of the relevant rule / regulation that authorizes him to assign  policies.