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Assignment of insurance policies and claims | Practical Law

Assignment of insurance policies and claims

Practical law uk practice note w-031-6021 (approx. 19 pages).

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Post-Loss Assignments of Claims Under Insurance Policies

In the settlement of lawsuits involving insured claims, it is not uncommon that one condition of the settlement is that the defendant assign his or her claims under all applicable insurance policies to the party that filed suit.

Indeed, it is frequently the case that the defendant, particularly when the defendant is an individual, has a limited ability to pay a judgment and insurance coverage offers the best opportunity for a recovery by the suing party. Usually, such settlements are made without any serious thought being given to whether the defendant’s claim against its insurer is assignable; the assumption being that it is assignable.

However, insurance policies generally have anti-assignment clauses which prohibit the assignment of the policy, or an interest in the policy, without the insurer’s consent. These clauses come into play in determining the validity or enforceability of the assignment of a claim under an insurance policy and should be considered when such an assignment is part of a settlement.

When considering the enforceability of anti-assignment clauses in insurance policies, the courts generally draw a distinction between an assignment made prior to the occurrence of a covered loss (a “pre-loss” assignment) and an assignment made after the occurrence of a covered loss (a “post-loss” assignment).

In analyzing pre-loss assignments, the courts recognize that requiring an insurer to provide coverage to an assignee of its policy prior to the occurrence of a covered loss would place the insurer in the position of covering a party with whom it had not contracted nor been allowed to properly underwrite to assess the risks posed by that potential insured, and, accordingly, determine the appropriate premium to charge for the risks being undertaken or choose to decline coverage.

Post-loss assignments, on the other hand, take place after the insurer’s obligations under its policy have become fixed by the occurrence of a covered loss, thus the risk factors applicable to the assignee are irrelevant with regard to the covered loss in question. For these reasons, the majority of the courts enforce anti-assignment clauses to prohibit or restrict pre-loss assignments, but refuse to enforce anti-assignment clauses to prohibit or restrict post-loss assignments.

Katrina Cases

The Louisiana Supreme Court, which had not previously addressed the enforceability of anti-assignment clauses for post-loss assignments, was recently confronted with this issue in the In re: Katrina Canal Breaches Litigation, litigation involving consolidated cases arising out of Hurricane Katrina. The issue arose as a result of a lawsuit brought by the State of Louisiana as the assignee of claims under numerous insurance policies as part of the “Road Home” Program. The Road Home Program was set up following Hurricanes Katrina and Rita to distribute federal funds to homeowners suffering damage from the hurricanes. In return for receiving a grant of up to $150,000, homeowners were required to execute a Limited Subrogation/Assignment agreement, which provided in pertinent part:

Pursuant to these Limited Subrogation/Assignments, the State of Louisiana brought suit against more than 200 insurance companies to recover funds dispensed under the Road Home Program. The suit was removed to Federal Court under the Class Action Fairness Act and the insurers filed motions to dismiss, arguing that the assignments to the State of Louisiana were invalid under the anti-assignment clauses in the homeowner policies at issue.

On appeal, the United States Fifth Circuit Court of Appeals certified the following question to the Louisiana Supreme Court: “Does an anti-assignment clause in a homeowner’s insurance policy, which by its plain terms purports to bar any assignment of the policy or an interest therein without the insurer’s consent, bar an insured’s post-loss assignment of the insured’s claims under the policy when such an assignment transfers contractual obligations, not just the right to money due?”

In answering this question, the Louisiana Supreme Court began by noting that, as a general matter, contractual rights are assignable unless the law, the contract terms or the nature of the contract preclude assignment. Specific to the certified question, Louisiana Civil Code article 2653 provides that a right “cannot be assigned when the contract from which it arises prohibits the assignment of that right.” The Louisiana Supreme Court observed that the language of article 2653 is broad and, on its face, applies to all assignments, including post-loss assignments of insurance claims. The Court, therefore, construed the issue confronting it as whether Louisiana public policy would enforce an anti-assignment clause to preclude post-loss assignments of claims under insurance policies.

In addressing the public policy question, the Louisiana Supreme Court recognized the distinction between pre-loss assignments and post-loss assignments discussed by courts from other states and noted that the prevailing view was that anti-assignment clauses were invalid and/or unenforceable when applied to post-loss assignments. Notwithstanding this weight of authority, the Louisiana Supreme Court stated:

“[W]hile the Louisiana legislature has clearly indicated an intent to allow parties freedom to assign contractual rights, by enacting La. C.C. art. 2653, it has also clearly indicated an intent to allow parties freedom to contractually prohibit assignment of rights. We recognize the vast amount of national jurisprudence distinguishing between pre-loss and post-loss assignments and rejecting restrictions on post-loss assignments, however we find no public policy in Louisiana favoring assignability of claims over freedom of contract.”

Thus, Court refused to invalidate the enforceability of the anti-assignment clauses to the post-loss assignments before it based on public policy, adding that public policy determinations are better suited to the legislature.

Nonetheless, after having recognized the general enforceability of anti-assignment clauses to post-loss assignments, the Court immediately placed limits on when those clauses would be applicable, stating that to be applicable, they “must clearly and unambiguously express that the non-assignment clause applies to post-loss assignments.” The Court refused “to formulate a test consisting of specific terms or words,” which would satisfy this condition and remanded the case to the federal courts to determine whether the individual anti-assignment clauses in the various policies were sufficiently clear and explicit to be enforced with respect to post-loss assignments at issue.

A Broad Application

It should be noted that the Court’s opinion appears to apply broadly to all post-loss assignments irrespective of what specific rights are being assigned, despite the fact that the certified question was narrower and asked only about the applicability of a post-loss assignment where the assignment “transfers contractual obligations, not just the right to money due.”

In a footnote at the beginning of its opinion, the Louisiana Supreme Court observed that in certifying the question to it, the Fifth Circuit “disclaimed any intent” that the Court “confine its reply to the precise form or scope of the legal questions certified.” The footnote indicates that the Court’s opinion was not intended to be limited to only those post-loss assignments involving the assignment of contractual obligations.

Louisiana has departed from the majority view in holding that as a matter of general law, anti-assignment clauses are not inherently void with regard to post-loss assignments. However, it may be that in practical application, the results of individual cases may well be consistent with the majority rule of not enforcing anti-assignment clauses with regard to post-loss assignments because Louisiana courts may be reluctant to find that the anti-assignment clauses are sufficiently “clear and explicit” unless they specifically state that they apply to post-loss assignments, notwithstanding the Louisiana Supreme Court’s unwillingness to “formulate a test consisting of specific terms or words.”

Topics Lawsuits Carriers Profit Loss Claims Louisiana Hurricane Homeowners

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Assignment of Rights Under an Insurance Policy

Can you assign your rights under an insurance policy.

Whether you can assign rights under your insurance policy to someone else is a common issue that many policyholders face. Insurance companies include terms in their policies that prohibit assignment of rights. However, there are circumstances under which an assignment of rights may be necessary, especially after you have already suffered the loss. As a business owner, your best course of action is caution.

You Cannot Assign Rights Before a Loss

An assignment of rights means that you are transferring your coverage under the policy to a third party. From the insurance company’s standpoint, they would want to prohibit an assignment of benefits because it takes away their ability to decide who to insure and how to price their risk. The insurance company’s worry is that the policy rights would be transferred to a party that carries more risk; as a result, the agreed-upon premiums would not actually cover the risk they were insuring. This argument is logical, and the default rule is that you cannot assign policy rights before any loss has occurred.

The insurance policy will usually have a clause that explicitly prohibits the assignment of the policy. The only exception is that the policy may be assigned upon the death of a beneficiary. As long as this language exists in your policy, courts will generally enforce it. The only way that you could assign a policy before a loss is if the insurance company allows it. Usually, they will not.

You Can Assign Rights After a Loss

Whether you can assign rights is a different story after a loss has happened. After a loss, you may transfer the benefit of the policy to a third party. From a policy perspective, this would make sense. After all, the loss occurred on your policy, and you were the one who made payments. The claim is your legal right, and you should have the ability to do with it as you want.

There may be valid reasons why you would want to assign policy rights to someone else. For example, your business could suffer a physical loss. A contractor whom you hire to do the repair job may ask you to assign the rights to your claim to them so they can quickly do the repair work. Generally, this is permissible. This is the same concept that you would find in health insurance when you assign your rights to a doctor who collects payment from the insurer. However, insurance companies have been known to object to this assignment, especially if they have legal difficulty of their own with the contractor.

Be Very Cautious When Assigning Rights

As a business owner, the fact that an assignment of your rights under your policy is an available option does not mean that it is the right course of action. There are some contractors out there who will use this process to take advantage of you or the insurance company. Some contractors have tried to file inflated claims with insurance companies for work or charge for work that they never did.

As a result, you need to be very careful before you assign your rights under the policy. Carefully document the damage yourself and deal with the insurance adjuster on your own. Do not assign the rights under the policy until you are exactly sure of the scope of the damage and the size of the claim. You should always be involved with the insurance company yourself as opposed to letting the contractor handle everything on their own. Never do work with a contractor that wants to deal directly with the insurance company on their own without any of your involvement. The last thing that you want is for a contractor to do thousands of dollars of work, and the insurance company tries to reject the assignment of benefits.

Right now, assignment of benefits is a major battle between insurance companies and contractors. The last place that you want to be is in the middle of the fight, lest you end up holding the bag on a large repair bill or stuck not being able to get critical work done after you suffer major damage. Never sign anything unless you understand every word in the document. If you have any questions, call us, and we are here to assist you.

Contact an Insurance Coverage and Litigation Lawyer

For help with assignment of rights and other insurance coverage disputes, contact attorney Michael J. Faul at Herold Law today. Call us at (908) 647-1022 or contact us to schedule your initial consultation with an experienced insurance coverage lawyer. We could review your policy before you sign or assist with a coverage issue for an existing policy.

How Does Your Insurance Policy’s “Assignment of Benefits” Clause Affect You?

When homeowners suffer a property loss, one of the first things they do – even before they know the amount of coverage they will receive from their insurer – is call a contractor. The contractor looks at the damage, and estimates the likely cost of repairing the property. Maybe that estimate is greater than the coverage amount the homeowner expects the insurance company to pay out.

In this instance, the contractor will sometimes suggest that the homeowner enter into an “assignment of benefits” (AOB) arrangement. Under this side contract, the contractor agrees to accept as payment whatever the insurance company pays for the insured’s property loss claim.

Such AOB deals can be a major problem.

For one thing, most contractors know very little about insurance coverages and the art of negotiating optimal coverage payouts. The insurance company may initially offer $60K, for example, in a situation where an experienced public adjuster could have secured almost twice that amount. The contractor might take the $60K, and then discover that amount isn’t enough to get the repair job done properly. The contractor then must skimp and cut corners, resulting in a shoddy repair job for the unsuspecting homeowner.

At common law, insureds were prohibited from assigning their insurance policy benefits and other underlying rights. State legislatures, however, have allowed AOB, and many state courts will permit the assignment of insurance policies.

The problems stemming from AOB have led to a mountain of litigation and debates about whether it should be allowed at all. Insurance carriers are happy to allow AOB, because contractors present an easy mark and often accept low-ball claim offers. The contractors, meanwhile, are serving two masters – handling the insured’s claim, as well as taking money to do repairs. That’s exactly why the National Association of Public Insurance Adjusters (NAPIA) doesn’t allow contractors to be PAs and do this type of work.

We recently spoke with Brian Goodman, General Counsel of NAPIA, who calls the practice of AOB “ripe with the possibility of harming consumers and making it so the insured never gets properly indemnified.” We agree.

NAPIA is working with the National Association of Insurance Commissioners (NAIC) to eradicate the practice of AOB. There is some resistance because of an unwillingness to infringe on an individual’s right to contract with somebody. But, in our view, any use of AOB really harms consumers.

Diane Swerling

Assignment in Insurance Policy | Meaning | Explanation | Types

Table of Contents

1 What is Assignment in an Insurance Policy?
2 Who can make an assignment?
3 What happens to the ownership of the policy upon Assignment?
4 Can assignment be changed or cancelled?
5 What happens if the assignment dies?
6 What is the procedure to make an assignment?
7 Is it necessary to Inform the insurer about assignment?
8 Can a policy be assigned to a minor person?
9 Who pays premium when a policy is assigned?
10.1 1. Conditional Assignment
10.2 2. Absolute Assignment

What is Assignment in an Insurance Policy?

Assignment means a complete transfer of the ownership of the policy to some other person. Usually assignment is done for the purpose of raising a loan from a bank or a financial institution .

Assignment in Insurance Policy - Meaning, Explanation, Types

Assignment is governed by Section 38 of the Insurance Act 1938 in India. Assignment can also be done in favour of a close relative when the policyholder wishes to give a gift to that relative. Such an assignment is done for “natural love and affection”. An example, a policyholder may assign his policy to his sister who is handicapped.

Who can make an assignment?

A policyholder who has policy on his own life can assign the policy to another person. However, a person to whom a policy has been assigned can reassign the policy to the policyholder or assign it to any other person. A nominee cannot make an assignment of the policy. Similarly, an assignee cannot make a nomination on the policy which is assigned to him.

What happens to the ownership of the policy upon Assignment?

When a policyholder assign a policy, he loses all control on the policy. It is no longer his property. It is now the assignee’s property whether the policyholder is alive or dead, the assignee alone will get the policy money from the insurance company.

If the assignee dies, then his (assignee’s) legal heirs will be entitled to the policy money.

Can assignment be changed or cancelled?

An assignment cannot be changed or cancelled. The assignee can of course, reassign the policy to the policyholder who assigned it to him. He can also assign the policy to any other person because it is now his property. We can think of a bank reassigning the policy to the policyholder when their loan is repaid.

What happens if the assignment dies?

If the assignee dies, the assignment does not get cancelled. The legal heirs of the assignee become entitled to the policy money. Assignment is a legal transfer of all the interests the policyholder has in the policy to the assignee.

What is the procedure to make an assignment?

Assignment can be made only after issue of the policy bond. The policyholder can either write out the wording on the policy bond (endorsement) or write it on a separate paper and get it stamped. (Stamp value is the same, as the stamp required for the policy — Twenty paise per one thousand sum assured). When assignment is made by an endorsement on the policy bond, there is no need for stamp because the policy is already stamped.

Is it necessary to Inform the insurer about assignment?

Yes, it is necessary to give information about assignment to the insurance company. The insurer will register the assignment in its records and from then on recognize the assignee as the owner of the policy. If someone has made more than one assignment, then the date of the notice will decide which assignment has priority. In the case of reassignment also, notice is necessary.

Can a policy be assigned to a minor person?

Assignment can be made in favour of a minor person. But it would be advisable to appoint a guardian to receive the policy money if it becomes due during the minority of the assignee.

Who pays premium when a policy is assigned?

When a policy is assigned normally, the assignee should pay the premium, because the policy is now his property. In practice, however, premium is paid by the assignor (policyholder) himself. When a bank gives a loan and takes the assignment of a policy a security, it will ask the assignor himself to pay the premium and keep it in force. In the case of an assignment as a gift, the assignor would like to pay the premium because he has gifted the policy.

Types of assignment

Assignment may take two forms:

Conditional Assignment.
Absolute Assignment.

1. Conditional Assignment

It would be useful where the policyholder desires the benefit of the policy to go to a near relative in the event of his earlier death. It is usually effected for consideration of natural love and affection. It generally provides for the right to revert the policyholder in the event of the assignee predeceasing the policyholder or the policyholder surviving to the date of maturity.

2. Absolute Assignment

This assignment is generally made for valuable consideration. It has the effect of passing the title in the policy absolutely to the assignee and the policyholder in no way retains any interest in the policy. The absolute assignee can deal with the policy in any manner he likes and may assign or transfer his interest to another person.

Can a policy be assigned during the minority of the life assured?

Can a general insurance policy(say fire/motor) under agreed bank clause should be assigned as the stock/motor is hypo/mortgaged to a bank

Accountlearning | Contents for Management Studies |

Assignment of insurance policies and claims in insolvency

Produced in partnership with david steinberg, matthew padian and helen martin of stevens & bolton llp.

The following Restructuring & Insolvency practice note produced in partnership with David Steinberg, Matthew Padian and Helen Martin of Stevens & Bolton LLP provides comprehensive and up to date legal information covering:

Duties of an office-holder to realise property

Why might an office-holder assign an insurance claim.

Which office-holders can assign an insurance claim in insolvency?
Burden of proof in considering whether to assign a claim
Transfer or assignment?
Assignment of policy
Assigning rights under an insurance policy
Is the claim capable of assignment?
To whom can an office-holder assign rights under an insurance policy?
Risks associated with declining to assign rights under an insurance policy
Equitable or legal assignment
Effecting a legal assignment
Drafting an assignment of rights under an insurance policy
Assignments of rights under certain insurance contracts subject to specific statutory regimes
Enforcement of contractual rights by third parties pursuant to statutory regimes
Contracts (Rights of Third Parties) Act 1999
Third Parties (Rights against Insurers) Act 2010

Insolvency procedures (such as administration , liquidation or bankruptcy ) involve the appointment of an insolvency office-holder whose primary duty is to get in the property of the insolvent company or individual bankrupt, and realise the value of that property for the benefit of creditors (see Practice Notes: Roles, powers, functions and duties of an administrator, Role, powers, functions and duties of a liquidator and Roles, powers, functions and duties of a trustee in bankruptcy).

In this context, insurance claims (being choses in action) fall within the definition of property that is capable of realisation.

This Practice Note considers the circumstances in which an office-holder may wish to assign insurance claims and the practical considerations which may be relevant when doing so. For general details on contracts of insurance, see Practice Note: General principles of insurance contract law.

An office-holder may seek to assign the benefit of an insurance claim for a number of reasons. These may include the following:

an assignment may represent an effective way to realise value for the insolvent estate

the office-holder may have inadequate funds to pursue the claim on behalf of the estate

the office-holder may not consider it to be a worthwhile exercise to pursue the claim, given the prospects of success or

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Key definition:

Insolvency definition, what does insolvency mean.

This can be defined by two alternative tests ( Insolvency Act 1986, s 123 ):

• cash flow test: a company is solvent if it can pay its debts as they fall due, no matter what the state of its balance sheet (Re Patrick & Lyon Ltd [1933] Ch 786 );

• balance sheet test: a company which can pay its debts as they fall due may be insolvent if, according to its balance sheet, liabilities (including contingent liabilities) exceed assets.

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Assignment of a Life Insurance Policy simply means transfer of rights from one person to another. The policyholder can transfer the rights of his insurance policy to another for various reasons and this process is called Assignment.

The person who assigns the policy, i.e. transfers the rights, is called the Assignor and the one to whom the policy has been assigned, i.e. the person to whom the policy rights have been transferred is called the Assignee. Once the rights have been transferred to the Assignee, the rights of the Assignor stands cancelled and the Assignee becomes the owner of the policy.

here are 2 types of Assignment:

Absolute Assignment – This means complete Transfer of Rights from the Assignor to the Assignee, without any further conditions applicable.
Conditional Assignment – This means that the Transfer of Rights will happen from the Assignor to the Assignee subject to certain conditions. If the conditions are fulfilled then only the Policy will get transferred from the Assignor to the Assignee.

Let’s take an example:

Rahul owns 2 Life Insurance policies of value Rs 2 lakhs and Rs 5 lakhs respectively. He would like to gift one policy of Rs 2 lakhs to his best friend Ajay. In that case, he would like to absolutely assign the policy in his name such that the death or maturity proceeds are directly paid to him. Thus, after the assignment, Ajay becomes the absolute owner of the policy. If he wishes, he may again transfer it to someone else for any other reason. This type of Assignment is called Absolute Assignment.

Now, Rahul needed to take a loan for Rs 5 lakhs. So, he thought of doing so against the other policy that he owned for Rs 5 lakhs. To take a loan from ABC bank, he needed to conditionally assign the policy to that Bank and then the bank would be able to pay out the loan money to him. If Rahul failed to repay the loan, then the bank would surrender the policy and get their money back.

Once Rahul’s loan is completely repaid, then the policy would again come back to him. In case, Rahul died before completely repaying the loan, then also the bank can surrender the policy to get their money back. This type of Assignment is called Conditional Assignment.

Sachin Telawane is a Content Manager and writes on various aspects of the Insurance industry. His enlightening insights on the insurance industry has guided the readers to make informed decisions in the course of purchasing insurance plans.

Practical Law

Assignment of insurance policies and claims

Practical law uk practice note w-031-6021 (approx. 19 pages).

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Post-Loss Assignments of Claims Under Insurance Policies in Louisiana

Katrina Cases

“I/we hereby assign to the State of Louisiana . . . to the extent of the grant proceeds awarded or to be awarded to me under the [Road Home] Program, all of my/our claims and future rights to reimbursement and all payments hereafter received or to be received by me/us: (a) under any policy of casualty or property damage insurance or flood insurance on the residence, excluding contents (“Residence”) described in my/our application for Homeowner’s Assistance under the Program (“Policies”): (b) from FEMA, Small Business Administration, and any other federal agency, arising out of physical damage to the Residence caused by Hurricane Katrina and/or Hurricane Rita.”

A Broad Application

Robert Redfearn, Jr. ([email protected]) is a partner in Simon, Peragine, Smith & Redfearn, a regional law firm with offices in New Orleans, La., and Mississippi.

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Nomination and Assignment under Insurance Contracts

Published by siri k reddy on 30/01/2021 30/01/2021, introduction:.

The term assignment itself means you assign something to someone else. In term life insurance, the assignment of the policy describes the action of assigning legal rights as well as policy ownership to someone else. The person who assigns the policy is known as an Assignor and the person who has been assigned the policy is known as an Assignee.

Nomination under the insurance contract refers to nominate someone on your behalf in order to collect the benefit in your absence. A person who is trustworthy can be nominated upon the death of a person. The trustworthy person could be from the dead person’s family or close friends. Then that person is the nominee of the policy.

However in most of the cases, people choose their family member as the nominee of the policy but as per the insurance act of 1938, under section 39, the nomination of a particular person is not restricted to a family only. Any person who is considered as trustworthy and any person who will not misuse the policy are considered to be an ideal nominee of that particular policy.

Types of Assignment

There are two types of assignment of policies:

Absolute assignment: under this particular type of assignment, the assignor is bound to transfer the ownership, title, legal interests and all the rights of the policy to the assignee. This type of transfer of the policy does not include the terms and conditions on the part of the assignee. The exact purpose of the absolute assignment is to repay the debts or to show affection to loved ones.
Collateral assignment: collateral assignment refers to that particular assignment in which the policyholder assigns the policy on terms and conditions, and the assignee is restricted to avail the benefits of all the terms and conditions. The main purpose of the collateral assignment is to repay loans and liabilities.

Types of Nomination

There are three types of nominations, such as:

Beneficiary nominee: in this particular nomination a particular person can be made beneficiary to the immediate family members like parents, children, and spouse. The beneficiary will be entitled to receive all the benefits of the policy legally only in case of unfavourable conditions.
Minor nominee: since it is considered that a minor cannot deal with financial conditions, the guardian of that particular minor has to give the details of their selves only when the policyholder chooses his/her child as the nominee.
Non-family nominee: a non-family member is that person who does not have blood relation with the policyholder such as close friends, a distant relative, a neighbour, etc. under section 39 of the insurance act of 1938; any trustworthy person can be a policy nominee.

Nomination and Assignment in Life Insurance Plans

As it is already known that insurance is a legal contract between the insurance company who is also called the insurer and the policyholder. An assignee is a person to whom the rights have been transverse to. An example of an absolute assignment is as follows: Mr Bharath owns a life insurance policy of 1 crore and he wants to gift this particular policy to his wife as ‘absolute assignment’ to her name. Once this absolute assignment is made to his wife’s name, she will be the owner of the policy. She also has the right to transfer this policy to someone else.

An example of a conditional assignment is as follows: Ms Supriya owns a term insurance policy of 900,000. She wants a home loan of the same amount. Hence her banker asked her to assign the term policy in their name in order to get the loan. If Supriya meets an untimely death the banker is entitled to enjoy their money. An assignment deed or deed of assignment [DOA] is that deed through which rights can be transferred from one person to another.

Sections and Policies

SECTION 38- ASSIGNMENT AND TRANSFER OF INSURANCE POLICIES

The provisions under section 38 of the Insurance Law Act, 2015. The provisions of this particular section are as follows:

This policy allows itself to be transferred with or without consideration.
An assignment has a high chance of being affected by an endorsement upon the policy or by a separate instrument to the insurer.
The instruments should reflect the assignment and the reasons for the transfer.
An authorized agent or the transferor should sign the assignment.
The transferor of the assignment should not be operative against an insurer until prior notice is issued
The authority has the right to specify the fees that is paid for the transfer
The insurer is also expected to give a written acknowledgement of receipt of the notice. Such notice acts as evidence for the future.
The notices shall be delivered only at one place where the policy is being served in order to avoid confusions. This arrangement is made as the insurer is involved in managing more than one business place.
The insurer has the right to accept or deny acting upon any transfer or endorsement only if it is not bonafide or not in the public interest.
Before denying the endorsement, the insurer should make a note of the reasons for the same.

SECTION 39- NOMINATION BY POLICYHOLDER

The provisions of this particular section are as follows:

The policyholder can nominate a person to whom money secured by the policy shall be paid during the death.
When in case of a minor, the policyholder can appoint any person to receive the money in the event of policyholder’s death during the minority of the nominee.
Nomination can be made at any time before the maturity of the policy.
The nomination can be incorporated or endorsed to the insurer.
The provisions of section 39 are not applicable to any life insurance policy to which section 6 of the Married Women’s Property Act, 1874 applies.
If the nominee dies before the policyholder, the money is payable to the legal representatives or the holder of succession certificate.

SECTION 45- Policy shall not be called in question on the ground of misstatement after three years

Provisions of this section are as follow:

Any policy of life insurance shall not be called in question after the expiry of three years from the date of issuance of the policy, the date of commencement of risk, the date of revival, the date rider coming to the policy.
Silence is not considered to be fraud unless it depends on the circumstances of the case.
The insurer can call for age proof at any time only if he is entitled.
No insurer can reject a life insurance policy on the grounds of fraud if the beneficiary can prove that the fraud was true to the best of his knowledge.

Difference between Nomination and Assignment

Assignment of policies- impact on existing nomination.

According to section 39(4) of the insurance act, 938, the assignment of an insurance policy automatically cancels the nomination.
Here are the few circumstances under which the assignment does not automatically cancel nomination :

When the policy loan is taken from the life insurer who issues the policy, the policy has to be assigned in favour of the life insurer. Under such circumstances, assignments in favour of the life insurer do not automatically cancel the nomination.

On the other hand, where the policy is assigned by a debtor to creditor acts as collateral security for the loan taken by the policyholder from the assignee.

The nomination and assignments have their own uses and benefits as a separate topic under the insurance contracts. I have gained in-depth knowledge of what exactly is nomination and assignment along with minute differences between them. The differences between them have helped me gain much more understanding of the topic. Nomination protects the interests of the insured and the insurer. Whereas the assignment strives to protect the interests of the assignee in availing all the benefits.

References:

INSURANCE LAWS IN INDIA- VARDHAMAN MAHAVEER, pg. 32. 54.
RAJIV JAIN: INSURANCE LAW AND PRACTICE, pg. 44
https://m.economictimes.com/nomination-and-assignment/articleshow/3320189.cms
https://accountlearning.com/difference-nomination-assignment/
https://accountlearning.com/assignment-in-insurance-policy-meaning-explanation-types/
https://life.futuregenerali.in/life-insurance-made-simple/life-insurance/change-nominee-in-term-insurance

Common Law Principles

Utmost good faith under english insurance law.

Importance of “utmost” good faith is not to be ignored as it gives the doctrine a pillar of necessity to be followed in insurance contracts.

Case Law Analysis

Tukeshwari devi vs royal sundaram alliance insurance company ltd & ors.

The deceased Shashi Kumar Mahato was killed in an accident by an unnamed Omni van which was driven by the negligent driving.

Insurance Law

Hospital management and medical insurance laws.

Health is a part of the State List with each state retaining sole jurisdiction over the formulation of policies in this regard.

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ASSIGNMENT OF INSURANCE POLICY

BE IT KNOWN, for value received, the undersigned ____________________________ of ____________________________ hereby irrevocably transfers and assigns to ____________________________ all legal and beneficial right, title and interest in and to the within policy of insurance standing in my name and known as Policy No. ____________________________ issued by the ____________________________ Insurance Company. I also assign all cash values, proceeds and benefits thereto arising, subject to the conditions of said policy and the requirement of the issuing underwriter: The undersigned warrants that it has full authority to transfer said policy, and shall execute all further documents as may be required, by the underwriter. This assignment shall be binding upon and inure to the benefit of the parties, their successors, assigns and personal representatives. Signed this ________ day of _________________ , 20 ____ . In the presence of: ____________________________ Witness ____________________________ Assignor's Signature

What Is a Collateral Assignment of Life Insurance?

Investopedia contributors come from a range of backgrounds, and over 24 years there have been thousands of expert writers and editors who have contributed.

Charlene Rhinehart is a CPA , CFE, chair of an Illinois CPA Society committee, and has a degree in accounting and finance from DePaul University.

A collateral assignment of life insurance is a conditional assignment appointing a lender as an assignee of a policy. Essentially, the lender has a claim to some or all of the death benefit until the loan is repaid. The death benefit is used as collateral for a loan.

The advantage to using a collateral assignee over naming the lender as a beneficiary is that you can specify that the lender is only entitled to a certain amount, namely the amount of the outstanding loan. That would allow your beneficiaries still be entitled to any remaining death benefit.

Lenders commonly require that life insurance serve as collateral for a business loan to guarantee repayment if the borrower dies or defaults. They may even require you to get a life insurance policy to be approved for a business loan.

Key Takeaways

How a Collateral Assignment of Life Insurance Works

Collateral assignments make sure the lender gets paid only what they are due. The borrower must be the owner of the policy, but they do not have to be the insured person. And the policy must remain current for the life of the loan, with the policy owner continuing to pay all premiums . You can use either term or whole life insurance policy as collateral, but the death benefit must meet the lender's terms.

A permanent life insurance policy with a cash value allows the lender access to the cash value to use as loan payment if the borrower defaults. Many lenders don't accept term life insurance policies as collateral because they do not accumulate cash value.

Alternately, the policy owner's access to the cash value is restricted to protect the collateral. If the loan is repaid before the borrower's death, the assignment is removed, and the lender is no longer the beneficiary of the death benefit.

Insurance companies must be notified of the collateral assignment of a policy. However, other than their obligation to meet the terms of the contract, they are not involved in the agreement.

Example of Collateral Assignment of Life Insurance

For example, say you have a business plan for a floral shop and need a $50,000 loan to get started. When you apply for the loan, the bank says you must have collateral in the form of a life insurance policy to back it up. You have a whole life insurance policy with a cash value of $65,000 and a death benefit of $300,000, which the bank accepts as collateral.

So, you then designate the bank as the policy's assignee until you repay the $50,000 loan. That way, the bank can ensure it will be repaid the funds it lent you, even if you died. In this case, because the cash value and death benefit is more than what you owe the lender, your beneficiaries would still inherit money.

Alternatives to Collateral Assignment of Life Insurance

Using a collateral assignment to secure a business loan can help you access the funds you need to start or grow your business. However, you would be at risk of losing your life insurance policy if you defaulted on the loan, meaning your beneficiaries may not receive the money you'd planned for them to inherit.

Consult with a financial advisor to discuss whether a collateral assignment or one of these alternatives may be most appropriate for your financial situation.

Life insurance loan (policy loan) : If you already have a life insurance policy with a cash value, you can likely borrow against it. Policy loans are not taxed and have less stringent requirements such as no credit or income checks. However, this option would not work if you do not already have a permanent life insurance policy because the cash value component takes time to build.

Surrendering your policy : You can also surrender your policy to access any cash value you've built up. However, your beneficiaries would no longer receive a death benefit.

Other loan types : Finally, you can apply for other loans, such as a personal loan, that do not require life insurance as collateral. You could use loans that rely on other types of collateral, such as a home equity loan that uses your home equity.

What Are the Benefits of Collateral Assignment of Life Insurance?

A collateral assignment of a life insurance policy may be required if you need a business loan. Lenders typically require life insurance as collateral for business loans because they guarantee repayment if the borrower dies. A policy with cash value can guarantee repayment if the borrower defaults.

What Kind of Life Insurance Can Be Used for Collateral?

You can typically use any type of life insurance policy as collateral for a business loan, depending on the lender's requirements. A permanent life insurance policy with a cash value allows the lender a source of funds to use if the borrower defaults. Some lenders may not accept term life insurance policies, which have no cash value. The lender will typically require the death benefit be a certain amount, depending on your loan size.

Is Collateral Assignment of Life Insurance Irrevocable?

A collateral assignment of life insurance is irrevocable. So, the policyholder may not use the cash value of a life insurance policy dedicated toward collateral for a loan until that loan has been repaid.

What is the Difference Between an Assignment and a Collateral Assignment?

With an absolute assignment , the entire ownership of the policy would be transferred to the assignee, or the lender. Then, the lender would be entitled to the full death benefit. With a collateral assignment, the lender is only entitled to the balance of the outstanding loan.

The Bottom Line

If you are applying for life insurance to secure your own business loan, remember you do not need to make the lender the beneficiary. Instead you can use a collateral assignment. Consult a financial advisor or insurance broker who can walk you through the process and explain its pros and cons as they apply to your situation.

Progressive. " Collateral Assignment of Life Insurance ."

Fidelity Life. " What Is a Collateral Assignment of a Life Insurance Policy? "

Kansas Legislative Research Department. " Collateral Assignment of Life Insurance Proceeds ."

Policy Types

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Russia-related Designations and Designations Updates; Issuance of Russia-related General Licenses

The Department of the Treasury's Office of Foreign Assets Control (OFAC) has issued Russia-related General License 8B , General License 9B , General License 10B , General License 21 , General License 22 , and General License 23 .

In addition, the following names have been added to OFAC's list of Specially Designated Nationals.

The following vessels have been added to OFAC's SDN List:

LADY LEILA (UCGL) Products Tanker 5,075GRT Russia flag; Vessel Registration Identification IMO 9683740; MMSI 273340060 (vessel) [RUSSIA-EO14024] (Linked To: ALFA-LIZING OOO). LADY RANIA (UBBO9) Chemical/Oil Tanker 5,077GRT Russia flag; Vessel Registration Identification IMO 9784893; MMSI 273382620 (vessel) [RUSSIA-EO14024] (Linked To: ALFA-LIZING OOO). LADY SEVDA (UBWL7) Products Tanker 5,075GRT Russia flag; Vessel Registration Identification IMO 9683738; MMSI 273342180 (vessel) [RUSSIA-EO14024] (Linked To: ALFA-LIZING OOO). SV KONSTANTIN (UBUS4) General Cargo 4,860GRT Russia flag; Vessel Registration Identification IMO 9203710; MMSI 273450880 (vessel) [RUSSIA-EO14024] (Linked To: ALFA-LIZING OOO). SV NIKOLAY (UBTU6) General Cargo 5,897GRT Russia flag; Vessel Registration Identification IMO 9482926; MMSI 273215770 (vessel) [RUSSIA-EO14024] (Linked To: ALFA-LIZING OOO).

The following changes have been made to OFAC's SDN List:

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Driving in Moscow – Russian road rules

Car-sharing in moscow.

Yandex.Drive parking at Sheremetyevo Airport

Moscow has the largest car-sharing park in the world with more than 15 000 cars waiting for you to be rented for any amount of time, starting from 1 minute. Cars can usually be left almost anywhere within MKAD and in Moscow airports. City parking is also free for those cars. To be able to rent a car, you should register yourself in an app of the company providing the service. There are more than 15 car-sharing operators in Moscow, here are the market leaders:

Long term car rental in Moscow

Sixt pick up & return office

Hertz, Europcar, Sixt and Avis have offices in three of four Moscow airports ( Sheremetyevo , Domodedovo and Vnukovo ). Budget has no offices in Russia. It is always cheaper to rent a car using company local site, not the international one. For a night pick up you should contact local rent office a few days upon arrival.

Roads & regulations in Russia

Vnukovo exit road

Required documents

Russian driver license, registration certificate and vehicle insurance

Russian registration certificate, driver license and vehicle insurance

While driving in Russia every driver is required to have the following set of documents:

Fines in Russia

Traffic police officers

Traffic police officers can stop every car just to check the documents. Every road inspector must introduce himself pointing his title and last name.

The cameras can record not only speeding but other minor violations as well. Driving along the bus lanes, driving in the oncoming lane, incorrect parking or even driving without a full stop where there’s a stop sign – all those violations are in their competence. Numerous traffic cameras are installed in all city regions along every major road. The detailed list of cameras and places of their location is presented on this site . After the camera registered a violation, the appropriate fine is sent to the owner of the car by post and must be paid for a one-month term (there’s a 50% discount if you pay within 2 weeks). For serious violations (Russia has a zero tolerance policy on drinking and driving), the driving license can be confiscated by a court.

All the fines should be paid only at the bank or via internet, so never give any money (or bank cards) to the road inspectors.

Moscow parking rules

Moscow parking ATM

Moscow has paid parking in the city center, within the Garden Ring. There are several parking zones and also special fares for specific streets. Parking within the Boulevard Ring may cost up to 380 roubles (€5) per hour, 50 roubles (€1) for the first hour and 150 roubles (€2) for every next hour within the Garden Ring and 60 rubles (€1) per hour within the TTK ring.

How to pay:

Maps and traffic in Moscow

Yandex.Maps service

Moscow has a very hard traffic situation. To avoid long traffic jams use Yandex.Maps service. It offers reliable live traffic map (apps are available for iOS , Android and Windows Phone ) with online navigation. Offline Moscow map is available. It is the most popular and up to date service. Yandex can show and search latin-written street names.

In case of an accident in Moscow

Common look of «Notice about accident» form

In a case of a car accident in Moscow, stay right where the accident took place – even if you are in the middle of a busy road – and call 112 (emergency services number, most operators speak English). Provide them with all details of the accident (location, number, and kind of vehicles involved, injuries, etc.). You can also ask somebody else, speaking Russian (e.g. the other driver involved in the accident, your office, your friend) to call them. Then call your rent-a-car company if you hired a car and your insurance company if you are the car’s owner. After that wait for a GIBDD (traffic police) officer. Do not expect the GIBDD officers to speak English. If the damage is small, it is possible to handle the situation and prepare all documents for the insurance company without the presence of a GIBDD officer (whose attendance is not required by law), if both drivers have the insurance policy and the damages are caused only to property, with no injury to people. Both parties have to agree on the reason for the accident and the guilty party, and to fill in both «Notice about accident» forms ( Извещение о дорожно-транспортном происшествии ). According to law, in the case of this simplified procedure of accident reporting, insurance compensation cannot exceed 100 000 rub. (€1,371). It can be increased to 400 000 rub. (€5,483) in case of using insurance company app by providing them photos of the accident.

Getting Russian driver license

Moscow driving school

A foreigner, temporarily staying in Russia can drive with an International Driving Permit (IDP) or national driving license, translated into Russian and notarized. Foreigners that are going to stay in Russia for more than six months must obtain a Russian driving license. To apply for a Russian driving license, you must provide the following documents:

If your national driving license is still valid, you will only have to pass a general driving test. If your license has expired, you must also pass a practical driving exam to get the Russian license. However, to do so, you must speak fluent Russian: the theoretical and practical instruction is conducted only in Russian. If you want to get your first driving license in Russia, you should also go to a local driving school, pass a medical test, have about two months of theoretical and practical driving instruction, and pass state driving exams.

Moscow gas stations

Gazpromneft station

We suggest you to fill up at good gas stations nets, such as Lukoil, BP, Rosneft, Shell, Gazpromneft or TNK. Gas stations are particularly can be met outside the Garden Ring. The price of petrol in Russia is still significantly lower than in Europe.

Winter driving in Moscow

Snowfall near GUM

Driving in Moscow in winter could be a difficult thing, especially if you are not used to such weather conditions. During the winter period, remember to keep in your car a good snow brush and an anti-frost windshield washer fluid. Before winter arrives, have your car protected with winter tires. Studded tires are allowed and highly recommended outside of Moscow. It is better to change tires in advance – in autumn, and not to wait until the first snow. Otherwise, you run the risk of spending a lot of time in queues to service stations. Do not hurry to change winter tires in spring; it is better to wait until April.

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How to Deal With Rising Auto Insurance Rates

Premiums are up more than inflation, as insurers deal with rising repair bills and higher car rental rates. But consumers do have some options, experts say.

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By Ann Carrns

If you’ve recently gotten a more expensive car insurance bill, you’re not alone.

Auto insurance costs were up about 15 percent in March from a year earlier, significantly higher than the latest reading on overall inflation of 5 percent . The average annual premium is about $2,000 , according to the personal finance website Bankrate.

And car insurance prices are expected to continue rising. This week, the chief executive of the insurer Progressive said in a shareholder letter that the company planned to be “aggressive with raising rates over the remainder of the year.” Allstate said it expected to pursue additional increases in 2023 “to improve auto insurance profitability.”

Higher costs for repairs, including for both auto parts and labor, along with higher costs for car rentals as a dearth of workers leads to longer repair times, all contribute to costlier claims and higher premiums, industry analysts say. “Everything associated with repairing is going up,” said Stephen Crewdson, a senior director of insurance business intelligence at consumer research company J.D. Power.

As the pandemic has ebbed, more drivers have returned to the roads, whether for work or leisure travel, increasing the risk of accidents, said Robert Passmore, department vice president of personal lines with the American Property Casualty Insurance Association, an industry group. Bad habits acquired during the pandemic, like driving at faster speeds, have lingered, he added.

Doug Heller, director of insurance with the Consumer Federation of America, said many good drivers are being penalized with rates based on factors that have little to do with their driving. In most states, you may pay higher premiums if you have poor to fair credit, even if you have a pristine driving record. Insurers use a variation of consumer credit scores — similar to the ones lenders use to determine the risk of a borrower repaying debt — as one of several factors to assess a driver’s likelihood of filing an insurance claim.

A recent report by the Consumer Federation of America about insurance premiums in New York found that drivers with perfect driving records and excellent credit pay an average of $730 a year for basic insurance, while drivers with the same driving record but poor credit average almost $2,100. The federation supports eliminating the use of credit scoring in insurance rating, saying it especially harms lower-income customers and people who live in minority neighborhoods. (At least three states — California, Hawaii and Massachusetts — bar the use of credit scoring in setting these premiums, and a few others limit its use.)

Insurers defend giving better rates to drivers with good credit, saying it makes sense because those customers are less likely to file insurance claims. “The vast majority of customers get a better rate because we’re using credit scoring,” Mr. Passmore said.

Car insurance is hard to avoid because basic coverage is mandatory in most states. So what can you do to lower your bill? Chuck Bell, programs director of advocacy at Consumer Reports, recommends seeking out three or four quotes from different insurers to see if they can offer lower rates. Many consumers remain with the same insurer for decades, he said, but it’s smart to check prices from time to time. “We think you should shop annually,” he said.

While many people “would rather get a root canal,” he said, getting auto insurance quotes isn’t difficult. He suggests calling insurers on the phone, but you can also get quotes directly on insurer websites. (Sites that aggregate information can give you a general idea, he said. But for specific quotes, it’s best to deal directly with insurers or independent agents that represent multiple carriers.) Have your current policy handy so you can easily compare coverage.

The higher premiums are, in fact, pushing drivers to shop around for lower rates, according to recent findings from J.D. Power. “They’re actively looking for a better deal,” Mr. Crewdson said.

The share of households shopping for auto insurance in the prior month averaged 13 percent in March , the highest since mid-2021, according to J.D. Power, which based its findings on daily online surveys of up to 1,000 consumers. The average switch rate — households who changed insurers in the prior month — ticked above 4 percent in March, compared with an average of 3.6 percent for all of 2022 and 3.4 percent for 2021.

If you’re looking to buy a car, you can help keep insurance costs down from the start when car shopping, by focusing on models that are less costly to insure, Mr. Bell said. Rather than a large pickup truck or S.U.V., consider crossover vehicles, he said, which tend to be less expensive to insure.

If your car is an older model with a lower value, you could cut your premium by reducing collision coverage, which pays to fix or replace your car when it’s damaged in a crash with another car or an object like a fence, and comprehensive coverage, which covers the theft of your car and damage from things like branches falling on it.

Insurers also offer usage-based insurance, which involves having a device in your car that monitors your mileage and driving habits. The insurer then factors the data into your premium. If you are a safe driver and comfortable sharing data with your insurer, or if you are driving less, you could benefit. “It’s a way to save money, for some people,” Mr. Bell said.

Here are some questions and answers about how to lower your car insurance premiums:

Would improving my credit score help?

Raising your credit score may help lower your premium. Paying your bills on time and avoiding maxing out your credit cards — keeping what credit bureaus call “utilization” low — can help increase your score. You should also limit the number of new credit card accounts you open and loans that you take out. You can check your credit report for accuracy free by visiting www.annualcreditreport.com .

Some insurers don’t use credit scoring in setting premiums — CURE Auto Insurance, for instance, says it does not — so it’s worth asking about when you are shopping for coverage.

Can raising my deductible lower my premium?

Yes. Choosing a higher deductible — the portion of the bill for a claim that you are responsible for, before the insurance policy pays — can lower your premium. Going from a deductible of $500 to $1,000 can save an average of about 10 percent on your premium, Mr. Bell said. If you can, put away the savings on your premium to help pay the deductible, should you have to file a claim.

Where can I find information about insurers in my state?

State insurance departments may have information to help you compare rates as well as service levels at different insurers. Texas , for instance, has a detailed tool for getting quotes, and Massachusetts offers a spreadsheet to help with comparisons. The National Association of Insurance Commissioners offers a map of state insurance departments, and maintains a complaint index that consumers can use to see if their insurance company is above or below average.

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https://www.wsj.com/articles/radiology-group-sues-broker-over-lapsed-cyber-insurance-policy-c3dee8b5

Pro Cyber News

Radiology Group Sues Broker Over Lapsed Cyber Insurance Policy

Raleigh company alleges cyber insurance expired without its knowledge on the eve of a hack, one cyber insurer estimates that attacks against healthcare-related organizations rose by 750% globally from february to march..

A radiology group in North Carolina is suing its insurance broker, alleging the company’s cyber policies were allowed to lapse just before a ransomware attack—and that it only found out when it tried to make a claim.

Raleigh Radiology Associates filed a lawsuit in federal court on April 28, claiming that the broker, the Risk Management Services unit of insurance specialist Arthur J. Gallagher , didn’t inform the company that its existing policies had lapsed as of Feb. 15, 2021, two days before the attack.

Gallagher had been working with Raleigh Radiology for months before the lapse to renew its existing policies, or to secure new ones, but failed to do so despite the submission of required paperwork, according to the complaint.

Gallagher declined to comment. Raleigh Radiology didn’t immediately respond to a request for comment.

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Cybersecurity.

Cybersecurity news, analysis and insights from WSJ's global team of reporters and editors.

Hackers gained access to Raleigh Radiology’s network on or around Feb. 14, 2021, and deployed ransomware three days later, the company said in court filings. Executives called Gallagher that morning and were told the company didn’t have an active policy.

Raleigh Radiology said Gallagher could then offer the company only a $50,000 policy, which wouldn’t cover the financial toll of the hack. Recovery cost Raleigh Radiology around $330,000, according to the lawsuit, plus an estimated business loss of $685,000 in net revenue while its systems were down. The company spent an additional $5,000 replacing computer equipment, it said in court papers, and didn’t resume normal operations until March 25, 2021.

Raleigh Radiology accuses Gallagher of negligence, breach of contract and breach of fiduciary duty. It is seeking damages from Gallagher relating to its costs from the hack. On May 17, the case was selected by the District Court for the Eastern District of North Carolina for mediation.

Ransomware has plagued companies for years, and medical facilities have been particularly hard-hit, owing to the sensitive financial and personal information they keep on patients.

Insurers say that ransomware attacks generally declined during 2022, but rose sharply from February to March this year. Corvus Insurance Holdings, a cyber insurer, estimates that attacks against healthcare-related organizations rose by 750% globally during this period.

Cyber insurance has also been challenging to get for many companies, which find themselves ineligible for coverage because they don’t meet underwriting standards that have toughened in recent years. Reviewing a company’s security safeguards draws out the time it takes to renew policies or secure new ones, said Bud Broomhead, chief executive of Viakoo, which specializes in cybersecurity for environments such as clinics and hospitals.

“The idea that an organization could submit its paperwork and almost immediately be given coverage doesn’t meet the reality of cyber insurance,” he said.

Insurers now require extensive audits of infrastructure and digital defenses as part of the application process, Broomhead said. Unlike other areas such as auto, home or life insurance, there aren’t extensive historical benchmarks in cyber to enable quick decision-making, he said.

Companies should also be certain that, for critical areas such as insurance, they are actively monitoring their third-party vendors, said Mark Millender, senior adviser for global executive engagement at cybersecurity company Tanium, which works with healthcare organizations.

“That Raleigh Radiology Associates was hit within two days of its policies lapsing underscores the unpredictable, opportunistic nature of human threat actors,” he said.

Write to James Rundle at [email protected]

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Farmington Hills — When Brian Benderoff and Dr. Billy Gonte returned from a trip to Las Vegas in 2016, they were stopped by federal agents who discovered $1.6 million in cash in their luggage.

Gonte told the Homeland Security investigators that their gambling trip was partly financed by people who thought they were making business investments, according to federal court records.

But Benderoff, sitting all day in a federal detention facility near Detroit Metro Airport, had an even more riveting story, one unrelated to the Vegas trip.

Benderoff said he and Gonte had been involved in an insurance scam with one of the highest-paid business executives in Michigan, Gary Shiffman, chief executive of Sun Communities, a Southfield firm that develops manufactured home communities, according to Benderoff and a motion filed last year in a federal criminal case against him.

Shiffman and the insurance deal also are mentioned in an ongoing lawsuit filed in 2021 in Oakland County Circuit Court.

The lawsuit, filed by Benderoff's wife, Amy Mosher, said Shiffman worked with Gonte to fraudulently sell life insurance policies covering Shiffman's mother. Shiffman, who was the beneficiary, received higher payments after Gonte made his mother seem unhealthy. Mosher is suing Shiffman for ownership of an unrelated life insurance policy. The case is scheduled to go to trial on June 12.

A lawyer for Shiffman, Jeff Heuer, declined to speak to The Detroit News for this story. In a court motion in April, he said the allegation of insurance fraud is false and scandalous.

“(Mosher) has made this litigation as annoying, evasive, expensive and unpleasant as possible to extort a large settlement payment,” Heuer wrote.

Shiffman, 68, was interviewed by prosecutors and turned over personal information during a five-year federal investigation that didn’t lead to charges against him, Heuer said in the motion. He and Shiffman declined to answer questions about the insurance deals.

While no charges were filed against Shiffman, the investigation led to the indictment of Gonte, 62, and Benderoff, 56, in 2020. Those charges were dismissed in September when a judge ruled the statute of limitations had expired. Gonte, who doesn't have a lawyer, declined to comment.

The seizure of cash at the airport sparked two federal investigations whose only conviction was a single minor figure, but the repercussions continue today with a legal squabble that might cost a West Bloomfield Township woman her home.

The saga includes alleged blackmail, a private handwritten agreement, $40,000-a-night villas, a doctor charged with switching a patient’s blood, a lawyer convicted of swindling clients, a high roller gambler amassing seven-figure debts and cameo appearances by actor Ben Affleck and basketball star Kevin Durant.

Details of the alleged activities were gathered through interviews and the review of thousands of pages of depositions, affidavits, court transcripts, financial documents, medical reports and investigative reports in federal and state court files.

“I worked 23 years as a federal prosecutor, and this, by far, is one of the most crazy cases I’ve ever been in,” said Michael Bullotta, a Detroit attorney who represented Benderoff.

A business executive's struggles

Shiffman, who made $14 million in 2021, is worth $237 million, according to Benzinga financial news. In 2008, however, he was hurting. So were other business executives as a global financial crisis decimated the housing market, caused the stock market to plummet and led to the failure of major companies.

The calamity left Shiffman with an adjusted gross income of negative $4.9 million, according to his 2009 federal tax return. He owed $30 million to various creditors, including his mother, according to the federal indictment of Gonte and Benderoff.

A financial statement prepared by Shiffman's assistant in 2009 showed that, while he owned considerable assets, he had just $120,000 in cash, said the indictment. He was facing $2 million a year in premiums for life insurance policies he had on his mother.

He tried to unload the six policies worth $63 million but failed several times. He then sought help from Gonte, an internist from West Bloomfield who worked with close friend Benderoff on those types of sales.

In the kitchen of Shiffman’s home in West Bloomfield, he wrote a one-page, handwritten agreement in 2009 that gave Gonte up to 30% of the proceeds of the sales, according to the indictment.

“I hereby grant Bill Gonte an unassignable interest in the proceeds of a sale of life insurance policies on Lois Shiffman,” reads a copy of the agreement, which is an exhibit in the Mosher lawsuit.

Shiffman said in a deposition in the lawsuit that the agreement wasn’t secret but that he didn’t use an attorney to draft it because Gonte wanted it done quickly. He said 30% was a high payment but represented a net benefit.

The reason the insurance policies were hard to sell was his mother’s good health, financial experts said.

Potential buyers would have to make premium payments, so the longer Lois Shiffman lived, the more it would cost them. A person with a short life expectancy is more lucrative.

Gonte used blood from a diabetic patient to create a false lab test in 2010 that said Lois Shiffman had diabetes, according to the indictment. She also visited a psychiatrist in Birmingham who falsely diagnosed her with severe dementia.

Gonte was asked during a deposition in March about another diagnosis by him that Lois Shiffman might have cancer.

“It was highly unlikely,” he said. “It was almost — it was almost an absurdity, like all the other diagnoses.”

Benderoff, a Farmington Hills resident who worked for an insurance broker, facilitated communications and meetings for the sales, said the indictment.

The false medical reports lowered Lois Shiffman’s life expectancy from 14 years to 7.5 years, according to the indictment.

Gary Shiffman promptly sold five of the six policies for $6.9 million in 2010 and 2011, according to a spreadsheet prepared by federal prosecutors.

Payments lead to big bets

Benderoff enjoyed gambling big money, six-figures big, he told The News during several interviews. He played blackjack during monthly treks to casinos in Las Vegas, Florida and Connecticut.

Benderoff, who is excitable and garrulous, said he has a genius-level IQ and a photographic memory.

All gamblers experience swings in their winnings, and for Benderoff, the changes were huge. That’s what happens when one bets up to $50,000 per hand.

In 2006, he was charged with failing to repay $300,000 in loans in Atlantic City, New Jersey, according to New Jersey court records. He pleaded guilty to failure to make a lawful disposition and was sentenced to 18 months of probation.

The adrenaline rush was just part of the allure. Casinos spend lavishly on high rollers knowing the cost is usually offset by their gaming losses.

So Benderoff traveled by private jet, drank Cristal, smoked Cuban cigars, swam in a private pool and received free tickets to the Super Bowl.

He played poker with Affleck, basketball with Durant and took selfies with Kevin Costner.

He received so many Rolex, Cartier and Patek Philippe watches that he started a collection.

A lawyer pleads to wire fraud

The odds caught up with Benderoff as his gambling losses outweighed the wins.

A friend, Rob Gross, a lawyer from Clawson, sought short-term, high-interest loans from his clients, said a criminal complaint against him.

Gross, 54, told them it was for various investments: the selling of life insurance policies, a business obtaining a license to sell medical marijuana in Colorado, paying a lien on equipment that would allow a business to be sold.

“It’s about time you and I made some money,” he wrote in an email to one client in 2016.

Instead of investing the money, Gross sent it to a bank account owned by Benderoff and Gonte and used by Benderoff to pay his gambling debts, according to the complaint.

Gross was charged with fraud in securing $3.6 million in loans from six people from 2013 to 2016. He pled guilty to one count of wire fraud in 2017 and was sentenced to three years in prison. His law license was suspended for four years.

Gonte and Benderoff, who cooperated in the federal investigation, weren’t charged.

Gambler pleads for more loans

Benderoff and Gonte also sought money from Shiffman.

The business executive had paid them $1.9 million for their help in the sale of his mother's life insurance policies, but they said he owed them more.

When Shiffman balked, they threatened to tell authorities about his alleged role in the sale, Benderoff told The News.

Shiffman eventually gave them an additional $1.5 million from 2013 to 2015, according to depositions and exhibits in the Mosher lawsuit.

Shiffman said during a deposition that they were loans. But Benderoff and Gonte said they were payments dressed up as loans to hide the fact Shiffman was paying them so much money. The money was never repaid.

In 2015, Shiffman filed a lawsuit against Gonte for failing to repay a $700,000 loan from 2013. Gonte and Benderoff then dropped off an envelope at Shiffman’s office that contained a copy of their agreement and the medical records where he switched his mother’s blood with another patient’s, Benderoff said.

Shiffman dropped the lawsuit three weeks later.

Benderoff, who has kept records of his dealings with Shiffman for 13 years, was asked by The News if he was strong-arming the business executive.

“We did have to pressure him in terms of reminding him,” he said. “He put everyone in harm’s way, so he needs to honor his agreement (to pay them).”

During his deposition in the Mosher lawsuit, Shiffman repeatedly denied being pressured to make the loans, saying there was nothing to pressure him about.

Asked why he continued to make the loans after earlier ones weren’t repaid, Shiffman said he appreciated how Benderoff and Gonte had helped him with his mother’s policies.

'I'm in trouble'

In June 2016, Gross joined Benderoff and Gonte on a trip to Las Vegas. They were there for three weeks while Benderoff, starting with $1 million, won another $1 million on the blackjack tables, he said.

Benderoff and Gonte caught a red-eye flight back to Detroit on June 23. (Gross had returned two days earlier for work.)

The two men carried $1.6 million in cash, two checks worth $1 million and a Rolex watch, according to a Homeland Security investigative report. The stacks of $10,000 in $100 bills were wrapped in Caesar Palace casino bands.

Besides the $1 million stake and $1 million in winnings, the other $600,000 was additional money Benderoff had brought for the trip, he said.

Asked why he took the winnings in cash, Benderoff said the loans from Gross’ clients had to be repaid quickly, and he didn’t want to wait for a check to clear.

A Transportation Security Administration screener spotted the cash at the airport in Las Vegas and alerted Homeland Security officials in Detroit. When Benderoff and Gonte got off the plane in Detroit, they were greeted by four law enforcement officials and a police dog.

Benderoff asked to use the airport bathroom, and sitting in a stall with a federal agent on the other side of the door, he sent an email to his attorney.

“I’m in trouble,” he wrote.

Homeland Security agents brought the two men to their facility and interrogated them the entire day about where they got the money to gamble with.

The agents told Benderoff that Gonte was giving them incriminating evidence against him. Benderoff then told them about the life insurance deals involving Shiffman’s mother.

In 2020, Benderoff and Gonte were charged with conspiracy and six counts of wire fraud affecting a financial institution, which has a statute of limitations of 10 years.

They argued in federal court that Wells Fargo, the bank involved in the insurance sales, wasn’t financially hurt by the alleged fraud because it merely facilitated the exchange of paperwork and held the sale proceeds in escrow before disbursing them.

A simple charge of conspiracy to commit wire fraud has a statute of limitations of five years, which expired, they said. Detroit U.S. District Judge Nancy Edmunds agreed with their argument, dismissing the case in September.

Fighting about death benefits

In her lawsuit against Shiffman, Mosher is fighting for the death benefits of a New York woman named Coula Johnides. Mosher said she received the woman’s life insurance policy from Gonte in 2016.

But Shiffman said Gonte gave the policy to him in 2014 as compensation for extending a $700,000 loan he made to Gonte the year before.

Gonte said in a deposition in the lawsuit that he never gave the policy to Shiffman. He said the loan was a sham that was never meant to be repaid, that it was payment to him and Benderoff for their roles in the sale of Shiffman's life insurance policies.

“There was no loan. There was nothing,” Gonte said during the deposition last month. “It was just another papier-mache, window-dressing sham loan.”

When Johnides died in 2018, Shiffman and a friend pocketed $800,000 in death benefits, Mosher said.

Mosher said she was confused by Shiffman's action in taking something that she believes belongs to her.

"It angers me that some people in this world seem to be able to get away with anything. You can quote that," she said.

In November, Shiffman tried to foreclose on the West Bloomfield home of Lori Selonke, who is close friends with Benderoff. Selonke then filed her own lawsuit against Shiffman, saying the foreclosure was being done in retaliation for Mosher’s accusations.

Selonke’s condo in West Bloomfield was collateral for a $550,000 loan from Shiffman to Gonte and Benderoff in 2015.

Shiffman never took action on the loan, which has been unpaid for seven years, until Mosher filed a lawsuit against him, Selonke said.

In December, Selonke received a temporary restraining order that prevented the sale of her home one hour before a public auction.

All the legal wrangling in the various cases had Heuer, Shiffman’s lawyer, shaking his head during a January hearing.

“So there’s enough here for probably a decade of ‘Law & Order’ episodes,” he said.

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Assignment of insurance policies and claims
A legal assignment (also known as a statutory assignment) is an assignment that meets the requirements set out in section 136 of the Law of Property Act 1925 (LPA 1925) or, if the policy is a marine insurance policy, section 50 of the Marine Insurance Act 1906 (MIA 1906) (see Legal assignment ). An assignment that does not constitute a legal ...
assignment
assignment. Assignment is a transfer of legal rights under or interest in an insurance policy to another party.
PDF Assignment of insurance policies and claims in insolvency
Equitable or legal assignment The rules which govern whether an assignment is a legal or equitable assignment apply equally when seeking to assign the right to recover or claim under an insurance policy. In particular, a legal or statuto-ry assignment is one which satisfies the requirements set out
Post-Loss Assignments of Claims Under Insurance Policies
However, insurance policies generally have anti-assignment clauses which prohibit the assignment of the policy, or an interest in the policy, without the insurer's consent.
Assignment of Rights Under an Insurance Policy
The insurance policy will usually have a clause that explicitly prohibits the assignment of the policy. The only exception is that the policy may be assigned upon the death of a beneficiary. ... However, insurance companies have been known to object to this assignment, especially if they have legal difficulty of their own with the contractor.
How Does Your Insurance Policy's "Assignment of Benefits" Clause Affect
At common law, insureds were prohibited from assigning their insurance policy benefits and other underlying rights. State legislatures, however, have allowed AOB, and many state courts will permit the assignment of insurance policies. The problems stemming from AOB have led to a mountain of litigation and debates about whether it should be ...
Assignment in Insurance Policy
Types of assignment. Assignment may take two forms: Conditional Assignment. Absolute Assignment. 1. Conditional Assignment. It would be useful where the policyholder desires the benefit of the policy to go to a near relative in the event of his earlier death. It is usually effected for consideration of natural love and affection.
Assignment of insurance policies and claims in insolvency
Equitable or legal assignment. Effecting a legal assignment. Drafting an assignment of rights under an insurance policy. Assignments of rights under certain insurance contracts subject to specific statutory regimes. Enforcement of contractual rights by third parties pursuant to statutory regimes. Contracts (Rights of Third Parties) Act 1999.
Assignment of Insurance Policy Sample Clauses
Assignment of Insurance Policy. The Seller shall have delivered to the Purchaser evidence of the assignment of the AIG Specialty Insurance Company, Buyer -Side Representation and Warranties Insurance Policy No. 49156550 to the Purchaser or its designee, and evidence of the amendment of such policy to remove the Seller and its post - Closing ...
Assignment of Life Insurance Policy
2 mins 55 secs. Assignment of a Life Insurance Policy simply means transfer of rights from one person to another. The policyholder can transfer the rights of his insurance policy to another for various reasons and this process is called Assignment. The person who assigns the policy, i.e. transfers the rights, is called the Assignor and the one ...
Assignment of insurance policies and claims
An overview of the legal principles that apply when assigning an insurance policy or the right to receive the insurance monies due under the policy to a third party. It considers the requirements that must be met for the assignment to be valid and explains the difference between assignment, co-insurance, noting of interest and loss payee clauses.
Post-Loss Assignments of Claims Under Insurance Policies in Louisiana
However, insurance policies generally have anti-assignment clauses which prohibit the assignment of the policy, or an interest in the policy, without the insurer's consent.
Nomination and Assignment under Insurance Contracts
The term assignment itself means you assign something to someone else. In term life insurance, the assignment of the policy describes the action of assigning legal rights as well as policy ownership to someone else. The person who assigns the policy is known as an Assignor and the person who has been assigned the policy is known as an Assignee.
Assignment of Insurance Policy
ASSIGNMENT OF INSURANCE POLICY. BE IT KNOWN, for value received, the undersigned _____ of _____ hereby irrevocably transfers and assigns to _____ all legal and beneficial right, title and interest in and to the within policy of insurance standing in my name and known as Policy No. _____ issued by the _____ Insurance Company.
Assignment Of Rights Under Insurance Policy
In insurance the assignment means assignment of rights under the contract. The liability insurance policy imposes cer- tain obligations on both the insured and the insurer whenever the insured makes a claim under the policy.Assignment of rights to collect under an insurance policy after a loss are common.
A Collateral Assignment of Life Insurance
Katharine Beer. A collateral assignment of life insurance is a conditional assignment appointing a lender as an assignee of a policy. Essentially, the lender has a claim to some or all of the ...
Finance
To recommend sound fiscal policies to the City Council and to provide quality, efficient financial services to the public with pleasant and friendly reception, referral, and public services; promote short and long range goals for the improvement in the delivery of staff and public services; insure adequate staffing levels to meet departmental ...
Russia-related Designations and Designations Updates; Issuance of
The Department of the Treasury's Office of Foreign Assets Control (OFAC) has issued Russia-related General License 8B, General License 9B, General License 10B, General License 21, General License 22, and General License 23. In addition, the following names have been added to OFAC's list of Specially Designated Nationals.
Moscow City Court in Moscow, TN
Depending on local laws and specific court policies, exemptions MAY include persons over age 70, and those having recently served on a jury (usually within 1-3 years depending on county policy). In the state of Tennessee, there are possible exemptions for attorneys, teachers, pharmacists, doctors, sole proprietors, nurses, CPAs, clergy, and may ...
Driving in Moscow
According to law, in the case of this simplified procedure of accident reporting, insurance compensation cannot exceed 100 000 rub. (€1,371). It can be increased to 400 000 rub. (€5,483) in case of using insurance company app by providing them photos of the accident.
How to Deal With Rising Auto Insurance Rates
Yes. Choosing a higher deductible — the portion of the bill for a claim that you are responsible for, before the insurance policy pays — can lower your premium. Going from a deductible of $500 ...
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Raleigh Radiology Associates filed a lawsuit in federal court on April 28, claiming that the broker, the Risk Management Services unit of insurance specialist Arthur J. Gallagher, didn't inform ...
NC mobile home owners face insurance rate increases of 10% and 15%
A legal dispute with the North Carolina Rate Bureau on its proposed insurance rate increases for mobile home policies has been settled.
Detroit feds' discovery of luggage with $1.6M leads to legal saga
Mosher said she received the woman's life insurance policy from Gonte in 2016. But Shiffman said Gonte gave the policy to him in 2014 as compensation for extending a $700,000 loan he made to ...

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Assignment in Insurance Policy | Meaning | Explanation | Types

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