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Assignment
Assignment
Essential Conditions
All Assignments have to satisfy the following conditions
- The person assigning the policy must have absolute right or
interest vesting in him in respect of the policy either in terms
of the policy contract or by virtue of the previous assignment
in his favour.
- The assignor must be major and otherwise competent to contract.
- He must not be subject to any legal disqualifications.
- Assignment must be supported by consideration which may be:
Valuable Consideration-money or money’s worth
Good or moral or meritorious consideration i.e. natural love
and affection which a person may have towards those who are
related to him/her by blood or marriage or by way of gift in
favour of them
- Assignment must not be opposed to any Law for the time being
in force; for example no assignment can be made in contravention
of Exchange Control Regulations. Assignment of a policy
by a resident of India to a non-resident of India, so also by
a non-resident to another non-resident in different countries
cannot be made without the prior approval of the Reserve Bank
of India. However, policy can be assigned by a non-resident
of India to a resident of India without Reserve Bank of India’s
approval.
- Assignment must be in writing and it must be very clear in the
operative part of the endorsement that interest in the policy
has been transferred and has become vested in the assignee.
- Assignor must affix his signature to the assignment.
- The assignor’s signature must be attested by at least one
witness.
- Assignee should not be subject to legal disqualification.
- Assignment once validly executed becomes effective cannot be
cancelled or rendered ineffectual at the mere will of the Assignor.
- No stamp duty is payable if assignment is executed on the back
of the policy.
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