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'Consent to Assignment' Clauses

By Sherilyn Pastor
July 01, 2016

Last month, in Part One of this article (http://bit.ly/1RTe4Cs), we discussed the fact that most insurance policies contain anti-assignment provisions, purporting to prohibit the assignment of interests in the policy without the insurer's consent. Insurers rarely offer their consent to assignments. Thus, whether a policy's anti-assignment clause will void a transfer of insurance proceeds or coverage rights, by contract or operation of law, usually requires an analysis of whether the predecessor corporation is an insured under the policy; whether the predecessor corporation still exists; whether the successor corporation succeeded to the predecessor's liabilities and insurance assets by operation of law; whether the coverage rights or policies were transferred by agreement; and, whether the claim for which the successor seeks coverage constitutes a “chose in action” at the time of the transfer.

Most jurisdictions that have considered these matters agree that, after a loss, an insurance policy's consent-to-assignment clause is unenforceable. In fact, California, which had until recently been in the minority on this issue, now has corrected course with its holding in Fluor Corporation v. Superior Court, 191 Cal.Rptr.3d 498 (Cal. 2015), which we discussed last month. Let's take a look at how California's Flour holding compares with those in similar scenarios nationwide.

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