Third Parties (Rights against Insurers) Act 1930 (repealed)

1 Rights of third parties against insurers on bankruptcy &c. of the insured. U.K.

(1) Where under any contract of insurance a person (hereinafter referred to as the insured) is insured against liabilities to third parties which he may incur, then—

(a) in the event of the insured becoming bankrupt or making a composition or arrangement with his creditors; or

(b) in the case of the insured being a company, in the event of a winding-up order [F1 or an administration order] being made, or a resolution for a voluntary winding-up being passed, with respect to the company, or of a receiver or manager of the company’s business or undertaking being duly appointed, or of possession being taken, by or on behalf of the holders of any debentures secured by a floating charge, of any property comprised in or subject to the charge [F1 or of][F2 a voluntary arrangement proposed for the purposes of Part I of the Insolvency Act 1986 being approved under that Part]; if, either before or after that event, any such liability as aforesaid is incurred by the insured, his rights against the insurer under the contract in respect of the liability shall, notwithstanding anything in any Act or rule of law to the contrary, be transferred to and vest in the third party to whom the liability was so incurred.

(2) Where [F3 the estate of any person falls to be administered in accordance with an order under section][F4 421 of the Insolvency Act 1986], then, if any debt provable in bankruptcy [F5 (in Scotland, any claim accepted in the sequestration)] is owing by the deceased in respect of a liability against which he was insured under a contract of insurance as being a liability to a third party, the deceased debtor’s rights against the insurer under the contract in respect of that liability shall, notwithstanding anything in [F3 any such order], be transferred to and vest in the person to whom the debt is owing.

(3) In so far as any contract of insurance made after the commencement of this Act in respect of any liability of the insured to third parties purports, whether directly or indirectly, to avoid the contract or to alter the rights of the parties thereunder upon the happening to the insured of any of the events specified in paragraph (a) or paragraph (b) of subsection (1) of this section or upon the [F6 estate of any person falling to be administered in accordance with an order under section [F7 421 of the Insolvency Act 1986]], the contract shall be of no effect.

(4) Upon a transfer under subsection (1) or subsection (2) of this section, the insurer shall, subject to the provisions of section three of this Act, be under the same liability to the third party as he would have been under to the insured, but—

(a) if the liability of the insurer to the insured exceeds the liability of the insured to the third party, nothing in this Act shall affect the rights of the insured against the insurer in respect of the excess; and

(b) if the liability of the insurer to the insured is less than the liability of the insured to the third party, nothing in this Act shall affect the rights of the third party against the insured in respect of the balance.

(5) For the purposes of this Act, the expression “liabilities to third parties,” in relation to a person insured under any contract of insurance, shall not include any liability of that person in the capacity of insurer under some other contract of insurance.

(6) This Act shall not apply—

(a) where a company is wound up voluntarily merely for the purposes of reconstruction or of amalgamation with another company; or

(b) to any case to which subsections (1) and (2) of section seven of the M1 Workmen’s Compensation Act 1925, applies.

Textual Amendments

F1 Words inserted by Insolvency Act 1985 (c. 65, SIF 66), s. 235(1), Sch. 8 para. 7(2)(a)

F2 Words substituted by Insolvency Act 1986 (c. 45, SIF 66), s. 439(2), Sch. 14

F3 Words substituted by Insolvency Act 1985 (c. 65, SIF 66), s. 235(1), Sch. 8 para. 7(2)(b)

F4 Words substituted by Insolvency Act 1986 (c. 45, SIF 66), s. 439(2), Sch. 14

F5 Words inserted (S.) by Bankruptcy (Scotland) Act 1985 (c. 66, SIF 11:2), s. 75(1), Sch. 7 para. 6(1)

F6 Words substituted by Insolvency Act 1985 (c. 65, SIF 66), s. 235(1), Sch. 8 para. 7(2)(c)

F7 Words substituted by Insolvency Act 1986 (c. 45, SIF 66), s. 439(2), Sch. 14

Marginal Citations

M1 1925 c. 84.