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IIQEPrepStudyingPaper 1
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MPF intermediaries
MPFMPF Intermediaries ExaminationMr Tse is selling his insured car to Ms Yip. Which arrangement for assigning the motor policy to her meets the insurable interest requirement?
Answer: it is assigned when ownership of the car passes to her. With assignment of the contract, both assignor and assignee need insurable interest at the time of assignment. Assigning the policy at the same moment as property in the car passes satisfies this.Why not the others:• it is assigned before she has decided whether to buy the car: before deciding to buy she has no interest in the car at all.• it is assigned a week before she pays for and collects the car: a week before the sale she has no insurable interest in the car.• it is assigned a month after the sale, once she is the registered owner: a month after the sale Mr Tse, the assignor, no longer has an insurable interest.Watch out: Both parties, not just the buyer, must have an interest at the moment of assignment.Rule: Assignment of the insurance contract: assignor and assignee both need insurable interest at the time of assignment.Source: IA P1 Study Notes, 2024 Edition (8th ed., Nov 2024; for exams from 17 Feb 2025), 3.1.6(c), p. 3/3
Both parties, not just the buyer, must have an interest at the moment of assignment.
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