Section 10
of Motor Vehicles Insurance (Third Party Risks) Act
Section 10
(1)
Where under any policy issued for the purposes of this Act, a person (hereinafter called “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 being made or a resolution for a voluntary winding-up being passed with respect of 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,
Motor Vehicles Insurance
(Third Party Risks)
B.L.R.O. 3/2014 13
if, either before or after that event, any such liability is incurred by the insured, his rights against the insurer under the policy, in respect of the liability, shall, notwithstanding the provisions of any written law to the contrary, be transferred to and vest in the third party to whom the liability was so incurred.
(2)
Where an order is made under any law for the time being in force relating to bankruptcy for the administration in bankruptcy of the estate of a deceased debtor, then, if any debt provable in bankruptcy is owing by the deceased in respect of a liability against which he was insured under a policy issued for the purposes of this Act as being a liability to a third party, the deceased debtor’s rights against the insurer under the policy in respect of that liability shall, notwithstanding the provisions of any written law to the contrary, be transferred to and vest in the person to whom the debt is owing.
(3)
Any condition in a policy issued for the purposes of this Act, purporting directly or indirectly to avoid the policy or to alter the rights of the party thereunder upon the happening to the insured of any of the events specified in subsection (1)(a) or (b) or upon the making of an order under any law for the time being in force relating to bankruptcy for the administration in bankruptcy of his estate, shall be of no effect.
(4)
Upon a transfer under subsection (1) or (2), the insurer shall, subject to the provisions of section 12, be under the same liability to the third party as he would have been under to the insured but if the liability of the insurer to the insured —
(a)
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;
(b)
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 section and of sections 11 and 12,
“liabilities to third parties”, in relation to a person insured under any policy of insurance, does not include any liability of that person in the capacity of insurer under some other policy of insurance.
Motor Vehicles Insurance
(Third Party Risks)
(6)
This section and sections 11 and 12 do 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 in which, under any written law making provision for the payment of compensation to workmen for injuries suffered in the course of their employment, the rights of an employer against an insurer in respect of liability for such compensation are transferred to and vested in the third party.
Duty to give necessary information to third parties.