Third Parties (Rights against Insurers) Act 2010

Transferred rights: supplemental

8 Limit on rights transferred

Where the liability of an insured to a third party is less than the liability of the insurer to the insured (ignoring the effect of section 1), no rights are transferred under that section in respect of the difference.

9 Conditions affecting transferred rights

(1) This section applies where transferred rights are subject to a condition (whether under the contract of insurance from which the transferred rights are derived or otherwise) that the insured has to fulfil.

(2) Anything done by the third party which, if done by the insured, would have amounted to or contributed to fulfilment of the condition is to be treated as if done by the insured.

(3) The transferred rights are not subject to a condition requiring the insured to provide information or assistance to the insurer if that condition cannot be fulfilled because the insured is—

(a) an individual who has died, or

(b) a body corporate that has been dissolved.

(4) A condition requiring the insured to provide information or assistance to the insurer does not include a condition requiring the insured to notify the insurer of the existence of a claim under the contract of insurance.

(5) The transferred rights are not subject to a condition requiring the prior discharge by the insured of the insured’s liability to the third party.

(6) In the case of a contract of marine insurance, subsection (5) applies only to the extent that the liability of the insured is a liability in respect of death or personal injury.

(7) In this section—

• “contract of marine insurance” has the meaning given by section 1 of the Marine Insurance Act 1906;

• “dissolved” means dissolved under—

  (a)

  Chapter 9 of Part 4 of the Insolvency Act 1986,

  (b)

  section 1000, 1001 or 1003 of the Companies Act 2006, or

  (c)

  Chapter 9 of Part 5 of the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N. I. 19));

• “personal injury” includes any disease and any impairment of a person’s physical or mental condition.

10 Insurer’s right of set off

(1) This section applies if—

(a) rights of an insured under a contract of insurance have been transferred to a third party under section 1,

(b) the insured is under a liability to the insurer under the contract (“the insured’s liability”), and

(c) if there had been no transfer, the insurer would have been entitled to set off the amount of the insured’s liability against the amount of the insurer’s own liability to the insured.

(2) The insurer is entitled to set off the amount of the insured’s liability against the amount of the insurer’s own liability to the third party in relation to the transferred rights.