Question Tag: Assignment

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  • 20 Marks

POB-LAW-AND-PRACTICE – APRIL 2024 – LEVEL III – Q6 – Realizing Assignment of Life Insurance Policy

Case study on bank's surrender of an assigned life insurance policy as security, followed by death of the borrower; advise on procedure for realization upon death and handling executor's demands.

Parkinson Mainnoo, a retired Company Director, has a limit of GHC200,000 on his current account, but with a borrowing at GHC 150,000 the account became inactive twelve months ago. There was no response to your letters and last December you called in the borrowing. Again, there was no response and as you held a legal charge by Mainnoo over an Endowment Life Policy, nominal value GHC 250,000, with a surrender value of GHC 215,000, you surrendered the policy.

Now, seven (7) weeks later, you had a visit from Mr. Mainnoo’s son, David who told you that his father died in hospital last week and that he is named as Executor in the will. He enquires about the Life Policy and is astounded to learn that the bank has surrendered it. He claims that as sole beneficiary, he has, by your action, been deprived of the Capital Value which would have accrued to the estate upon his father’s death. He further states that had the bank required, they would have learnt that his father was seriously ill in hospital. Mr. David Mainnoo, who is a legal executive with a firm of solicitors, says that in any even the bank should have given three (3) months’ notice before realizing the Security and he threatens action as Executor and sole beneficiary.

(a) Advise the bank on the procedure for realizing an Assignment of a Life Insurance Policy in the event of death of the Life Assured. [15 marks]

(b) How should the bank deal with David’s demand? [5 marks]

[Total: 20 marks]

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  • 20 Marks

LPB – OCT 2019 – L3 – Q5 – Life Insurance Policies: Types, Parties, Insurable Interest & Keyman Insurance

Scenario involving a pharmaceutical company insuring a key employee's life as security for a bank overdraft; questions on policy definition, types suitable for bankers, parties involved, insurable interest justification, and impact of employee's resignation on the security.

Life Insurance Policies-Types & Parties, Insurable Interest & Keyman Insurance.

As Executive Director/Retail, you call that 3 years ago, the CEO of Wiafe Chemists Limited (WCL), a small but growing Pharmaceutical Company, and long-standing Customer of your Kokonsa Branch of the Zenith Bank, sought your advice about whether they could ensure the life of their Chief Chemist; on whom the success of the Company largely depended. You advised that the WCL could, and they did.

Today, the CEO calls to your office and informs you that the Chief Chemist has resigned and asks about the status of their overdraft facility limit of GH¢25,000.00 covered by a Legal Assignment of the GH¢55,000.00 Life Policy over the life of the Chief Chemist.

Required: a) Define a Life Policy.   b) State the types of Life Policies available to the Banker as Security for Bankers’ Advances.      c) Who are the parties in a Life Policy; and how will these apply in the above scenario?                                                                              d) Did the WCL have an Insurable Interest in the life of the Chief Chemist; and does the resignation of the Chief Chemist change the status/position of the Security to cause the Bank to request for another facility?

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  • 20 Marks

LPB – APR 2016 – L3 – Q5 – Bank’s Position on Assignment of Term Life Policy as Security

Discuss bank's position on legal assignment of a term life policy as additional security for a mortgage, how assignment is taken and priority over subsequent assignments, effect if premiums stop, payout if suicide, and differences if endowment policy.

The PREDEQ bank gives a mortgage of land for a customer0 \mathrm{}$ and, as an additional security, took an assignment of a 30-year Term Life Policy (not endowment situation) over the customer’s life – the policy monies being payable to the customer’s wife, at maturity on his death. Discuss this bank’s position in the following circumstances:

(a) How the Legal Assignment of the Policy was taken by the PREDEQ Bank: Supposing that someone else, at a later date, also takes an assignment of the Policy, which of the 2 assignments would have priority over the other?

(b) What would happen to the PREDEQ Bank’s security if the customer stopped paying the premiums?

(c) Would the Policy monies be payable if the customer committed suicide?

(d) Will the position be any different of the Policy was an Endowment Life Policy? If yes, indicate

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  • 10 Marks

BL – May 2015 – L1 – SB – Q5a – Contract Law

Define the concept of assignment in relation to insurance and explain the types of assignment possible.

Assignment is ONE of the principles in a contract of insurance.

Required:
i. Define the concept of assignment in relation to insurance contracts. (3 Marks)
ii. State the THREE types of assignment that are possible under an insurance contract. (3 Marks)
iii. “Insurance contracts are contracts uberrimae fidei”. Explain this doctrine, and state any ONE major duty the doctrine imposes on the parties to an insurance contract. (4 Marks)

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  • 20 Marks

POB-LAW-AND-PRACTICE – APRIL 2024 – LEVEL III – Q6 – Realizing Assignment of Life Insurance Policy

Case study on bank's surrender of an assigned life insurance policy as security, followed by death of the borrower; advise on procedure for realization upon death and handling executor's demands.

Parkinson Mainnoo, a retired Company Director, has a limit of GHC200,000 on his current account, but with a borrowing at GHC 150,000 the account became inactive twelve months ago. There was no response to your letters and last December you called in the borrowing. Again, there was no response and as you held a legal charge by Mainnoo over an Endowment Life Policy, nominal value GHC 250,000, with a surrender value of GHC 215,000, you surrendered the policy.

Now, seven (7) weeks later, you had a visit from Mr. Mainnoo’s son, David who told you that his father died in hospital last week and that he is named as Executor in the will. He enquires about the Life Policy and is astounded to learn that the bank has surrendered it. He claims that as sole beneficiary, he has, by your action, been deprived of the Capital Value which would have accrued to the estate upon his father’s death. He further states that had the bank required, they would have learnt that his father was seriously ill in hospital. Mr. David Mainnoo, who is a legal executive with a firm of solicitors, says that in any even the bank should have given three (3) months’ notice before realizing the Security and he threatens action as Executor and sole beneficiary.

(a) Advise the bank on the procedure for realizing an Assignment of a Life Insurance Policy in the event of death of the Life Assured. [15 marks]

(b) How should the bank deal with David’s demand? [5 marks]

[Total: 20 marks]

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  • 20 Marks

LPB – OCT 2019 – L3 – Q5 – Life Insurance Policies: Types, Parties, Insurable Interest & Keyman Insurance

Scenario involving a pharmaceutical company insuring a key employee's life as security for a bank overdraft; questions on policy definition, types suitable for bankers, parties involved, insurable interest justification, and impact of employee's resignation on the security.

Life Insurance Policies-Types & Parties, Insurable Interest & Keyman Insurance.

As Executive Director/Retail, you call that 3 years ago, the CEO of Wiafe Chemists Limited (WCL), a small but growing Pharmaceutical Company, and long-standing Customer of your Kokonsa Branch of the Zenith Bank, sought your advice about whether they could ensure the life of their Chief Chemist; on whom the success of the Company largely depended. You advised that the WCL could, and they did.

Today, the CEO calls to your office and informs you that the Chief Chemist has resigned and asks about the status of their overdraft facility limit of GH¢25,000.00 covered by a Legal Assignment of the GH¢55,000.00 Life Policy over the life of the Chief Chemist.

Required: a) Define a Life Policy.   b) State the types of Life Policies available to the Banker as Security for Bankers’ Advances.      c) Who are the parties in a Life Policy; and how will these apply in the above scenario?                                                                              d) Did the WCL have an Insurable Interest in the life of the Chief Chemist; and does the resignation of the Chief Chemist change the status/position of the Security to cause the Bank to request for another facility?

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  • 20 Marks

LPB – APR 2016 – L3 – Q5 – Bank’s Position on Assignment of Term Life Policy as Security

Discuss bank's position on legal assignment of a term life policy as additional security for a mortgage, how assignment is taken and priority over subsequent assignments, effect if premiums stop, payout if suicide, and differences if endowment policy.

The PREDEQ bank gives a mortgage of land for a customer0 \mathrm{}$ and, as an additional security, took an assignment of a 30-year Term Life Policy (not endowment situation) over the customer’s life – the policy monies being payable to the customer’s wife, at maturity on his death. Discuss this bank’s position in the following circumstances:

(a) How the Legal Assignment of the Policy was taken by the PREDEQ Bank: Supposing that someone else, at a later date, also takes an assignment of the Policy, which of the 2 assignments would have priority over the other?

(b) What would happen to the PREDEQ Bank’s security if the customer stopped paying the premiums?

(c) Would the Policy monies be payable if the customer committed suicide?

(d) Will the position be any different of the Policy was an Endowment Life Policy? If yes, indicate

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  • 10 Marks

BL – May 2015 – L1 – SB – Q5a – Contract Law

Define the concept of assignment in relation to insurance and explain the types of assignment possible.

Assignment is ONE of the principles in a contract of insurance.

Required:
i. Define the concept of assignment in relation to insurance contracts. (3 Marks)
ii. State the THREE types of assignment that are possible under an insurance contract. (3 Marks)
iii. “Insurance contracts are contracts uberrimae fidei”. Explain this doctrine, and state any ONE major duty the doctrine imposes on the parties to an insurance contract. (4 Marks)

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