O.C.G.A. § 33-24-17 (2019)

Annotations

JUDICIAL DECISIONS Editor’s notes. - In light of the similarity of the statutory provisions, decisions under former Code 1933, § 56-903, are included in the annotations for this Code section. No-assignment clause should not be applied ritualistically and mechanically to forfeit coverage; rather, the court should consider the voluntariness of the

assignment and the increased risk or hazard assumed by the insurer. Imperial Enters., Inc. v. Fireman’s Fund Ins. Co., 535 F.2d 287 (5th Cir. 1976). Nonassignment clause did not prevent assignment that did not change insurer’s risk. - Because an insurance broker paid normal premiums on behalf of the insured in anticipation of a refund,

and the insured promised that the refund would be paid directly to the broker despite language in the insurance contracts that refunds would be paid to the insured and despite a non-assignment clause, the insured validly assigned the insured’s right to a refund to the broker; the non-assignment clause was permissible under O.C.G.A. § 33-24-17, but the court would not apply the clause to preclude the assignment because the assignment did not increase the insurer’s risk. Watson Ins. Agency, Inc. v. Chipman-Union, Inc. (In re Chipman-Union, Inc.), 330 B.R. 851 (Bankr. M.D. Ga. 2005). Policy of life insurance is chose in action and assignable by insured as security for a debt under former Code 1933, § 85-1803 (see O.C.G.A. § 44-12-22), prior to the insured’s death. Baldwin v. Atlanta Joint Stock Land Bank, 189 Ga. 607, 7 S.E.2d 178 (1940) (decided under former Code 1933, § 56-903). Policy of life insurance is a chose in action and may be assigned by the insured as security for a debt, and generally the effect of such an assignment is to vest legal title to the policy in the assignee to the amount of the debt secured. Parramore v. Williams, 215 Ga. 179, 109 S.E.2d 745 (1959) (decided under former Code 1933, § 56-903). Effect of insurer’s failure to honor assignment. - Assignment for valuable consideration, with notice to the debtor, imposes on the debtor an equitable and moral obligation to pay the assignee. Thus, an insurance company which had notice of an assignment of proceeds, but nevertheless paid all benefits to the insureds rather than the assignee, was liable to the assignee. Santiago v. Safeway Ins. Co., 196 Ga. App. 480, 396 S.E.2d 506, cert. denied, 196 Ga. App. 909, 396 S.E.2d 506 (1990). Beneficiary divested of interest by assignment of policy subject to payment of debt. - Beneficiary, having only a divestible interest which is not a vested right, is, in effect, divested of this interest by the assignment of an insurance policy subject to payment of a debt. Ruis v. Bank

of Albany, 213 Ga. 41, 96 S.E.2d 580 (1957) (decided under former Code 1933, § 56-903). General rule of assignment with respect to present beneficiary. - When the insured names a third person as beneficiary in a policy of life insurance, the general rule as to the assignment of the policy is that, if the insured reserved the right in the policy to change the beneficiary, the insured may assign the policy without the consent of such beneficiary, but if no such reservation is made, the assignment cannot be legally made unless the consent of the beneficiary is obtained. Baldwin v. Atlanta Joint Stock Land Bank, 189 Ga. 607, 7 S.E.2d 178 (1940) (decided under former Code 1933, § 56-903). Interest in policy of original beneficiary and insured after absolute assignment. - Assignment of insurance policy ‘‘for value received’’ which recites that the policy ‘‘is an absolute assignment,’’ is an absolute assignment as against the original beneficiary, and the insured under such an assignment would have no interest in the policy after assignment. Parramore v. Williams, 215 Ga. 179, 109 S.E.2d 745 (1959) (decided under former Code 1933, § 56-903). Since the rights of the beneficiary and the rights of the debtor were subjected by the assignment of the insurance policies to the full amount of the debt secured by the assignment of the policies (which debt exceeded the value of the policies), they had no further interest in such policies and no rights to assert as to these policies in receivership proceedings. Parramore v. Williams, 215 Ga. 179, 109 S.E.2d 745 (1959) (decided under former Code 1933, § 56-903). When an insurer has, by the insurer’s own conduct and actions, consistently demonstrated a decision to regard a policy as assigned and to treat one, other than the named insured, as the assignee thereof and has thereby waived the insurer’s own requirement, as between the insurer and that party, that the assignment be in writing, the insurer has consented to the assignment and may not avoid the

assignment’s obligations thereunder by urging the lack of a formal written assignment between the assignee and assignor. State Farm Fire & Cas. Co. v. Mills Plumbing Co., 152 Ga. App. 531, 263 S.E.2d 270 (1979). Recognizing assignee’s claim of right without looking to underlying transaction. - Insurer was entitled to provide for the insurer’s discharge from liability by paying life insurance proceeds to an assignee of policy, notwithstanding claim by executor that the indebtedness secured by the policy was less than the

amount of the policy. Pittman v. Maxwell, 175 Ga. App. 138, 332 S.E.2d 683 (1985). Parent transferring automobile title may still have insurable interest. - Parent may have an insurable interest as to liability coverage for an automobile, notwithstanding the parent’s transferring the title to that vehicle to the parent’s child, such that a no-assignment clause should not be applied ritualistically and mechanically to forfeit coverage. James v. Pennsylvania Gen. Ins. Co., 167 Ga. App. 427, 306 S.E.2d 422 (1983).

OPINIONS OF THE ATTORNEY GENERAL Insurance Code does not prohibit assignment of conversion privilege

under policy of group life insurance. 1969 Op. Att’y Gen. No. 69-2.

RESEARCH REFERENCES Am. Jur. 2d. - 44 Am. Jur. 2d, Insurance, § 774 et seq. C.J.S. - 45 C.J.S., Insurance, § 730. ALR. - Validity as against creditors of change of beneficiary of insurance policy from estate to individual, 6 A.L.R. 1173; 106 A.L.R. 596. Insurance: assignment of life or benefit policy for valuable consideration as change of beneficiary, 38 A.L.R. 109. Rights as between mortgagor and insurance company where policy avoided as to mortgagor, but not as to mortgagee, 52 A.L.R. 278. Divorce of insured and beneficiary as affecting the latter’s right in life insurance, 52 A.L.R. 386; 175 A.L.R. 1220. Right of life insured to assign policy without beneficiary’s consent, 60 A.L.R. 191. Right of lessor or lessee or his privies to benefit of insurance taken out by other or his privies, 66 A.L.R. 864. Rights and remedies of beneficiary after death of insured who had pledged policy to secure debt, 71 A.L.R. 1437; 111 A.L.R. 628; 160 A.L.R. 1389. Assignment of policy insuring life of minor, 95 A.L.R. 205. Assignment of claim for loss under fire insurance policy as affecting the furnishing of proofs of loss, 101 A.L.R. 1300. Avoidance on ground of fraud, mistake,

duress, or mental incompetency of otherwise validly effected change of beneficiary of insurance policies, 105 A.L.R. 950. Construction, application, and effect of provision of life insurance policy as to filing of assignment, or duplicate, with insurer, 111 A.L.R. 709. Assignment by assured of policy of indemnity or liability insurance, or of rights thereunder, 122 A.L.R. 144. Assignment of policy of life insurance as affecting subsequent attempt to change beneficiary, 125 A.L.R. 1097. Rights, in respect of proceeds of policy of life insurance, as between beneficiary and one to whom policy has been assigned otherwise than as collateral, 138 A.L.R. 1357. National Service Life Insurance Act, 153 A.L.R. 1413; 155 A.L.R. 1445; 156 A.L.R. 1445; 157 A.L.R. 1445; 158 A.L.R. 1445. Duty of insurer to investigate mental competency of insured to assign policy, or to designate or change designation of beneficiary, or as to fraud or undue influence in that regard, 162 A.L.R. 547. Change of beneficiary in old line insurance policy as affected by failure to comply with requirements as to manner of making change, 19 A.L.R.2d 5. Validity of assignment of life insurance policy to one who has no insurable interest in insured, 30 A.L.R.2d 1310.

Transfer or pledge of fire insurance policy as collateral security for debt as within policy provisions prohibiting or restricting assignment of policy, 31 A.L.R.2d 1199. Testamentary nature of life insurance trust, 53 A.L.R.2d 1112. Right of one who pays medical or similar expenses of injured person under life care, or similar, contract to recover the cost thereof from tortfeasor, 78 A.L.R.2d 822.

Law governing assignment of life insurance policy or of rights thereunder, 97 A.L.R.2d 1399. Obligation of insurer to give assignee of life policy notice of premiums due, 68 A.L.R.3d 360. Coverage under all-risk insurance, 30 A.L.R.5th 170.