THIRD PARTIES (RIGHTS AGAINST INSURERS) ORDINANCE

THIRD PARTIES (RIGHTS AGAINST INSURERS) ORDINANCE

LAWS OF HONG KONG

THIRD PARTIES (RIGHTS AGAINST INSURERS)

ORDINANCE

CHAPTER 273





CHAPTER 273.

THIRD PARTIES (RIGHTS AGAINST INSURERS).

To confer on third parties rights against insurers of third party risks in
the event of the insured becoming insolvent, and in certain other
events.

[9th November, 1951.1

1. This Ordinance may be cited as the Third Parties (Rights
against Insurers) Ordinance.

2. (1) Where under any contract of insurance a person (hereinafter
referred to as 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 to 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;
or

(c)in the case of the insured being a co-operative society in the
event of an order for cancellation of registration of such co-
operative society being made under the Cooperative Societies
Ordinance,

if, either before or after that event, any such liability as aforesaid is
incurred by the insured, his rights against the insurer under the contract
in respect of the liability shall, notwithstanding anything in any
enactment or rule of 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 section 112 of the Bankruptcy
Ordinance for the administration of the estate of a deceased debtor
according to the law of bankruptcy, then, if any debt provable in
bankruptcy is owing by the deceased in respect of a liability against
which he was insured under a contract of insurance as being a liability
to a third party, the deceased debtor's rights against the insurer under
the contract in respect of that liability shall, notwithstanding anything in
the said Ordinance, be transferred to and vest in the person to whom the
debt is owing.

(3) In so far as any contract of insurance made after the
commencement of this Ordinance in respect of any liability of the
insured to third parties purports, whether directly or indirectly, to avoid
the contract or to alter the rights of the parties thereunder upon the
happening to the insured of any of the events specified





in paragraph (a), (b) or (c) of subsection (1) or upon the making of an
order under section 112 of the Bankruptcy Ordinance in respect of his
estate, the contract shall be of no effect.

(4) Upon a transfer under subsection (1) or (2), the insurer shall,
subject to the provisions of section 4, be under the same liability to the
third party as he would have been under to the insured, but

(a)if the liability of the insurer to the insured exceeds the liability
of the insured to the third party, nothing in this Ordinance
shall affect the rights of the insured against the insurer in
respect of the excess; and

(b)if the liability of the insurer to the insured is less than the
liability of the insured to the third party, nothing in this
Ordinance shall affect the rights of the third party against the
insured in respect of the balance.

(5) For the purposes of this Ordinance, the expression lia- to third
parties', in relation to a person insured under any contract of insurance,
shall not include any liability of that person in the capacity of insurer
under some other contract of insurance.

(6) This Ordinance shall not apply where a company is wound up
voluntarily merely for the purposes of reconstruction or amalgamation
with another company.

3. (1) In the event of any person becoming bankrupt or making a
composition or arrangement with his creditors, or in the event of an
order being made under section 112 of the Bankruptcy Ordinance in
respect of the estate of any person, or in the event of

ù winding-up order being made with respect to any company or of

ù 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 or of a resolution for a voluntary
winding-up being passed with respect to any company, or in the event
of an order for cancellation of registration of a co-operative society
being made, it shall be the duty of the bankrupt, debtor, personal
representative of the deceased debtor, or the company or co-operative
society, and, as the case may be, of the trustee in bankruptcy, trustee,
liquidator, receiver or manager, or person in possession of the property,
to give, at the request of any person claiming that the bankrupt, debtor,
deceased debtor, company, or co-operative society, is under a liability to
him, such information as may reasonably be required by him for the
purpose of ascertaining whether any rights have been transferred to and
vested in him by this Ordinance and for the purpose of enforcing such
rights, if any, and any contract of insurance, in so far as it purports,
whether directly or indirectly to avoid the contract or to alter the rights
of the parties thereunder upon the giving of any such information in the
events aforesaid or otherwise to prohibit or prevent the giving thereof in
the said events, shall be of no effect.





(2) If the information given to any person in pursuance of
subsection (1) discloses reasonable ground for supposing that there
have or may have been transferred to him under this Ordinance
rights against any particular insurer, that insurer shall be subject
to the same duty as is imposed by the said subsection on the
persons therein mentioned.

(3) The duty to give information imposed by this section
shall include a duty to allow all contracts of insurance, receipts
for premiums, and other relevant documents in the possession or
power of the person on whom the duty is so imposed to be ins-
pected and copies thereof to be taken.

4. Where the insured has become bankrupt or where, in the
case of the insured being a company, a winding-up order has been
made with respect to the company, or a resolution for a voluntary
winding-up has been passed with respect to the company or where,
in the case of the insured being a co-operative society, an order
for cancellation of registration has been made, no agreement made
between the insurer and the insured after liability has been incurred
to a third party and after the commencement of the bankruptcy,
winding-up or as from the date of such order for cancellation of
registration, as the case may be, nor any waiver, assignment or
other disposition made by, or payment made to, the insured after
the commencement aforesaid shall be effective to defeat or affect
the rights transferred to the third party under this Ordinance, but
those rights shall be the same as if no such agreement, waiver,
assignment, disposition or payment had been made.
Originally 40 of 1951. Short title. Rights of third parties against insurers on bankruptcy, etc. of the insured. 20 & 21 Geo. 5, c. 25, s. 1. (Cap. 33.) (Cap. 6.) (Cap. 6.) Duty to give necessary information to third parties. 20 & 21 Geo. 5, c. 25, s. 2. (Cap. 6.) Settlement between insurers and insured persons. 20 & 21 Geo. 5, c. 25, s. 3.

Originally 40 of 1951. Short title. Rights of third parties against insurers on bankruptcy, etc. of the insured. 20 & 21 Geo. 5, c. 25, s. 1. (Cap. 33.) (Cap. 6.) (Cap. 6.) Duty to give necessary information to third parties. 20 & 21 Geo. 5, c. 25, s. 2. (Cap. 6.) Settlement between insurers and insured persons. 20 & 21 Geo. 5, c. 25, s. 3.

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