LIC of India Vs Insure Policy Plus Services Pvt. Ltd. & Ors. (Supreme Court of India)
Summary: Supreme Court of India has affirmed that life insurance policies are transferable and assignable, dismissing an appeal by LIC of India against Insure Policy Plus Services Pvt. Ltd. The ruling clarifies that prior to the 2015 amendment to the Insurance Act, 1938, insurers were bound to accept policy assignments provided statutory procedures were followed. LIC had refused to register assignments by Insure Policy Plus Services, citing concerns about policy trading, speculative practices, and undermining social security aspects of insurance, issuing circulars to this effect. However, the High Court had previously deemed these circulars illegal, emphasizing that life insurance policies are movable property and actionable claims, and Section 38 of the Insurance Act (pre-amendment) was a substantive, mandatory provision, not merely procedural. The Supreme Court concurred, stating that LIC could not unilaterally restrict assignments not prohibited by the original policy contract or law. The Court also noted the 2015 amendment now grants insurers discretion to refuse assignments in specific cases like bad faith or trading, but this was not applicable retrospectively. This judgment reinforces the rights of policyholders to assign their policies as per the law prevailing at the time of assignment.
