Revised Laws of Saint Lucia (2021)

15.   Rights of third parties against insurers on bankruptcy, etc. of the insured

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   (1)   Where under any contract of insurance a person (hereinafter referred to as the insured) is insured against liabilities to third parties which he or she may incur, then—

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      (a)     in the event of the insured becoming bankrupt or making a composition or arrangement with his or her creditors; or

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      (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,

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   if, either before or after that event, any such liability as aforesaid is incurred by the insured, his or her rights against the insurer under the contract in respect of the liability shall, despite 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.

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   (2)   Where an order is made under article 621 of the Commercial Code 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 or she 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, despite anything contained in any enactment or rule of law, be transferred to and vest in the person to whom the debt is owing.

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   (3)   In so far as any contract of insurance made after the commencement of this Act 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 subsection (1)(a) or (1)(b) or upon the making of an order under article 621 of the Commercial Code in respect of his or her estate, the contract shall be of no effect.

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   (4)   Upon a transfer under subsection (1) or subsection (2), the insurer shall, subject to the provisions of section 17, be under the same liability to the third-party as he or she would have been under to the insured, but—

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      (a)     if the liability of the insurer to the insured exceeds the liability of the insured to the third-party, this Act shall not affect the rights of the insured against the insurer in respect of the excess; and

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      (b)     if the liability of the insurer to the insured is less than the liability of the insured to the third-party, this Act shall not affect the rights of the third-party against the insured in respect of the balance.

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   (5)   For the purposes of this Act the expression “liabilities 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.

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